Australian competition watchdog proposes blocking Qantas-China Eastern agreement

Australia's competition watchdog has foreshadowed plans to block a tie up between Qantas Airways and China Eastern Airlines because it could increase fares on the popular Sydney-Shanghai route.

The Australian Competition and Consumer Commission issued a draft decision Tuesday proposing to deny authorization for Qantas and China Eastern to coordinate their operations between Australia and China under a joint coordination agreement proposed in November.

The ACCC said the agreement is likely to result in "significant public detriment" by giving Qantas and China Eastern "increased ability and incentive to limit capacity and/or increase airfares on the Sydney-Shanghai route."

The ACCC is seeking submissions from interested parties on the draft determination, before making a final decision. Submissions are due by April 8.