ARC NEWS
Singapore clears Korean Air-Asiana merger
February 09, 2022
Korean Air on 8 February received unconditional approval from the Competition and Consumer Commission of Singapore (CCCS) for its merger with Asiana Airlines. Singapore's competition authority concluded from its assessment that the business combination will not infringe Singapore’s Competition Act, Korean Air says in a release today. The CCCS had conducted a public consultation in July 2021 to seek feedback from more than 150 stakeholders, including aviation regulatory bodies, competitors and customers, on Korean Air’s business combination report, the flag carrier notes. It found that the merger is unlikely to raise ticket prices due to the high degree of competition from competitor airlines in the passenger business. Within the cargo business, the merger would not reduce competition due to the significant pressure from existing and potential competitors and providers of indirect cargo flights, as well as excess capacity. The airline has also received clearance from the competition authorities of Turkey, Taiwan, Vietnam and Malaysia since it submitted its business combination reports in January 2021, it says. The competition authorities of the Philippines and Thailand also announced that the submission of a business combination report was not necessary. Korean Air says it will continue to proactively communicate and cooperate with the remaining regulatory bodies where the report is required, in order to finalise the acquisition process as early as possible. It is currently awaiting business combination approvals from regulatory bodies in the USA, the European Union, China, Japan, the UK and Australia.


Australia set for wider reopening on 21 February
February 08, 2022
Australia will reopen international borders to vaccinated travellers and foreign tourists from 21 February, ahead of neighbouring New Zealand's plans to fully reopen by October. Australian prime minister Scott Morrison announced the move to allow all visa holders who have been double-vaccinated to enter the country during a media briefing on 7 February. Australia began progressively reopening its borders since mid-December, allowing international students and family members of citizens and permanent residents to enter the country. The wider reopening could see airlines continue to gain more traction in international recovery in the coming months. Data shows that international flights originating from Australia have gradually inched up since the beginning of the pandemic, averaging about 300 flights per week between April to December 2020 to 500 flights per week for the whole of 2021. In January, airlines operated about 800 international flights per week, returning to the same levels seen in May to June 2021, the highest levels reached during the pandemic. However, this remains a fraction of the 4,300 flights in January 2019. Flight numbers look to rise in the coming months, with airlines scheduling about 770 flights per week in February, up to 1,000 flights per week in March and between 2,500-2,900 flights for the rest of the year. Qantas in December had predicted a slower ramp up in its international capacity in the first half of 2022 by about 10 percentage points, reaching the bottom end of its previous estimate of 40-55% of pre-pandemic levels. Chief executive Alan Joyce noted that news of the variant had "a clear impact on people’s confidence to book international trips in particular", but had not resulted in "large numbers of cancellations". Australian Airports Association chief executive James Goodwin observes that international travel to the country is only at 15% of pre-Covid levels and adds that the return of international travellers will also be a much-needed boost for domestic routes. Goodwin says: "In pre-Covid times 30% of domestic air travellers were international passengers. International tourists don’t just visit one Australian city. They fly from state to state to see all of what our nation has to offer so it is vital all domestic borders reopen and stay open."


​UK refund proposals to minimise pay-outs
February 08, 2022
The UK government’s proposals to shake up airline compensation legislation will result in fewer claims and lower expenditure for airlines, according to consumer rights legal firm Bott and Co. Although the proposals would reduce the threshold that compensation would be due down to one hour of delay from three currently – meaning that over ten times as many passengers could make claims – it would also massively reduce the average compensation claim amount. Based on government data, this would fall from an average of £220 ($297) to £23.60. "In theory the changes expose the airlines to more compensation, however the consultation acknowledges that in reality far fewer people will actually have the impetus to make a claim when the compensation is on average just £23.60," comments Coby Benson, consumer rights solicitor at Bott and Co. "The net result is that the airlines will save money because passengers will be disincentivised to make a claim." The law firm also believes that consumers will be less likely to challenge an airline’s refusal for compensation when relative small amounts are at stake, especially given the costs in launching a claim under the government’s alternative dispute resolution scheme. "I think if compensation is going to be reduced to such a low level then it should be paid out automatically, without any argument over extraordinary circumstances. This would then mirror the regulations for rail delays,” adds Benson. Currently, passengers are able to claim for delays of three hours or longer. The government's central proposal is that for a delay of more than one hour but less than two, passengers will be entitled to compensation of 25% of their ticket price. For a delay of more than two hours but less than three, this rises to 50% of ticket price. Beyond three, the full ticket price would be refunded. The change in legislation is designed to update UK regulation after Brexit.


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