Australian Regulator Seeks To Block Qantas-JAL Partnership

Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), is likely to block a proposed partnership agreement…

Australian Regulator Seeks To Block Qantas-JAL Partnership

Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), is likely to block a proposed partnership agreement between Qantas and Japan Airlines. The ACCC believes the agreement could undermine competition and negatively impact passengers on routes between Australia and Japan.

The ACCC has indicated it will block a proposed partnership deal between Qantas and Japan Airlines. Photo: Getty Images

Granting this authorization would seem to eliminate any prospect of Qantas and Japan Airlines competing for passengers traveling between Australia and Japan, as they did before the COVID-19 pandemic. This elimination of competition would benefit the airlines at the expense of consumers,” said ACCC Chairman Rod Sims on Thursday.

Qantas and Japan Airlines want to deepen their longstanding relationship

Qantas and Japan Airlines, both members of the oneworld alliance, have long cooperated on routes between Australia and Japan. Last year, the two airlines moved to deepen that relationship. They want to join forces to coordinate marketing and sales, pricing, scheduling, distribution strategies and agency arrangements, yield and inventory management, frequent flyer programs, lounges, joint procurement, product and service standards, and cargo.

In their submission, Qantas argued the deal, formally called a Joint Services Agreement (JSA), would increase frequencies and improved connectivity over a more diverse number of city pairs between Australia and Japan, provide a more certain and sustainable reinstatement of services operated by both carriers on routes between Australian and Japan, enhance frequent flyer benefits, and offer a variety of fare products and price points to consumers. But the ACCC disagrees.

“The COVID-19 pandemic has severely impacted the airline and tourism sectors. Protecting competition in the airline industry is critical to ensuring recovery in the tourism sector, once international travel restrictions ease,” Mr Sims said.

“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 when international travel resumes.”

Japan Airlines and ANA both normally fly to various Australian cities. Photo: Getty Images

The Qantas Group and Japan Airlines owned the bulk of the market in 2019

Before international travel halted, Jetstar, Qantas, Japan Airlines, and ANA all competed on two-way routes between Australia and Japan. Virgin Australia was due to enter the market with its now-abandoned plans to fly between Brisbane and Tokyo Haneda. In the last year of normal travel, 2019, 1,562,465 passengers moved through Australian airports to or from Japan. That same year, there were 6,698 nonstop flights between the two countries.

In 2019 Japan Airlines and the two Qantas Group airlines, Qantas and Jetstar, held the majority of the market. 1,369,131, or 87.6% of the 1,562,465 passengers who flew nonstop between the two countries, flew on one of these three airlines, with ANA mopping up the remainder.

Qantas argues the JSA would assist it in restoring services to Japan. Photo: Getty Images

Qantas and Jetstar discontinued their international flights to Japan early in 2020. Both Japan Airlines and ANA have maintained scaled-back services to Australia. Qantas argued the JSA would be key to restoring its flights on routes between the two countries.

We’re obviously disappointed with a negative draft decision,” says Qantas in a statement. “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.”

Qantas not giving up yet

But it isn’t over until it’s over. This is a draft ACCC determination, with the final determination due in June. In the meantime, Qantas plans to put its best foot forward to persuade the ACCC to alter course. The Qantas statement notes;

“It’s our job to convince the ACCC of the merits of this partnership ahead of their final
determination. We’ll review their draft decision closely and respond to their concerns, as
we’ve done in the past.”

Should Qantas be allowed to get their planned JSA with Japan Airlines up? Post a comment and let us know.

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Police Find Drugs Onboard TAP Airbus A330neo In Venezuela

Venezuelan sniffer dogs foiled a drug run out of Simón Bolívar International Airport in Venezuela this week. The…

Police Find Drugs Onboard TAP Airbus A330neo In Venezuela

Venezuelan sniffer dogs foiled a drug run out of Simón Bolívar International Airport in Venezuela this week. The dogs, along with their handlers from Venezuela’s  Regional Anti-Drug Intelligence Unit, found the haul when inspecting a TAP Air Portugal cargo flight on Wednesday.

Venezuelan authorities grounded a TAP Air Portugal A330 after a drug seizure this week. Photo: Airbus

“Venezuelan police on Wednesday prevented the take-off of a TAP cargo plane, which was supposed to fly between Maiquetía (northern Caracas) and Lisbon, after detecting an undetermined amount of narcotic substances in the aircraft’s fuselage,” says a statement from Safe Communities Portugal, a non-profit crime prevention group. Simple Flying has established the haul was 124 bars of cocaine. The cocaine was found in the crew area of the Airbus.

TAP Air Portugal running regular cargo services to Venezuela

TAP Air Portugal currently operates regular freighter services between Simón Bolívar Airport (Maiquetia) outside Caracas to Lisbon.  Safe Communities Portugal flagged the aircraft as an Airbus A330. TAP Air Portugal has 24 of these planes, 18 of which are currently in service.

Flight tracking website shows CF-TUF, a TAP Air Portugal A330-900, departed Lisbon for Caracas on Tuesday, May 4, operating as TP9533. The flight landed later that day and was slated to depart on Wednesday. However, following the bust, that flight was cancelled. The Safe Communities Portugal statement says:

“The local authorities are conducting investigations concerning products of a possible narcotic nature, which will have been found, in the cargo hold, during a mandatory civil aviation security control action under the responsibility of the Bolivarian National Guard.”

Simón Bolívar Airport is a long-established hotspot for illicit drug movements. Photo: Getty Images

Aircraft released after suggestion of seizure

The temporary grounding led to some speculation online Venezuelan authorities would confiscate the TAP Airbus. The Venezuelan Government has previously held onto smaller Portuguese planes seized in other drug busts. But holding onto a commercial Airbus A330 may have proved a little ambitious. shows CF-TUF was back in the air on Thursday.

There was no suggestion TAP Air Portugal’s crew were involved. Instead, the investigators focused on a sergeant of the Bolivarian National Guard. The unnamed sergeant “fled when the Venezuelan authorities decided to inspect the aircraft.” The inspection was part of a compulsory civil aviation security check. Reports indicate the crew and TAP Air Portugal were cooperating fully with the investigation.

There was a big drug bust in 2013 involving an Air France flight from Venezuela. Photo: Air France

Cocaine bust continues a long tradition at Simón Bolívar International Airport

Wednesday’s cocaine seizure puts the spotlight back on Venezuela’s biggest international airport. Simón Bolívar International Airport has an established track record as a cocaine export hub. Corruption and a need for hard currencies are key enablers of the trade.

But as this week’s bust indicates, efforts are made to stamp out the illicit trade. However, corrupt elements hinder those efforts. Most spectacularly, French authorities halted a massive 1.3-tonne cocaine importation on an Air France flight in 2013 tied to the Venezuelan military.

“Anyone who has witnessed the elaborate controls the National Guard keeps over every aspect of passenger and bag movements at Simón Bolívar, where woe be onto you if you try to leave the country with two packs of coffee in your bag as souvenirs, knows perfectly well you can’t get ghost bags onto a plane without them knowing about it,” one Venezuelan commentator said online at the time.

A former airline pilot noted that it was relatively unusual for crew areas to be inspected on flights like the TAP Air Portugal cargo service. There is also a suggestion the inspection was the result of information coming from international law enforcement agencies.

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