Australian regulator denies Qantas-Japan Airlines deal

Australia’s competition regulator on Monday refused approval of an agreement between Qantas Airways Ltd. and Japan Airlines Co. to coordinate flights between Australia and Japan, saying it would reduce competition when coronavirus travel restrictions are lifted and international travel resumes.

The Australian Competition and Consumer Commission said in a statement that the proposed deal would not only remove competition between the two main competitors, but also make it difficult for other airlines to operate on routes between Australia. and Japan.

“Preserving competition among airlines is key to the long-term recovery of the aviation and tourism sectors, once restrictions on international travel are relaxed,” said Rod Sims, president of ACCC .

Qantas and JAL together carried some 85% of passengers traveling between Australia and Japan in 2019, the year before the novel coronavirus pandemic began, the ACCC said.

In response to the move, Qantas and JAL expressed disappointment in a joint statement, saying the deal would have spurred the recovery of the tourism sector once international borders reopened.

“A closer partnership between Qantas and Japan Airlines would have meant more routes, better air connections and more benefits for frequent flyers. None of these benefits will be realized as a result of the ACCC decision, ”said Andrew David, Qantas National and International CEO.

The sentiment was echoed by Ross Leggett, managing director and senior vice president of JAL.

“In particular, we believed that the joint activity with Qantas would have accelerated the recovery of leisure and business traffic between Japan and Australia, with obvious economic and social benefits for both countries in the extremely difficult environment precipitated. by the COVID-19 pandemic, “Leggett said.

The ACCC said in May that it planned to deny approval, but would seek submissions from interested parties on the plan and would only make a final decision after reviewing them.

Following the announcement by the regulator, Qantas proposed a new direct route between the Australian city of Cairns and Tokyo in northern Australia as part of the deal, a move the airline hoped would attract Japanese tourists to the tropical north of Australia.

Without the approval, the new road will not move forward, David said.

Currently, the Japanese company All Nippon Airways Co. is the only other carrier to offer direct flights between Australia and Japan.

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