Australian competition regulator proposes to deny Qantas-Japan Airlines deal

SYDNEY, May 6 (Reuters) – Australia’s competition regulator on Thursday announced it was proposing to deny approval of a joint commercial agreement between Qantas Airways Ltd and Japan Airlines Co Ltd (JAL) covering flights between Australia, New Zealand and Japan.

Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said such a deal between two key competitors, which would allow them to coordinate fares and timetables, could only be allowed if the public benefits from cooperation outweighing damage to competition.

“At this point, we don’t consider Qantas and Japan Airlines’ proposal to pass this test,” he said, noting that before the pandemic they were the only airlines offering flights between Melbourne and Tokyo. .

On the Sydney-Tokyo route, ANA Holdings Inc also offers flights. Virgin Australia was supposed to fly between Brisbane and Tokyo when the pandemic hit, but it has since gotten rid of the widebody jets capable of carrying the flights.

“This coordination proposal would appear to significantly undermine competition by reducing the prospect of a strong return to competition on the Melbourne-Tokyo and Sydney-Tokyo routes when international travel resumes,” Sims said.

The ACCC is seeking submissions from interested parties in response to this draft decision by May 27 and will make a final decision after reviewing those submissions.

Qantas and JAL, which sought permission from the ACCC in December, did not immediately respond to requests for comment.

At the time, the airlines said the deal would allow them to better serve customers traveling between Australia, New Zealand and Japan and support the recovery of the tourism industry when scheduled international travel resumes. . (Reporting by Jamie Freed; Editing by Sam Holmes)

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