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19 October, 2023

ACCC to resume domestic aviation monitoring after senate recommendation

An aerial view of Kingsford Smith Airport in Sydney.

By James Harrison

The government has announced it will reinstate the monitoring of domestic aviation by the Australian Competition and Consumer Commission (ACCC) after cancelling it in July.

A statement released yesterday afternoon by transport minister Catherine King said the quarterly report will “ensure healthy competition plays a key role in shaping the future of the sector.”

The restarting of the report comes after a senate inquiry into bilateral air service agreements recommended that the government resume this report, following allegations of anti-competitive behaviour by Qantas and Virgin.

The ACCC will monitor costs of airfares, service standards, and level of protection across the industry for the next three years in an attempt to bring light to any inappropriate market conduct that may occur. The report will also monitor the level of capacity the airlines are putting on each route, accessibility for people with a disability, and industry performance factors like cancellations and delays.

Major airlines Qantas and Virgin have been accused of “slot hoarding” at Sydney Airport, whereby the carrier knows it will cancel a flight despite deliberately scheduling it to secure the slot at the airport under it’s use-it-or-lose-it scheme. Both airlines have denied participating in this conduct, despite the ACCC currently investigating Qantas for selling tickets on flights it had already cancelled.

Qantas aeroplanes and tail fin with the distant view of downtown Sydney (iStock.com/oversnap)

Qantas originally opposed the resumption of the monitoring, while Virgin, Rex and Bonza supported the report. Qantas Group chief executive Vanessa Hudson told the senate inquiry that the group believed the ACCC’s monitoring sufficiently regulated the sector’s level of competition.

The new monitoring report will begin at the end of the year and help inform the Albanese Government’s aviation white paper, which will inform policy for Australian aviation up to 2050.

“The former government scheduled the end of monitoring for June 2023, but we’ve found a better way to restart it. The 12 reports under the previous government found declining service standards and higher prices but were not acted on. In contrast, the Albanese government will use ACCC monitoring to help inform the aviation white paper,” the statement said.

Qantas said that it will provide information requested by the ACCC to support this extended monitoring as it did previously.

(Featured Image: An aerial view of Kingsford Smith Airport in Sydney)

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