According to Independent Consumer and Competition Commission chief executive officer Paulus Ain, the proposed code-sharing agreement between Link PNG Ltd and PNG Air should only be approved if a number of criterias are met.
The criteria, he added, should be targeted at modifying the planned code-share agreement to reduce the likelihood of anti-competitive consequences and ensuring that the two airlines could compete in the long run.
Link PNG filed an application for permission under section 70 of the ICC Act 2002 on April 9.
For a period of five years, the proposal requested a joint operating agreement (JOA) with PNG Air for code-sharing.
According to Link PNG, the proposed JOA would allow the two airlines to coordinate flight schedules, fleet allocation, operational and maintenance services, and charter airline operations.
The ICCC, according to Ain, recognized important markets for domestic scheduled and regular passenger transport, air freight, and air charter services.
“The ICCC has considered that the proposed JOA should not form part of the authorisation because it constitutes an unjustifiable intrusion by Link PNG into the management of PNG Air.
“The former would gain decision-making control over key aspects of the strategy, operations and, consequently, the financial structure of the latter and, therefore, would be likely to substantially lessen competition and result in greater detriment than benefit to the public.”
He added Link PNG's bid to buy 40% of Nasfund's stake in PNG Air is presently being reviewed.
Reference:
The National (9 July 2021). “Proposal should be authorised with conditions: Ain”.
