Australia blocks Qantas-Japan Airlines deal to preserve competition among carriers

Australian Competition and Consumer Commission (ACCC) denied authorization for Qantas Airways and Japan Airlines (JAL) to coordinate flights between the two countries, not being satisfied that the public benefits of the proposed agreement would outweigh the harm to competition.

The proposed joint business agreement would allow the two airlines to coordinate fares and schedules, making it very difficult for others to operate between Australia and Japan routes, ACCC said.

ACCC Chairman Rod Sims said that preserving competition between airlines is the key to the long-term recovery of the aviation and tourism sectors upon the easing of international travel restrictions.

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

According to Virgin Australia, it would be more difficult to enter the Australia-Japan route if it has to compete with Qantas and Japan Airlines acting jointly, rather than as individual airlines.

The joint venture would have accelerated the recovery of leisure and business traffic between Japan and Australia, says JAL senior vice president Ross Leggett.

Meanwhile, Qantas domestic and international CEO, Andrew David, said that without its coordination with JAL, their Tokyo flights would not be commercially viable.