Qantas, Emirates tie-up wins final approval

SYDNEY (AFP) - Australia's competition watchdog on Wednesday gave final approval for struggling carrier Qantas and Dubai-based Emirates to launch a global alliance, saying the tie-up will benefit the public.

The decision by the Australian Competition and Consumer Commission (ACCC), widely expected after preliminary approval in December, allows the airlines to combine operations for five years.

Under the deal, they will coordinate ticket prices and flight schedules and Qantas will shift its hub for European flights to Dubai from Singapore.

It also means an end to Qantas's partnership with British Airways on the so-called kangaroo route to London, which has spanned nearly two decades.

"The ACCC considers that the alliance is likely to result in public benefits through enhanced products and service offerings by the airlines, and improved operating efficiency," ACCC chairman Rod Sims said.

However, the regulator said it was concerned that New Zealand was a key market where competition could be eroded by the Qantas-Emirates tie-up.

To deal with this, it imposed a condition on flights between Australia and New Zealand, forcing the airlines to maintain existing capacity on four overlapping trans-Tasman routes in operation before the alliance.

The tie-up is seen as vital to the sustainability of Qantas, which last year posted its first annual deficit since privatisation in 1995 due to tough regional competition and high fuel costs for its international arm.

For Emirates customers, it opens up Qantas's Australian domestic network of more than 50 destinations and nearly 5,000 flights per week.