Regulators will be watching closely to ensure that Qantas
(ASX:QAN) doesn’t raise airfares on the Australia-South Africa route once Virgin Blue’s V Australia leaves the flight path in February.
Yesterday, Qantas and South African Airlines were given tentative approval to continue their code-share agreement on the route until the end of next year.
The International Air Services Commission had to reconsider an earlier decision allowing an extension of the agreement after Virgin Blue announced it would pull V Australia off the Australia-South Africa route because it was unprofitable.
The authority has set a condition requiring Qantas and South African Airlines to maintain a minimum of 14 flights a week between them.
The commission also warned that it would monitor closely traffic levels, capacity and air fares over the next nine months.
Qantas posted a $116million net profit after tax in the 2010 financial year.
