Australian regulator denies approval of Qantas-Japan Airlines deal

  • Decision taken on the basis of preserving competition
  • ANA, the only other airline to offer non-stop Japan-Australia flights
  • Qantas had proposed a new route from Cairns to Tokyo

Sept. 13 (Reuters) – Australia’s competition regulator on Monday denied permission for Qantas Airways (QAN.AX) and Japan Airlines (9201.T) (JAL) to coordinate flights between the two countries, citing problems of competition as international travel is expected to pick up.

Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said the regulator was not convinced the public benefits of the proposed joint trade deal would outweigh the damage to competition .

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

The deal – which would allow airlines to coordinate fares and timetables – would make it very difficult for other airlines to operate on routes between Australia and Japan, the ACCC said.

Japan’s ANA Holdings (9202.T) is the only other airline to operate non-stop flights between Japan and Australia.

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

After a negative draft decision by the ACCC in May, Qantas had offered to commit to a new service between Cairns and Tokyo once the demand thresholds were reached.

Qantas and JAL expressed disappointment with the ACCC decision in a joint statement on Monday, although they said they would continue their codeshare agreements and partnership with the oneworld alliance.

Qantas National and International Managing Director Andrew David said the move was unfortunate for Cairns because without the ability to coordinate with JAL, scheduled flights to Tokyo would not be commercially viable.

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.

Reporting by Arundhati Dutta in Bengaluru and Jamie Freed in Sydney; additional reporting by Tim Kelly in Tokyo; Editing by Kim Coghill, Stephen Coates and Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

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