All Nippon Airways (ANA) is to seek to block a merger of rivals Japan Airlines (JAL) and Japan Air System (JAS), describing the proposed deal as anti-competitive. Industry sources say the carrier will file a formal objection with Japan's Fair Trade Commission soon.
ANA president and chief executive Yoji Ohashi alluded to the carrier's intentions on 6 December in Tokyo, when he said the proposed merger would result in a loss ofservice and convenience for passengers.
While stopping short of confirming that it will formally seek to have the merger blocked, ANA says that "what you will have is a mammoth corporation and this will distort competition".
The sources say ANA will formally oppose the merger because it estimates a combined JAL/JAS will control 60-70% of traffic on Japan's major domestic trunk routes while retaining an 80% share of the international market.
However, the two sides would each control about half of the domestic market as ANA operates on more domestic city pairs away from the trunk routes.
ANA has struggled to make money on its international operations, which it launched in the late 1980s following deregulation of the Japanese air transport market.
JAL argues its merger with JAS will reduce its reliance on the cyclical international market and help it compete more effectively with ANA in the domestic market.
The carriers announced plans for their merger early in November, but it remains subject to regulatory approval. If approved, the two will form a joint holding company in September next year and fully integrate operations early in 2004.
Source: Flight International
