Virgin Australia Calls IASC to Reject Proposed Qantas-Air Niugini Codeshare

6th Oct 2016

In a submission made to the International Air Services Commission (IASC), Virgin Australia said the proposed codeshare deal between rival Qantas and Air Niugini should be rejected as it would erode competition.

VA said this codeshare would have a:

"Negative effect on the Australian aviation industry, particularly in relation to the Brisbane-Port Moresby route."

Qantas and Air Niugini work under a codeshare agreement where Qantas adds its QF code on the Papua New Guinea carrier's flights from Port Moresby to Sydney and Brisbane. At the moment, the two are not codesharing on Cairns-Port Moresby, although they both operate the route ? Qantas with 12 weekly return flights using the Q400 turboprop and Air Niugini with 11 return flights per week using Fokker 70s.

This July Qantas revealed plans to end Cairns-Port Moresby service, operated by QantasLink Q400 aircraft and start a daily service between Brisbane to Port Moresby using Boeing 737-800s. As a reason for this change, Qantas cited the need to better serve the business market. This change will take plane on 30th October.

Last month, Qantas applied for a codeshare on the Air Niugini Cairns-Port Moresby services with IASC. In addition, the Australian and Papua New Guinea airlines would also codeshare on each other's Brisbane-Port Moresby service, while the Flying Kangaroo would keep its codeshare on the Air Niugini Sydney-Port Moresby flights.

On 9th September, the PNG carrier submitted to IASC that it would likely have to withdraw wide body planes on the Brisbane-Port Moresby route if the proposed codeshare with Qantas was rejected.

Air Niugini flies Boeing 767-300ERs and Boeing 737-800s on this route.

In its own submission to the IASC, Virgin Australia said:

"In Virgin Australia's view, these variation applications should be rejected on the basis that the proposed use of the relevant capacity will not be of benefit to the public. We believe that the proposals in Qantas's applications have the potential to significantly erode competition on the PNG route, to the detriment of the travelling public and Australia's export sector."

Virgin also said the Qantas-Air Niugini codeshare (both current and proposed) were the "single most significant barrier to entry on the PNG route".

The carrier further stated:

"Accordingly, the codeshare arrangements are themselves acting to restrict competition in air services between Australia and PNG. This has negative implications for consumers and businesses, as well as tourism and trade."

VA flies between Brisbane and Port Moresby since 2008 and operates six flights per week there, using Boeing 737-800s.