All Nippon Airways is set to formally oppose the planned merger of rivals Japan Airlines (JAL) and Japan Air Systems (JAS), fearing it will give the combined carrier an overwhelming share of the market.

ANA declines to confirm that it will seek to have the merger blocked by Japan's Fair Trade Commission but the carrier's president and chief executive, Yoji Ohashi, has already come out publicly against it. He said in December that the proposed merger will result in a loss of service and convenience for Japanese passengers. An ANA spokesman says that "what you will have is a mammoth corporation and this will distort competition". Industry sources say ANA is expected to lodge a formal objection early in 2002.

JAL's main strength is its international network, which is by far the biggest of the three main Japanese carriers, but ANA has the biggest domestic network, claiming a market share of around 49%. JAL and JAS say their new carrier will claim a domestic share of around 48%, but ANA says this is misleading as it will in fact control some 60-70% of traffic on major domestic trunk routes while retaining an 80% share of the international market. ANA operates on more domestic city pairs away from the trunk routes.

The merger plan was unveiled in November but remains subject to regulatory approval. If the go ahead is granted the two will form a joint holding company in September 2002 and fully integrate operations early in 2004.

Source: Airline Business