Australia’s competition watchdog is threatening to block a business partnership between Qantas and Japan Airlines, claiming a proposed alignment of flights between Australia and Japan breached competition laws at a time when airlines were struggling to recover from the impact of the Covid-19 pandemic.
“The airline and tourism sectors have been severely impacted by the Covid-19 pandemic. Protecting competition in the airline industry is critical to ensuring recovery in the tourism sector, once international travel restrictions ease,” said Rod Sims, chairman of the Australian Competition and Consumer Commission.
Recent traffic figures released by the Association of Asia Pacific Airlines (AAPA) show that international passenger markets remain weak “with unabating border restrictions particularly in the Asia Pacific region”.
Sims said granting the proposed QF-JAL agreement “would seem to eliminate any prospect of Qantas and Japan Airlines competing for passengers travelling between Australia and Japan, as they did before the Covid-19 pandemic”.
The ACCC also expressed concerns that combined Qantas and Japan Airlines operations would make it more difficult for another airline to launch flights on these routes.
The ACCC will hear further submissions until 27 May before making a final decision.
The ACCC’s ruling came as the Australian government delivered a sobering assessment of when Australians might be able to travel to Japan — or elsewhere in the world.
Finance Minister Simon Birmingham said global outbreaks and new mutant strains “mean we won’t be seeing borders flung open at the start of next year with great ease”.
Australia would remain in international lockdown “well into next year", the minister added.
Singapore has been cautiously floated as the next destination for Australia’s overseas travellers, after the trans-Tasman travel bubble with New Zealand opened last month.