The International Air Service Commission (IASC) yesterday allowed Qantas and South African Airways (SAA) to continue their code sharing service for another year despite V Australia pulling out of the flight route.

The IASC outlined the current agreement, which was due to expire on 31 December 2010, has been extended to 31 December 2011 regardless of the clear reduction in airline competition caused by V Australia’s planned departure from the South African route in February 2011.

The commission did express concern that the absence of V Australia would lead to an increase in fares but did not warrant it reason enough to axe the code sharing agreement.

According to the IASC report the continuation of the code sharing agreement would continue to benefit the airlines and the public but mandated that the airlines have to add two weekly flights to meet passenger demand.

Qantas was keen to continue the code sharing partnership because they believe it would not only benefit the airlines but also travellers, the report said.

“Code sharing arrangements maximised public benefit, involved efficient use of capacity, and enhanced the viability of the partners’ services,” Qantas said.

“Loss of approval would raise average costs and reduce public benefits.”

The IASC report noted that the Qantas and SAA had faced troubles due to a “weakening of the operation environment since the code share was last authorised in December 2008, as a result of the global financial crisis” along with increasing fuel prices.

The Australian Competition and Consumer Commission (ACCC) had lodged their concerns in a submission to the IASC, to which Qantas responded.

Other airlines travelling between the two include; Singapore Airlines, Emirates, Etihad, Thai Airways, Malaysian Airlines, Cathay Pacific and Air Mauritius.