The Australian Competition and Consumer Commission (ACCC), the country’s competition watchdog, has banned Qantas and Japan Airlines’ new joint business plan.
Last December, the airlines suggested an agreement that may improve flight schedules between Australia, New Zealand, and Japan. According to Qantas, the new proposal will benefit consumers of both airlines.
Customers of Qantas would be able to book Japan Airlines’ Business and Premium Economy classes on 14 new codeshare destinations. Customers of Japan Airlines can now fly to 15 new codeshare locations in Australia and New Zealand on Qantas.
The idea may also combine flight prices, timetables, sales, and tourism promotion to build new and improved travel solutions, giving customers more options.
Qantas attempted to secure the contract in May by establishing a new route connecting Cairns and Tokyo.
However, the ACCC declined to give Qantas and Japan Airlines the go-ahead, citing concerns that it would stifle competition on routes between Australia and Japan, notably for Qantas’ biggest rival, Virgin Australia.
Before the epidemic, Qantas and Japan Airlines carried 85 percent of passengers between Australia and Japan, according to the ACCC.
Prior to the pandemic, both airlines flew from Sydney to Tokyo and Melbourne to Tokyo, with All Nippon Airways, Japan’s largest airline, also flying from Sydney to Tokyo.
The ACCC anticipated “some short-term benefits” from the alliance. “However, the longer-term benefits of airline competition are cheaper flights and improved customer service, which is critical to tourist recovery in the coming years,” said Rod Sims, head of the ACCC.
Furthermore, the watchdog advised that Qantas may begin Cairns-Tokyo flights without the partnership. According to the ACCC, Jetstar, Qantas’ no-frills airline, plans to launch the new route in February of next year.
Qantas is “disappointed” with the judgment of the watchdog. “We know the international travel recovery will be lengthy and difficult, so getting the policy settings right will be important as key routes are rebuilt practically from start.
Getting that right would eventually boost the Australian economy’s recovery,” said Andrew David, Qantas Domestic and International CEO, in reaction to the ACCC’s ruling.
Previously, the airline stated that international flights could resume in December.
Regarding the new Cairns-Tokyo route, Qantas stated that it would not be sustainable without Japan Airlines’ significant marketing research in Japan.
Qantas also stated that this is a “particularly sad” situation for Queensland and Cairns, since the tourism hotspot would have benefited from a direct flight to Tokyo.
The ACCC’s ruling has also “disappointed” Japan Airlines. The proposal, according to Japan’s second largest airline, would have sped the recovery of leisure and commercial traffic between the two countries.
It might provide “clear and societal benefits to both countries in the extraordinarily hard context triggered by the Covid-19 pandemic,” according to Ross Leggett, Executive Officer, Senior Vice President of Japan Airlines.