- The Australian competition regulator will consider allowing Rex airlines to continue coordinating with Qantas and Virgin on 10 regional flight routes.
- It comes as the coronavirus pandemic has wreaked havoc on the travel industry and resulted in “exceptionally low demand” for flights.
- Under the proposed authorisation, the ACCC will allow the airlines to coordinate on flight routes until June 30, 2021.
- Visit Business Insider Australia’s homepage for more stories.
The Australian Competition and Consumer Commission (ACCC) will consider allowing Regional Express to continue coordinating with Qantas and Virgin on regional flight routes amid the coronavirus pandemic.
In a proposed authorisation the regulator released on Thursday, Rex will be allowed to keep coordinating with fellow airlines Virgin and Qantas on 10 regional routes across New South Wales, Victoria, Queensland and South Australia. These include the Sydney to Wagga, Adelaide to Port Lincoln and Cairns to Townsville flights involving Qantas and Rex.
The proposed authorisation will broadly come under the same terms of the interim authorisation the ACCC approved in March, where it allowed the three airlines to coordinate flight schedules and agree to share revenue on them. This latest authorisation proposal would continue this cooperation until June 30 2021.
ACCC Deputy Chair Mick Keogh said in a statement airlines are experiencing “exceptionally low demand” during the pandemic.
“Allowing the airlines to coordinate in this way will contribute to the ongoing provision of services for passengers flying on these 10 regional routes,” he said.
This coordination could mean each carrier on a route would operate one daily service and then share the revenue between the airlines. Or it could mean one airline would suspend operation on a route to allow another airline to operate a service.
While these actions would normally raise concerns about competition among the carriers, the ACCC believes it is in the public’s interest if they are allowed to continue.
“The extraordinary circumstances mean that coordination is in the public interest given the relatively short period for which it will be authorised, and the conditions of the proposed authorisation,” Keogh said.
The authorisation, however, will be on the condition that airlines don’t charge fees higher than those set on February 1 2020. “This will address the risk that the reduction in flights on those routes will lead to airfares above competitive levels,” the ACCC said.
“We anticipate that the arrangements will help support the continuity of essential air services for regional communities on the relevant routes while the pandemic is significantly affecting air travel,” Keogh added.
Qantas and Virgin have been severely affected by the coronavirus pandemic. Virgin went into voluntary administration before receiving a lifesaving bid from Bain Capital to rescue to the airline.
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