The ACCC, Australia’s consumer competition watchdog, has announced that it will closely monitor and report on the competitiveness of the domestic air travel market.
This comes as News Corp’s The Australian reported on June 18 that senior government officials are angry with the administrators of Virgin Australia over concerns that regional routes and jobs may be lost as two U.S. hedge funds bid for the airline.
In a media release on June 19, ACCC Chair Rod Sims said: “A strong aviation industry is vital for Australian consumers and the economy more broadly, and for our way of life.
“We welcome this opportunity to help ensure competition in this market at this time,” he said.
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. https://t.co/Mucj2GYFOR pic.twitter.com/bqmnD2gDsn
— ACCC (@acccgovau) June 19, 2020
The ACCC will be keeping a close eye out for early signs of damage to competition that could harm the long-term interests of consumers, and then act quickly and or provide that information to the government. 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, according to the statement.
“A sufficient level of competition provides consumer choice, and helps to maintain service levels and keep prices down over the long term,” Sims said.
The ACCC said it is currently investigating whether Qantas has breached this law by taking a 19.9 percent stake in Alliance Airlines. This purchase made Qantas the single biggest shareholder in Alliance.
Ensuring that competition by smaller airlines is not hindered has become one of the ACCC’s particular areas of concern amid the CCP (Chinese Communist Party) virus pandemic—commonly known as novel coronavirus—which has brought “major upheaval” to the aviation industry.
The ACCC was directed by Treasurer Josh Frydenberg on June 19 to monitor and provide quarterly reports on the prices, costs, and profits of the domestic airline industry to inform policy.