ACCC blocks Qantas’ proposed tie-up with Japan Airlines
The Australian Competition & Consumer Commission (ACCC) has denied authorisation for Qantas and Japan Airlines (JAL) to coordinate flights under the terms of a joint business agreement.
The ACCC found that the agreement would likely lead to reduced competition as international travel resumes, to the detriment of passengers travelling between Australia and Japan.
“The ACCC can only authorise an agreement between competitors if it is satisfied the public benefits would outweigh the harm to competition. The alliance did not pass this test,” ACCC chair Rod Sims said.
“Airlines have been severely impacted by the pandemic and this has been a very difficult period for them. But preserving competition between airlines is the key to the long-term recovery of the aviation and tourism sectors, once international travel restrictions are eased.”
In the year before the pandemic, Qantas and JAL together flew about 85 per cent of passengers travelling between Australia and Japan.
They were each other’s closest competitors on the largest route (Sydney-Tokyo) and the only airlines operating on the second-largest route (Melbourne-Tokyo).
The ACCC concluded that granting the authorisation would not only remove competition between Qantas and JAL, but would make it very difficult for other airlines to operate on routes between Australia and Japan.
Virgin Australia told the competition watchdog that it would be more difficult to enter the Australia-Japan route if it is required to compete with Qantas and JAL acting jointly rather than as individual competing airlines.
“We accepted that there was likely to be some short-term benefits from the alliance being able to jointly reinstate services more quickly when borders are reopened, which may initially stimulate tourism,” Sims said.
“However, the longer-term benefits of competition between airlines are cheaper flights and better services for consumers, which is vital to the recovery of tourism over the coming years.”
Following the ACCC’s draft decision in May, Qantas offered a commitment to commence a new service between Cairns and Tokyo once certain demand thresholds were reached.
“We think Qantas could commence a new Cairns service without the alliance, and the timing of any such service would be best determined by commercial factors in a competitive environment,” Sims said.
“Jetstar services on this route are currently planned to start again from February 2022, without the alliance.”
The ACCC has granted several exemptions from competition law during the COVID-19 pandemic.
These exemptions have typically been for short periods and involved targeted proposals for industry participants to come together to ensure supply of resources during the pandemic.
The competition watchdog found that the Qantas and JAL alliance would have allowed the airlines to stop competing on all aspects of price and service for three years.
Both Qantas and JAL expressed their disappointment at the ACCC’s decision.
“We’re obviously disappointed with this decision,” said Andrew David, CEO of Qantas’ domestic and international operations.
“A closer partnership between Qantas and Japan Airlines would have meant more routes, better flight connections and more benefits to frequent flyers. None of these benefits will be realised following the ACCC’s decision.
“We know the recovery of international travel is going to be slow and bumpy. It will take years for the whole travel and tourism industry to fully recover from COVID, so getting the policy settings right is going to be critical as key routes are rebuilt essentially from scratch. Getting that right will ultimately benefit the recovery of the Australian economy.
“This is particularly unfortunate for Queensland and Cairns, which would have benefited from a direct Qantas route to Tokyo that would have seen a lot of travellers wanting a premium experience.
“Without being able to coordinate with JAL and, in particular, to draw Japanese tourists into northern Queensland using JAL’s extensive marketing reach in Japan, the planned flights between Cairns and Tokyo are just not commercially viable for Qantas.
“We explained that dynamic to the ACCC at length, and we disagree with their assessment that the route is viable without the alliance.”
JAL executive officer and senior vice president of route marketing, international relations and alliances, Ross Leggett, said: “Japan Airlines is also truly disappointed with the ACCC’s decision to disapprove our proposed joint business.
“We especially believed that the joint business with Qantas would have accelerated the recovery of leisure and business traffic between Japan and Australia, with clear economic and social benefits to both countries in the extremely challenging environment precipitated by the COVID-19 pandemic.
“It is unfortunate that the opportunity to provide enhanced customer choice and extensive travel industry growth opportunities will not be realised.”
Featured image source: iStock/MicroPixieStock
Email the Travel Weekly team at traveldesk@travelweekly.com.au
accc airlines alliance andrew david Australian Competition Consumer Commission aviation jal japan airlines qantas Ross LeggettLatest News
Voyages celebrates 40 years at Uluru with two new immersive experiences
No plans for celebrating your 40th this year? Here's a hot tip from us.
SkyDeck: The inflight entertainment you could never have imagined
Forget those external cameras you can live stream while in the air... With SkyDeck you can check it out for yourself.
Second Boeing whistleblower dies of ‘mystery infection’
Joshua Dean died from a fast-growing mystery infection on Tuesday.
Aussie winners of American Airlines ‘Sell Your Way to the USA’ announced
Show me the money! For the winners, Sell Your Way to the USA was worth getting involved in.
ANZCRO celebrates 30th with special edition of iconic New Zealand Book
Choice bro! ANZCRO celebrates its 30th with a special edition of its iconic New Zealand Book. Chur!
Room to move at Cairns Harbourside Hotel with ‘spacious’ new family package
Moody teens can eat two-minute noodles while younger brothers and sisters get to eat free with mum and dad. Win, win!
A&K unveils lavish around the world wildlife adventure in private jet
The kind of holiday that if you need to ask the cost, you probably can't afford it.
Flight Centre and Reforest hit one million trees target early
Nice one Flight Centre, we think you've earned an early Friday knockoff.
New cruise options spearhead stacked APT 2025 program
Just in case you thought you were running out of cruise itineraries, APT's here with a fresh batch.
Travel Weekly announces a new team to helm Australia’s No.1 travel trade title
Some shameless self-promotion from us, but we thought you needed to know who's bringing you the news.
IHG reveals plans for Brisbane’s first Kimpton in 2028
Just another reason to book that trip to Brisvegas. But don't jump the gun, it's not open until 2028.
Cruiseabout’s first store in five years opens in Perth
Perth gets a break from being behind the rest of the country with the addition of the first Cruiseabout store.
ATAS complaints process acknowledges non-economic loss
A High Court case win over 'disappointment and distress' on a cruise gone wrong prompts ATIA complaints change.
Cunard previews new Queen Anne
Yep, this one does exactly what it says on the tin.
Bunnik Tours unveils latest expansion to Iceland
Just as the Icelandic vikings did many years ago, Bunnik is expanding into new territories.
Australia’s first glamping retreat turns 25
25th anniversary gifts usually come in silver. Ours comes in the way of a news story.
Embrace the journey: Traversing the world with the Shokz OpenRun
If you’ve been on the wrong side of a final call in the airport, or missed the stop on rail journey, it might be time to invest in a pair of Shokz OpenRun headphones. Originally marketed as headphones for fitness fanatics, runners or cyclists with a keen to steer clear of a prang with a car, […]
Tourism Western Australia MD Carolyn Turnbull departs
Turnbull hints her new role will see her staying in the tourism and hospitality industry and who can blame her?
DriveAway launches Brit-Euro Blitz campaign
If agents can put the foot down quick enough and get involved, there are some great prizes to be won.
Fly and Stay Free with the Great Southern
Unlike those dodgy scam phone calls you're getting more and more of, there's no strings attached to this deal.
Sober travel and TikTok guide Australian Gen Z trips
Can you call it a sober holiday if you enjoy a few glasses of red on the flight? We think yes.
Travel DAZE Exec Agenda REVEALED: top execs to speak on airline competition
As the industry reels from Bonza's implosion, it is more important than ever to ask the big questions.
TTC: Deals are driving up demand for September trips
The latest market research from TTC Tour Brands shows interest in international leisure travel remains high for 2024, with 77 per cent of Australians over 18 still planning trips this year. Notably, 28 per cent of those travellers are eyeing September for their journeys. Europe continues to be the most popular destination, with 68 per […]
Skroo says Rex will need deep pockets to fill lost Bonza slots
The door is open for Rex, and anyone else who wants to launch a regional Aussie airline...
Sno’n’Ski Holidays unveils 2025 mega famil to Colorado!
Let the games begin - this is certainly not a famil that you will want to miss!
Walk Japan launches Kyoto: Mountains to the sea walking tour
There are two types of people, one who enjoys walking on holiday and another who enjoys sipping Mojitos by the pool.
Which destination had a 48% boost in bookings following 10 MILLION TikTok views?
Here's a clue: it's not Malabar Beach.
Asher Telford appointed General Manager of SeaLink Whitsundays
Telford has plenty of reasons to smile after SeaLink doubles down and makes him GM after buying his tourism operation.
Qantas ‘working urgently’ to fix app data leak
Qantas is looking into customer reports that passengers have this morning been able to access other passengers’ personal information on the airlines app. X user Lachlan posted that he was able log into different accounts every time he opened the app. My @Qantas app logs me in to a different person each time I open […]
Hilton Expands Presence in North Queensland with the signing of Hilton Garden Inn Townsville
Heading to a North Queensland Cowboys clash? Hilton Garden Inn Townsville is set to open, but not until 2026.
Rail Europe ANZ: making dream journeys come true
Rail Europe's running a lottery! You're not going to win millions, but you might just snag a free holiday.
UPDATE: Bonza hole deepens as administrators investigate financial affairs
Administrators dig deeper as struggling airline unlikely to be revived.
Revamped Wailoaloa Beach hotel opens as Crowne Plaza Fiji Nadi Bay Resort & Spa
Crowne Plaza Fiji Nadi Bay Resort & Spa is open and ready for bookings after the first phase of a multi-million-dollar transformation. Part of IHG Hotels & Resorts’ premium collection, the transformation has seen the completion of 106 guestrooms showcasing contemporary interiors reflective of the premium Crowne Plaza brand and is a first for the […]
Nielsen Data reveals brands spending big to attract Aussie tourists
Trip A Deal, Virgin and Ignite Travel walk into a bar, blow their cash on travel advertising instead of the pokies.
Kamalaya Koh Samui clinches clutch of wellness awards
Kamalaya Wellness Sanctuary & Holistic Spa has so far clinched five prestigious awards in 2024, including being inducted into the ‘Hall of Fame’ at the World Spa & Wellness Awards in London. Founders of the Koh Samui sanctuary and spa John and Karina Stewart expressed their heartfelt gratitude for the awards. “We are profoundly honoured […]
Jetstar offers 200,000 return for free flights to celebrate 20th anniversary
Jetstar hits 20 and everyone else gets the presents with free return flights to domestic and international destinations.