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ACCC nod for Qantas-Emirates tie-up
The West Australian

The competition watchdog has given interim authorisation of Qantas' alliance with Emirates.

The Australian Competition and Consumer Commission's ruling allows the two airlines to begin preparations for their proposed tie-up, ahead of a final ruling from the ACCC expected in March.

"The ACCC is allowing Qantas and Emirates to start implementing their alliance because of the long lead time required to market and sell tickets before the commencement of long-haul services," ACCC chairman Rod Sims said in a statement.

The proposed alliance involves an extensive codesharing arrangement, reciprocal frequent-flyer benefits and joint marketing, pricing and coordination on certain routes between the two carriers.

It is regarded as a key plank of Qantas chief executive Alan Joyce's plan to turn around the airline's struggling international arm, which lost $450 million in 2011/12.

"Under interim authorisation, the applicants will be able to commence activities that will enhance the product and service offerings to Qantas and Emirates customers," Mr Sims said.

"In making its decision, the ACCC has accepted written assurances from the parties that should the ACCC ultimately decide not to allow the alliance to go ahead, the airlines will accommodate consumers' bookings."

Mr Sims again raised concern about the impact of the alliance on routes between Australia and New Zealand, a matter first raised by the ACCC in its draft decision in December.

The watchdog says it believes a Qantas-Emirates alliance could reduce or limit capacity growth on Trans-Tasman routes, and has sought more information from the two airlines and the industry on the issue.

"The ACCC is granting interim authorisation on the condition that the applicants do not engage in the conduct for which authorisation is sought in relation to services between Australia and New Zealand," Mr Sims said.The ACCC's interim authorisation may be reviewed at any time, and should not be seen as an indication of whether final approval will be approved or not, he said.