ACCC chairman Rod Sims has said that he is watching “extremely closely” to prevent anti-competitive behaviour from Qantas, as administrators work to resuscitate Virgin Australia.
The news comes after Qantas chief executive Alan Joyce hinted at post-virus bargains, designed to stimulate demand in the domestic travel sector.
“On Melbourne-Sydney you could see Jetstar have $39 airfares, you could see $19 airfares and we’ll still cover our cash costs on those flights,” he told investors on Tuesday.
However, rock-bottom deals like these could serve to price Virgin Australia out of the market. The ACCC has indicated in previous weeks that it will take swift action against any attempts to artificially push down prices or swamp airline routes.
According to Sims, cheap airfares alone are not cause for a breach of competitive practice laws. The commissioner said he is monitoring the situation as it unfolds for evidence of predatory pricing.
“It means we the ACCC need to be watching very carefully as this new player emerges to make sure that its ability to be an effective competitor is not killed at birth,” said Sims.
“We just need to make sure there’s no conduct that has the purpose or effect of squashing a competitor.”
Sims also indicated that the ACCC is still investigating complaints brought by Virgin chief Paul Scurrah in March. At the time, Sims told the ABC that Scurrah believed that Qantas was “engaging in anti-competitive conduct, designed to damage Virgin as a competitor”.
It is as yet unclear whether the signs of strong competition from Qantas have dampened enthusiasm among prospective Virgin buyers.
Last week, Virgin’s administrator – Deloitte – told shareholders that there are 20 buyers showing interest in the airline.