Australia-Japan open skies agreement fails to gain traction in shrinking market

There is unlikely to be any short-term change to Australia-Japan air services following an open skies agreement between the two countries that gives Australian carriers access to Tokyo Haneda airport and fifth-freedom traffic rights. Qantas serves Tokyo Narita and has been given nonviable midnight slots at Haneda, and furthermore its low-cost arm Jetstar - the largest operator in the market - is establishing a subsidiary at Narita. The liberalisation comes as the Australia-Japan market continues to shrink, with traffic down 56% from its 2005 peak, making Japan Australia's largest shrinking market.

The Australian government announced with great fanfare the open skies agreement with Japan, proclaiming it "landmark". Japan last month concluded an open skies agreement with Canada and is working on a similar agreement with Taiwan.