Alliance partners planning extended codesharing between Europe and Australia have had their strategies thrown into disarray by the Australian government's route rights authority.
In a draft ruling the Canberra-based International Air Services Commission (IASC) shocked Qantas and British Airways by saying it will refuse them permission for a wide-ranging series of codeshares.
If confirmed - a final decision was expected in late November - the ruling would severely restrict the partnership's financial benefits.
It would also be bad news for other European and Asia-Pacific alliance partners hoping to rationalise their operating costs on the route. These include a proposed tripartite codeshare agreement between Singapore Airlines, Air New Zealand and Ansett Australia, and a similar deal between KLM and Malaysia Airlines.
All these carriers had formulated alliance plans in the wake of growing concerns about the increasing market strength of Qantas/BA.
The IASC ruling is the first direct challenge to traditional codeshare arrangements and is based on the belief that air travellers would be disadvantaged by more joint flights.
Qantas and BA already operate joint services under a revenue and profit-sharing deal but wish to widen their codeshare network.
The IASC contends the benefits to the airlines from further codesharing are outweighed by the disadvantages, in particular the reduction in flights operated by Qantas in its own right.
The Australian flag had argued its agreement with BA allowed it to add any number of codeshare flights without seeking permission from the IASC, but the Commission rejected this approach.
Tom Ballantyne
Source: Airline Business
