Qantas-Emirates Kangaroo Alliance Cleared by Regulator

Qantas Airways Ltd. (QAN)’s bid to tie up with Emirates on international flights and shift the so-called kangaroo route to fly through Dubai was cleared by Australia’s antitrust regulator.

The alliance will be permitted for five years and allow the carriers to coordinate passenger and cargo operations and other services, the Australian Competition and Consumer Commission said in a regulatory statement today. The regulator will impose a condition limiting the carriers’ ability to adjust capacity on flights between Australia and New Zealand.

Qantas will sell tickets to 60 new one-stop destinations in Europe, the Middle East and Africa via Emirates’ Dubai hub under the alliance. The Australian carrier sought the tie-up after losing market share on international routes to Middle East and Asian rivals offering a wider range of connections and more convenient flight times.

“The alliance is likely to result in material, but not substantial, public benefits,” the Commission’s chairman Rod Sims said in a statement. “The alliance is likely to provide Qantas and Emirates customers with increased access to a large number of existing frequencies and destinations.”

Qantas shares rose 2.3 percent to A$1.76 in Sydney trading, the highest level since March 30, 2012, compared to a 0.9 percent gain in the S&P/ASX 200 index. The stock has risen 56 percent since the deal was announced Sept. 6 last year.

“Customers are already responding very strongly to the joint network,” Alan Joyce, Qantas chief executive officer, said in a regulatory statement today welcoming the decision.

The regulator granted provisional approval to the tie-up Dec. 20 and today’s announcement follows the terms of the earlier decision.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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