Qantas Airways chief executive Alan Joyce says the airline’s proposed deal with Emirates will increase competition in the Australian market.

As Australian Competition and Consumer Commission (ACCC) chief Rod Sims begins to assess the Qantas-Emirates tie-up, Mr Joyce has sought to allay fears of ticket prices going up.

There were 28 carriers operating on the so-called kangaroo route to Europe and pricing was set “by all of that competition”, Mr Joyce said on Sunday.

Those competitors had already reacted to rumours of the Qantas-Emirates union by adding capacity into the Australian market which would put pressure on prices, he told Sky News.

“We think that Qantas and Emirates getting together will be good for competition because it is making our competitors raise their game and be more competitive against this alliance,” he said.

“At the end of the day we think we can go through that concern with the ACCC and explain to them why this is still positive for the customers in Australia.”

Qantas has unveiled a 10-year partnership with the Dubai-headquartered Emirates involving an extensive codesharing arrangement, reciprocal frequent-flyer benefits and joint marketing, pricing and coordination on certain routes.

The alliance is regarded as a key plank to turn around Qantas’s struggling international operations, which reported a $450 million loss in 2011/12.

Mr Joyce said the airline had so far identified $300 million in savings on Qantas international by cutting routes, changing maintenance and catering operations, reconfiguring aircraft and improving airport facilities.

“The Emirates deal on top of that gives us clearly a path to cover the rest and further,” he said.

The announcement met with a positive response in the market, with Qantas shares up about 12 per cent after the airline confirmed the tie-up on Thursday.

However, some of the initial enthusiasm was dampened somewhat on Friday when ratings agency Standard and Poor’s cut the airline’s corporate credit rating to just one notch above junk status.