The Australian Competition and Consumer Commission has completed its investigation into airline capacity expansion by Qantas on the Newcastle/Melbourne and Newcastle/Brisbane routes and claims by Impulse Airlines that Qantas' activities may be in breach of the Trade Practices Act 1974.
"The ACCC gave careful consideration to material provided to it by both Impulse and Qantas", ACCC Chairman, Professor Allan Fels, said today. "There were a number of specific circumstances relevant to Qantas' capacity expansion to which the ACCC gave particular consideration. They were:
- Qantas already had strategic plans in place in early 1999 to create a regional hub in Newcastle and to commence direct Newcastle/Melbourne services in October 2000. In early 1999 Qantas was already proposing to be a new entrant in competition with Impulse which was the major incumbent regional carrier into and out of Newcastle;
- Qantas' plans were brought forward to service its contractual obligations following awarding to it of the national BHP account in September 1999;
- Financial material provided to the ACCC by Qantas appears to confirm the commercial viability of its capacity expansion on the Newcastle routes and which appears consistent with criteria adopted by Qantas concerning capacity expansion on other routes of its network; and
- Notwithstanding Impulse's commercial decision to redirect its aircraft servicing Newcastle/Melbourne to another route, there does not appear to be any indication that Impulse has been materially damaged by Qantas' capacity expansion.
Following consideration of these issues and other material provided, the ACCC has formed the view that there does not appear to be any basis for it to take any action under the Trade Practices Act on this particular issue. The ACCC will monitor closely the activities of all competitors in the domestic aviation market and will investigate complaints that arise in the current price-competitive market environment.