The ACCC Denies Approval for Qantas-Japan Airlines Deal

As international travel resumes, Australia’s Competition and Consumer Commission (ACCC) denied Qantas Airways and Japan Airlines permission to coordinate flights between the two countries.

Rod Sims, chairman of the ACCC, said the regulator was not convinced that the proposed joint business agreement would benefit the public more than it would harm competition.

“Preserving competition between airlines is the key to the long-term recovery of the aviation and tourism sectors, once international travel restrictions are eased,” he said in a statement.

Other airlines will find it very difficult if not impossible to operate on routes from Australia to Japan as a result of the agreement, the ACCC said.

Japan’s ANA is the only other airline that flies non-stop between Japan and Australia.

“Virgin Australia told the ACCC that it would be more difficult to enter the Australia-Japan route if it is required to compete with Qantas and Japan Airlines acting jointly rather than as individual competing airlines, ” the regulator said.

Following the ACCC’s negative draught decision in May, Qantas offered to commit to a new service between Cairns and Tokyo if demand thresholds were met.

In a joint statement on Monday, Qantas and JAL expressed disappointment with the ACCC decision but stated that their codeshare arrangements and oneworld alliance partnership would continue.

Andrew David, Qantas domestic and international chief executive, said the decision was unfortunate for Cairns because the planned Tokyo flights would not be commercially viable without the ability to coordinate with JAL.

JAL senior vice president Ross Leggett said the joint venture with Qantas would have accelerated the recovery of leisure and business traffic between Japan and Australia.

Source: Reuters

By Joe Cusmano