STATEMENT FROM QANTAS AND JAL ON ACCC DECISION ON PROPOSED JOINT BUSINESS

The airlines had sought approval from the ACCC in December 2020 to work more closely together to better serve customers travelling between Australia, New Zealand and Japan and ensure a faster and sustained recovery from COVID.

As part of the agreement the airlines had proposed:

• An expanded codeshare relationship to up to 29 destinations and better flight schedules between Australia, New Zealand and Japan.
• A new direct route Cairns - Tokyo operated by Qantas.
• Coordination of pricing, schedules, sales and tourism marketing supporting growth in key tourism markets.
• Enhanced frequent flyer benefits and more premium travel opportunities for Qantas and JAL customers.

Qantas and JAL will continue their existing codeshare and oneworld partnership, which do not provide the same benefits than would have been possible under a joint business. Qantas and JAL have been partners in Jetstar Japan, one of the largest domestic low cost carriers in Japan, since 2012.

Japan is the world's third largest economy and one of Australia's largest trade and investment partners. In 2019 half a million of its residents visited Australia, meaning it is one of the most important tourism and corporate markets as the recovery begins.

Comments from Qantas Domestic and International CEO Andrew David:

"We're obviously disappointed with this decision. A closer partnership between Qantas and Japan Airlines would have meant more routes, better flight connections and more benefits to frequent flyers. None of these benefits will be realised following the ACCC's decision."

"We know the recovery of international travel is going to be slow and bumpy. It will take years for the whole travel and tourism industry to fully recover from COVID, so getting the policy settings right is going to be critical as key routes are rebuilt essentially from scratch. Getting that right will ultimately benefit the recovery of the Australian economy.

"This is particularly unfortunate for Queensland and Cairns, which would have benefited from a direct Qantas route to Tokyo that would have seen a lot of travellers wanting a premium experience. Without being able to coordinate with JAL, and in particular to draw Japanese tourists into northern Queensland using JAL's extensive marketing reach in Japan, the planned flights between Cairns and Tokyo are just not commercially viable for Qantas. We explained that dynamic to the ACCC at length, and we disagree with their assessment that the route is viable without the alliance."

Comments from JAL Executive Officer, Senior Vice President (Route Marketing, International Relations & Alliances) Ross Leggett:

"Japan Airlines is also truly disappointed with the ACCC's decision to disapprove our proposed joint business. We especially believed that the joint business with Qantas would have accelerated the recovery of Leisure and Business traffic between Japan and Australia, with clear economic and social benefits to both countries in the extremely challenging environment precipitated by the COVID-19 pandemic.

"It is unfortunate that the opportunity to provide enhanced customer choice and extensive travel industry growth opportunities will not be realized."