Qantas Calls IASC to Approve Codeshare with Air Niugini for Papua New Guinea

15th Nov 2016

Australian airline Qantas Airways has called out Australia's International Air Services Commission (IASC) to fully rescind its previous draft decision and to fully approve the carrier's codesharing arrangement with Air Niugini on Australia-Papua New Guinea routes.

In its draft decision from October, IASC approved the codeshare for a "trial period" until 30th June, 2018, but only on Brisbane-Port Moresby route operated by both airlines and on Sydney-Port Moresby route, operated by Air Niugini. The IASC decision did not mention Cairns-Port Moresby, which is operated by Air Niugini.

In its response to the IASC draft decision, Qantas said:

The Qantas and Air Niugini proposal is predicated on a whole of market, package proposition which reflects the circumstances and reality of this market and is premised on the proposal being approved in its entirety. We request the Commission review the draft decisions and authorize the code share in its entirety, including Cairns-Port Moresby (Cairns sector) for the duration of the relevant Determinations.

Qantas' submission also added that it was not practical to segment the market as the commission has proposed and added:

"The Commission's draft decisions do not, in our view, establish a case for 'serious concerns' as described by the policy statement. Importantly the Commission has not demonstrated that it has satisfied itself that the requested aviation would not be of benefit to the public."

The carrier applied with IASC to codeshare with the Air Niugini's Cairns-Port Moresby service as part of the deal to reflect its network changes to PNG. At the same time, the carriers would codeshare on each other's Brisbane-Port Moresby service and The Flying Kangaroo would continue to codeshare on the Air Niugini's Sydney-Port Moresby route.

Qantas also said that the IASC decision represents a "desire of the Commission to move away from its guidelines and conduct an experimental workshop which contradicts the intent in the Minister's Policy Statement".

The airline said:

"The IASC draft decisions support a puzzling proposition whereby a monopoly provider on the Cairns sector presents a better public benefit outcome than the addition of Qantas' presence as a fully independent code share partner."

The Australian national carrier added:

"The Commission then proposes to base a future assessment of whether to approve the code sharing on the Cairns sector on the performance of two different routes (the Sydney and Brisbane sectors) which have their own specific dynamics, route economics, operators and competitors. This approach is illogical and inconsistent with the IASC framework which provides for criteria for the Commission to make a decision."