Virgin Australia asks competition watchdog to investigate Qantas 'campaign' against it
Virgin Australia has written to the competition watchdog complaining about allegedly anti-competitive attacks on the airline by the Qantas boss, Alan Joyce, Guardian Australia has learned.
It is understood Virgin’s chief executive, Paul Scurrah, wrote to the chairman of the Australian Competition and Consumer Commission, Rod Sims, on Sunday.
Scurrah’s complaint focused on a series of statements attacking Virgin that Joyce has made to staff and media over the past week, as Australian airline companies reel from coronavirusinspired travel bans that have largely grounded their fleets.
“I have today written a letter to Rod Sims, chairman of the ACCC, to investigate public commentary and an industry wide campaign by Qantas that is designed to ensure a lessening of competition in the aviation sector,” Scurrah said in a message to staff, obtained by Guardian Australia.
He said he was in “daily discussions with government to ensure we get the support we need to get through this crisis and have been advocating on behalf of Virgin Australia and the industry as a whole”.
In the past few days Joyce has made several statements critical of Virgin’s management and ownership.
During an appearance on Sky News on Friday Joyce said the government should not nationalise Virgin and should “not look after the badly managed companies which have been badly managed for 10 years”.
In a phone call with staff, believed to have taken place on Thursday, Joyce reportedly asked workers to lobby their MPs on behalf of Qantas and said that “governments are definitely not there to support a company that’s owned by Singaporeans, Chinese, Abu Dhabi and a British billionaire” – a reference to Virgin’s key shareholders.
On Thursday, when Qantas grounded most of its fleet, Joyce told the media it was “survival of the fittest” in the airline industry and the airline was working on “making sure we are last man standing”.
Virgin, Qantas and the ACCC declined to comment.
Australia’s airline industry is in crisis because of the travel bans, which include a ban on non-citizens coming to Australia and strict quarantine requirements imposed by some states.
The federal government has waived about $715m in airline taxes and charges, but some in the sector say this isn’t enough to keep them going, raising the spectre of nationalisation.
Regional airline Rex said on Monday it would be closing all passenger flights, except in Queensland, if it did not get a bailout by the end of the week.
The deputy chairman, John Sharp, said the benefit to Rex from the package was “only $1m a month, which is grossly insufficient to cover the $10m a month we expect to lose running the heavily reduced schedule we announced last week”.
On Monday, Virgin told the ASX it expected its capacity, which it has already slashed, would be further cut.
Globally, Gulf airline Emirates also dramatically reduced flight numbers.
Nationalising Qantas if the situation gets worse is supported by 50% of Australians, according to a survey conducted by the Transport Workers Union.
The union, which is locked in dispute with Qantas over its decision to force 20,000 employees it has stood down to draw on their accrued leave, said its survey also showed that 62% of Australians believed the government should receive shares in companies it bails out.
Ratings agency Moody’s said airline bailouts were likely across the world and would probably need to involve governments buying shares in operators.
“Many airlines will require financial support from federal and state governments, particularly if more aggressive measures to contain the spread of the virus are implemented,” the agency said in a report released on Monday.
“Indeed, globally, various regulatory relief measures are either in process or under consideration to cushion the ensuing economic consequences and an abrupt industry downturn that is now well underway.
“However, if governments provide only interim period liquidity support, while potentially ensuring survival, balance sheet damage will not be easily restored by an extended operational recovery in the absence of additional equity capital.”