Qantas and Japan Airlines (JAL) plan a new joint business, which aims at strengthening the position of both airlines in the Japanese and Australian/New Zealand market. The joint business, which was announced on December 23, should become operational in July next year and run for five years.
The plan is to expand the existing codeshare agreement through the oneworld alliance by offering fourteen additional codeshare destinations into Japan and fifteen into Australia and New Zealand. Passengers will benefit from the airlines’ frequent flyer and loyalty programs as well as from each other onboard premium products. This should drive tourism and produce additional growth to the benefit of both Qantas and JAL.
Both airlines expect the joint business to allow them to quick-start their international business, “sooner than would otherwise be possible.” This depends on the reopening of borders and the resumption of international services, which are almost non-existent at Qantas. The airline has been operating some repatriation services to Europe in the last few weeks but the network is expected to resume only from July.
Qantas looking at Asia-Pacific market
Already last August at the FY20 presentation, CEO Alan Joyce said that Qantas is exploring options to open up new market opportunities in the Asia-Pacific region. Japan seems to become one of them, with a new and yet to be disclosed route from Australia building on this strategy. About half a million Japanese visited Australia in 2019, plus some 100.000 went to see New Zealand.
JAL has also drastically cut its international network. While it has reinstated services from Tokyo Haneda to London, Paris, Bangkok, and Hanoi in December and January, and to San Francisco, San Diego, Seattle from March, capacity on 58 routes will be reduced from February until mid-April. Sydney and Melbourne at firmly on the Winter schedule, but passenger numbers have been marginal at just 472 in October (-95.2 percent compared to last year).
Plan subject to regulatory approval
Qantas and JAL have submitted an application for the joint business with the regulatory agencies in Australia and New Zealand and hope to get approval within the next half year. The New Zealand authorities might have a careful look at how the joint plan impacts competition and hurts the interest of national carrier Air New Zealand. It used to operate multiple weekly services to Tokyo Narita and Haneda, and to Osaka.
The Australian authorities will want to weigh the application against the interests of Virgin Australia, which gained a slot at Tokyo Haneda last year out of Brisbane. Following the Covid-crisis and VA’s own restructuring this slot is unused, but the airline still intends to operate to Japan despite grounding the most suitable long-haul aircraft for the job.