The Federal Government has decided against funding the Australian Competition and Consumer Commission’s (ACCC) monitoring of Aussie airlines beyond June – and it’s a move that has some worried.
The ACCC began its reviews of airline behaviour in 2020 to ensure healthy competition within the industry.
It reported on airfares and market share, and issues like flight delays, baggage handling and call centre waiting times. But with its last report due in mid-2023, there are concerns for the future of fair play among airlines.
According to The Australian, the newest player in the local market, Bonza, said the move to wind up ACCC scrutiny was like “leaving young kids unsupervised in a candy store and hoping everything’s going to be okay”.
“The ACCC mechanism was put in place to ensure dominant carriers don’t take advantage of their market position and that same market dominance still largely exists today,” Bonza CEO Tim Jordan said.
“As Bonza enters the market that oversight is more important than ever but unfortunately it’s now being switched off. That really doesn’t seem right for the domestic aviation market.”
A Rex Airlines spokesperson was also concerned.
“At a time when Qantas is gouging passengers with the highest ticket prices in history it’s vital the government continues to closely monitor airfares,” he said.
AAA take
Australian Airports Association CEO James Goodwin told The Australian that airline monitoring should continue “given the cost of airfares and the profitability of airlines”.
“If this is the market and the behaviour that we’re seeing when the sector is being monitored, consumers might be concerned about what might happen when the monitoring stopped,” he said.
While the ACCC will end its regular scrutiny of carriers’ domestic operations, the Bureau of Infrastructure, Transport and Regional Economics (BITRE) will continue to publish a monthly domestic airfare index, a spokesperson for Federal Transport Minister Catherine King stated.
Meanwhile, an ACCC spokesperson said the commission “will continue to enforce and drive compliance with consumer and competition laws in the airline industry”.
In its most recent report released in early March, the ACCC found domestic airfares had dropped from historic highs at the end of 2022, but they remained above 2019 prices.
QF-EK ok … for now
Elsewhere, the ACCC has given Qantas and Emirates an interim nod to continue collaborating on passenger operations while it makes a further review of the tie-up.
“The interim authorisation commences immediately and allows the parties to continue coordinating their operations while the ACCC considers and evaluates the merits of the substantive application for authorisation,” ACCC Commissioner Anna Brakey said.
“The ACCC may review the interim authorisation at any time and its interim authorisation decision should not be taken to be indicative of whether or not final authorisation will be granted.”
