Aviation

Rex allowed to continue coordinating regional flights with Qantas and Virgin

Regional Express will be allowed to continue to coordinate flight schedules with Qantas and Virgin Australia on 10 regional routes in response to the COVID-19 pandemic, under a proposed authorisation released today by the competition watchdog.

The ACCC’s draft determination proposes the grant of authorisation on broadly the same terms as the interim authorisation that was granted in March. The authorisation will extend until 30 June 2021.

The coordination may involve arrangements such as each carrier on a route operating one daily service, with revenue shared between carriers, or an operator suspending operation on a route to allow another carrier to maintain a viable service.

The proposed authorisation is conditional on airlines charging fares no higher than those in place on 1 February 2020, which the ACCC said will address the risk that the reduction in flights on those routes will lead to airfares above competitive levels.

The proposed authorisation is also subject to reporting conditions which will allow the ACCC to closely monitor the proposed conduct.

“The ACCC recognises that airlines are still facing significant challenges, including exceptionally low demand, due to the ongoing impacts of the COVID-19 pandemic,” ACCC deputy chair Mick Keogh said.

“Allowing the airlines to coordinate in this way will contribute to the ongoing provision of services for passengers flying on these 10 regional routes.”

“We acknowledge that such coordination between airline competitors in this way would normally raise competition concerns. However, 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.

“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.”

The ACCC will now seek submissions on the draft determination. Details on how to make a submission, including a statement of reasons, are available on the ACCC’s public register.


Featured image source: iStock/Ryan Fletcher

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