ACCC to monitor competition in the domestic airline market

19 June 2020

The ACCC welcomes today’s direction from the Australian Government to actively monitor and regularly report on the domestic air travel market, particularly in relation to its competitiveness.

The aviation industry globally has been severely impacted by the COVID-19 pandemic, and is a critical industry to Australia.

“A strong aviation industry is vital for Australian consumers and the economy more broadly, and for our way of life,” ACCC Chair Rod Sims said.

“We welcome this opportunity to help ensure competition in this market at this time.”

The ACCC will be looking out for any early signs of damage to competition in the domestic airline industry which could harm the long-term interests of consumers. This information can then be quickly acted on by the ACCC and/or provided to the Government.

For example, the monitoring regime will inform the ACCC and the Government about the rate at which each airline is increasing capacity on each route. This will provide insight into whether an airline could be adding additional flights to a route in an attempt to damage a competitor or drive them off the route.

“A sufficient level of competition provides consumer choice, and helps to maintain service levels and keep prices down over the long term,” Mr Sims said.

The ACCC is currently investigating whether the acquisition of a 19.9 per cent ownership stake in Alliance Airlines by Qantas represents a breach of competition law.

Background

On 19 June 2020, the ACCC was directed by the Treasurer, The Hon Josh Frydenberg MP to monitor the prices, costs and profits of Australia’s domestic airline industry and provide quarterly reports to inform Government policy.

The direction under Part VIIA of the Competition and Consumer Act will enable the ACCC to require information from relevant companies. The direction is for three years.

This direction is in addition to the existing direction to the ACCC to monitor and report on prices, costs and profits and the quality of aeronautical services, and car parking at Australia’s four major airports.

Release number: 
125/20
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