Australian Competition and Consumer Commission (ACCC) has denied authorisation for Qantas Airways and Japan Airlines to coordinate flights between the two countries, citing competition concerns as international travel is set to resume.
Chairman Rod Sims said the ACCC was not satisfied that the public benefits of the proposed joint business agreement would outweigh harm to competition.
"Preserving competition between airlines is the key to the long-term recovery of the aviation and tourism sectors, once international travel restrictions are eased," he said in a statement.
"Virgin Australia told the ACCC that it would be more difficult to enter the Australia-Japan route if it is required to compete with Qantas and Japan Airlines acting jointly rather than as individual competing airlines, " the regulator said.