Qantas and SAA get Draft Approval

The International Air Services Commission is proposing to allocate Qantas seven services per week on the South Africa route for the next five years - but will only permit South African Airways to codeshare on the flights until 31 December 2014. The commission is concerned that the "duopoly environment" on the South Africa route greatly limits the intensity of competition, due to the basis on which each carrier charges the other for its block of seats, the weak competitive constraint imposed by third country carriers, and the knowledge by both Qantas and SAA that if they discount fares too aggressively, it might destabilise the arrangement.