Money

Australia’s regulator axes Qantas-Japan Airlines deal

Qantas wins in another High Court battle
Qantas wins in another High Court battle
In this story

Australia’s Consumer Watchdog blocks Qantas and Japan Airlines alliance

The Australian Competition and Consumer Chair has ruled against the joint business agreement between Qantas and Japan Airlines. The ACCC says the coordinated deal would hamper competitors on Australia-Japan routes.

Qantas and Japan Airlines announced the plan in December 2020, to launch in July 2021. Both major airlines wanted to use the plan to reboot the aviation sector and international travel.

However, the ACCC Chair, Rod Sims, says it is essential that competition between airlines is maintained to help the aviation industry’s full recovery. The plan did not pass the ACCC’s public benefits test.

“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.”

Australian Competition and Consumer Commission Chair Rod Sims

Protecting the aviation sector

Qantas and Japan Airlines traditionally flew approximately 85-90% of total passengers flying between Australia and Japan. The ACCC says granting authorisation for the alliance would remove competition between Qantas and Japan Airlines. It would also make it extremely difficult for other airlines to operate on routes between Australia and Japan.

Virgin Australia has also petitioned against the plan saying, “it will be more difficult to enter the Australia-Japan route if it is required to compete with Qantas and Japan Airlines acting jointly rather than as individual competing airlines.“

The ACCC reiterates the alliance between Qantas and Japan Airlines would stop all competition between the airlines including price and service for three years.

“The ACCC can only authorise an agreement between competitors if it is satisfied the public benefits will outweigh the harm to competition. The alliance did not pass this test.”

Australia Competition and Consumer Commission Chair 

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

Up next
Is Australia’s economy being held hostage by the housing market?

Australia’s growing dependence on property is raising questions about the long-term strength of the economy, with housing affordability.

Read the story →
Ticker Today takes a daily view of the world of news, politics and business.With Ahron YoungWhisky & Suits explores law, property finance and business over fine whisky.With Imran Khan and Chris ChristofiThe Founders Method explores practical lessons and systems for entrepreneursWith Jonathan Byrt and Jesse LeeworthyThe Connector explores property and urban growth across Australia and the UK.With Belinda CoateThe Property Playbook delivers research-led insights for property investors.With Tim Graham and Terry RyderState of Hospitality explores the challenges facing Australia's hospitality.With Jeremy KoadlowBuying Power helps young professionals enter property and build lasting wealth.With Victor and Reshmi KumarThe Airport Economist explores global trade, business and economic outlooks.With Tim HarcourtMedia Movers explores the trends shaping Australia's media and global news.With James ManningBroker Business explores strategies to build, grow and sustain a business.With Rex AfrasiabiMoney Matters explores practical financial strategies to build lasting wealth.With Dr Steven EnticottBeyond Education explores the ideas and technology shaping future learning.With Greg CampitelliTicker Air explores the latest aviation news, travel trends and developments.With Ahron YoungEarly Years Dialogue explores the issues shaping Australia's early learning.With Paul MondoMarkets and Machines explores AI, regulation and trends shaping the markets.With Chris BergSocial Intelligence explores how social media and AI transform our daily lives.With Dr Karen SutherlandThe AI Edge explores how artificial intelligence reshapes the world economy.With Brad Gastwirth

More from Ticker

Watch

More in Money

View all →