Joint Media Release
SENATOR THE HON BRIDGET McKENZIE
SHADOW MINISTER FOR INFRASTRUCTURE, TRANSPORT AND REGIONAL DEVELOPMENT
LEADER OF THE NATIONALS IN THE SENATE
SENATOR DEAN SMITH
LIBERAL SENATOR FOR WESTERN AUSTRALIA
SHADOW ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY
31 August 2023
LABOR MUST BOOST AIRLINE COMPETITION BY REINSTATING ACCC REPORTING
The Albanese Government is failing Australian families and businesses by deliberately exempting Qantas, Virgin, and the wider aviation sector from its recently announced review of competition policy.
Shadow Minister for Infrastructure, Transport and Regional Development, Senator Bridget McKenzie said the Prime Minister has a lot of questions to answer as to why the Government seems determined to stifle competition and keep the cost of airfares at very high levels.
“Australians are paying more, reliability is going down not up, and flight cancellations are more not less frequent,” Senator McKenzie said.
“At every turn the Albanese Government seems to be avoiding its regulatory responsibilities to oversee a competitive, reliable and affordable airline industry.”
“Labor refuse to add competition-creating flexibility to slots at Sydney airport, they abolished the Australian Competition and Consumer Commission’s monthly reporting on domestic airline competition, blocked Qatar Airways from providing additional flights to the Middle East and Europe, and now they are exempting this vital sector from examination by the newly established competition review.
“The fact this exemption was a surprise to members of the Competition Taskforce, including former ACCC chair Rod Sims, is a further indication the Government has some hidden reasons for going soft on airlines,” Senator McKenzie said.
Coalition competition spokesman Senator Dean Smith said CEO Alan Joyce’s evidence to the Senate Cost of Living Committee this week again failed to convince Australians that Qantas should enjoy privileged and protected status among the nation’s air carriers – and reinforced the need for monitoring the sector’s competitiveness generally.
The Coalition is now calling on the Treasurer to direct the ACCC to resume monitoring the aviation industry and investigate airline competition and prices, costs and profits relating to both domestic and international air passenger transport services.
The direction, which would invoke the ACCC’s powers under the Competition and Consumer Act 2010, should require the competition watchdog to report on this monitoring at least once a quarter for a further three years.
Despite the last ACCC report finding that the Australian airline industry had room for increased competition, both Mr Joyce and Qantas corporate affairs head Andrew McGinnes have dismissed the suggestion of ongoing oversight.
Senator Smith said their reluctance is particularly disappointing given the obvious need for the cheaper prices and greater flexibility extra air services would deliver.
“Australians deserve the best and most competitive experience possible when travelling in the world’s eighth largest domestic aviation market,” Senator Smith said.
“The level of competition is insufficient to meet the needs of consumers, especially those living in isolated cities and regional areas outside the ‘Golden Triangle’ of Brisbane, Sydney and Melbourne.”
It is worth noting that the last ACCC report, published in June, found:
- Qantas Airways reported an underlying profit before tax of $1.43 billion for the first half of the 2022-23 financial year, 49% higher than the previous first half record in 2017 / 2018.
- The domestic operations of Qantas and Jetstar were responsible for most of the recent result with underlying earnings before interest and tax of $915 million.
- Although Qantas’ market share decreased to 34.8% in January, the combined market share of the Qantas Group remained at 61.7%
The report also confirmed the ACCC received 1,740 contacts involving Qantas in 2021-22, the most of any company and 68% higher than the previous year, observing that “such an increased level of contacts is generally indicative of a high level of dissatisfaction with that company”.
Senator Smith said both the report’s findings and recent events highlighted the need to reinstate monitoring.
“The fact Labor’s newly announced competition review will not consider aviation is further justification for the ACCC oversight being called for by the Coalition,” Senator Smith said.
“In Andrew Leigh’s first real attempt at bringing down the barriers to effective competition in the Australian economy, he has been blocked by his ministerial colleagues from looking at airlines.
“It should be very clear to the Albanese Government that the ACCC needs to continue its analysis and promotion of greater airline competition well into the future.”