ACCC airport price warning

THE Australian Competition and Consumer Commission (ACCC) has issued its latest Airline Competition in Australia report, citing concerns from some carriers that “airports may seek to significantly increase charges to airlines in order to recover lost profits from the pandemic”.

The report summarises the drastic downturn in Australia’s aviation sector due to COVID-19 domestic and international border closures, but says “the industry remains optimistic that demand for domestic travel, especially to leisure destinations, will bounce back strongly when vaccination targets are reached and border restrictions are eased”.

Qantas welcomed the report, with CEO Alan Joyce noting that in recent months some airports had been using their “unregulated monopoly” position to aggressively lift charges.

“There’s nothing really stopping them charging whatever they like.

“We can’t say to our passengers ‘we’ve lost $20 billion in revenue due to COVID so we are going to increase airfares accordingly to recover our losses’ because it’s highly competitive between airlines, and it’s not the right thing to do,” he said.

“There’s no way airports should be able to do the same to their customers,” Joyce said.

The ACCC report also noted that since the pandemic began the Qantas Group had extended its dominance in regional areas, in contrast to Virgin and Rex.

Virgin’s shift towards more value-conscious travellers also merited further monitoring by the ACCC, with the Commission saying this “may result in Qantas facing less competition at the premium end of the market.”

The report is now available for download at accc.gov.au.