The Australian International Air Services Commission (IASC) has finalised its ruling blocking the expansion of a codeshare agreement between Qantas (QF, Sydney Kingsford Smith) and Cathay Pacific (CX, Hong Kong Int'l) covering services between the main Australian gateways and Hong Kong Int'l.

The IASC confirmed its draft findings from May, when it established that while the expanded codeshare would result "in some consumer benefits", it would also "entrench and expand the market position of Qantas and Cathay Pacific, to the detriment of Virgin Australia's competitive position and the position of any potential future entrants on the route".

Qantas tried to convince the IASC by offering to review the expanded partnership in November 2019, once it has been operational for a few months.

However, the IASC said that even with such a measure the risk to the market was too large.

"The Commission should be able to identify the potential harms resulting from the variation in a timely way and prevent such harms from occurring or, at least, to substantially mitigate the harms. In this instance, it is not apparent how the Commission could monitor the risks identified in this decision in a timely way, within the short period of five months before a review is undertaken," the IASC said, adding that there was a risk that by the time of the review, the harms would already be irreversible.

According to the ch-aviation schedules module, the existing Qantas/Cathay codeshare agreement covers domestic routes in Australia operated by Qantas, as well as ten and nine international routes out of Hong Kong operated by Cathay Pacific and Cathay Dragon, respectively.

The proposed expanded codeshare partnership would have covered Qantas' return flights from Brisbane Int'l and Melbourne Tullamarine to Hong Kong, as well as a one-way flight from Hong Kong to Sydney Kingsford Smith.