ACCC set to block Qantas tie-up with Japan Airlines

The competition regulator intends to spike a proposed tie-up between Qantas and Japan Airlines over concerns the partnership would lead to higher airfares and worse service for travellers.

The Australian Competition and Consumer Commission said on Thursday that it planned to block the agreement, which would allow Qantas and Japan Airlines (JAL) to sell fares on each other’s flights and coordinate on ticket pricing, flight schedules and marketing.

Qantas said the agreement would help reestablish air routes between Australia and Japan in the wake of COVID-19 but the ACCC found any benefits were outweighed by the harm to the travelling public.

“This proposed coordination would appear to undermine competition significantly by
reducing the prospect of a strong return to competition on the Melbourne – Tokyo and
Sydney – Tokyo routes,” ACCC chair Rod Sims said.

“This elimination of competition would benefit the airlines at the expense of consumers.”

Before the COVID-19 pandemic brought international travel to a standstill, Qantas and JAL were the only two airlines flying non-stop between Melbourne and Tokyo and they only had one competitor on flights between Sydney and Tokyo (All Nippon Airways).

Qantas said it was disappointed with the ACCC’s draft finding and would try to change the regulator’s mind before it makes its final decision.

“Not only would this partnership be good for our business, it would be good for consumers and help key parts of the tourism industry recover,” a Qantas spokesman said.