By Kym Anderson 17/Sep/2020

ACCC Allows Rex, Qantas and Virgin to collude on Flights to Regional Centres

The ACCC has given final authorisation for Rex, Qantas and Virgin to work together to provide flights to regional Australia, until June 2021. Rex made the application to the ACCC in response to many regional Australians' cry for help, after Virgin abandoned routes and the effects of the pandemic made routes unviable. The Federal government has provided funding to Qantas and Virgin to continue servicing regional Australia, however the funding is due to expire shortly.


When that happens, there is a risk the airlines may cut services and routes or charge exorbitant airfares. The ACCC has granted the airlines permission instead to collaborate on flight schedules so they are not only operating flights at the most popular times of day, and to share income on the routes.  Regional Australians will be relieved that the airlines are not to set a fare on the 10 routes below that is higher than the fares which were in place as at 1 February 2020. 

Rex further states that its fares are on average 15% lower across its network than this time last year.

The affected routes are:

New South Wales 

Sydney – Wagga (Rex and Qantas)  

Sydney – Dubbo (Rex and Qantas)  

Sydney – Albury (Rex, Qantas and Virgin Australia, noting Virgin Australia has suspended services on this route

Sydney – Armidale (Rex and Qantas, noting Rex has suspended services on this route

Victoria 

 Melbourne – Mildura (Rex, Qantas and Virgin Australia, noting Virgin Australia has suspended services on this route

 South Australia 

Adelaide – Port Lincoln (Rex and Qantas)  

Adelaide – Whyalla (Rex and Qantas

Adelaide – Kangaroo Island (Rex and Qantas, Rex had announced an exit from this route in July 2020, but is currently still servicing it

Queensland 

Cairns –Townsville (Rex and Qantas)  

Townville – Mount Isa (Rex and Qantas)

The ACCC has allowed the sharing of information, pricing and revenue by the three airlines during the pandemic on the basis that it benefits the public to do so in the short term, and, that it helps ensure there is competition in the airline industry for regional Australians, as we come out of the pandemic and travel takes off again.

Rex made the application to the ACCC in March this year, but has since found its self at logger heads with Qantas. Qantas has attempted to cut Rex's lunch by starting flights to Orange in NSW, and Rex has been making plans to move in on the capital city routes between Melbourne, Sydney and Adelaide. Rex informed the ACCC that as yet, it has not been able to come to any arrangement with Qantas, especially QantasLink, to work together. Rex is required to provide the ACCC with monthly updates on the collaborations. The final determination was made on 11 September this year and is available on the ACCC website.

 

 

Kym Anderson
Kym Anderson

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