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The Qantas/Emirates Decision - How the Competition Commission of Singapore Used the Net Economic Benefits Exclusion to Regulate the Air Passenger Market

Knut Fournier

(2014) 26 SAcLJ 436

The Competition Commission of Singapore (“CCS”) did not properly assess the Net Economic Benefits (“NEB”) created by the co-operation agreement between Qantas Airways Ltd and Emirates. In particular, the high market shares of the two companies should have excluded the NEB defence under the Competition Act (Cap 50B, 2006 Rev Ed), even more so as the remedies proposed by the parties are likely to increase their market share further. The CCS appears to have failed to follow the letter of the Competition Act and instead effectively regulated the airlines sector through the use of competition tools, undermining the enforcement of competition rules and restricting competition in the airlines sector. The more recent decision on the Qantas/Jetstar co-operation shows an improvement in the assessment of economic benefits. The CCS must continue to improve its competitive assessment, must restrict the use of the NEB defence and possibly adopt the more internationally accepted slot divestment remedy as a way of solving competition concerns in airline agreements, or it will hurt competition and consumers in Singapore.