The Australian Competition and Consumer Commission will oppose the bids by Qantas and Ansett for the NSW regional carrier, Hazelton Airlines, ACCC Chairman, Professor Allan Fels, said today.
"Hazelton Airlines accounts for almost one third of all regional passengers carried in NSW, and even higher shares on specific routes. If Qantas gained control of Hazelton it would account for 60 per cent of the NSW regional air services market. If Ansett gained control it would account for 62 per cent.
"While deregulation of the NSW aviation market has enabled existing operators in NSW to enter new routes, if an operator wants to enter the market and expand, it must have access to landing/take-off 'slots' in Sydney at popular travel times.
"Capacity constraints at Sydney Airport limit the ability of airlines to expand at time when people most want to travel. Thus there are high barriers to entry or expansion without access to such slots.
"If Qantas gained control of Hazelton it would control 55 per cent of the landing/takeoff slots which are specially classified for regional air services at Sydney Airport. If Ansett gained control, it would control 50 per cent of these slots.
"The existing slot allocation mechanisms provide for airlines that control slots to 'swap' their slots over time. Thus it is possible to move regional services out of peak times and provide additional interstate services. If the merger was allowed, the successful acquirer of Hazelton would gain in excess of an additional 450 slots per week at Sydney airport, with 150 of these in peak times of 7 a.m. to 9 a.m. and 5 p.m. to 7 p.m.
"The ACCC is concerned that should Qantas or Ansett gain control of these slots, the ability of the acquirer to swap the regional slots may lessen competition in both regional and interstate markets. The holders of the scarce slots may be able to significantly expand capacity while other competitors will be constrained in their ability to provide additional competing services".