Qantas and China Eastern Airlines have a deal to boost Chinese tourism in Australia

Qantas. Photo: Getty Images

Consumer watchdog the Australian Competition and Consumer Commission has give the green light to a proposed partnership between Qantas and China Eastern Airlines.

The ACCC reversed an earlier draft ruling to reject the joint venture on the grounds that the airlines already controlled 85% of direct traffic between Sydney and Shanghai.

But the deal was finally approved yesterday and will seek to build on the existing code-sharing agreement between the two airlines to better coordinate scheduling and pricing. China Eastern is looking to increase capacity between Australia and China over the next five years as well as opening up new routes from Australia to Shanghai.

“The ACCC considers that the addition of a significant number of new services and expanded range of destinations, reflecting this gateway strategy, would constitute a significant public benefit,” chairman Rod Sims said.

The partnership will be a huge boost for Australian tourism and trade especially after China was found to be the leading source of Australia’s inbound tourism making up 18% of total international tourist spend, according to ANZ’s economic insights report.

“China is Australia’s most valuable inbound tourism market, projected to contribute up to $9 billion annually to the Australian economy by 2020,” said Qantas CEO, Alan Joyce.

“By working with China Eastern we are able to maximise Qantas’ presence throughout China and build a more sustainable platform for future growth such as opening up new routes from Australia to Shanghai.

“Greater connectivity and improved customer benefits will also help boost trade relations between the two countries as a result of the Australia-China Free Trade Agreement signed last year.”

The decision rounds off a successful week for Qantas, which posted a $3 billion turnaround after what was seen as the best six months in the company’s history.

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