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Report by ex-ACCC chair says Qantas does price gouge

written by Adam Thorn | February 7, 2024

Victor Pody shot Qantas’s second A220, VH-X4B, when it arrived in Melbourne for the first time.

A long-serving former ACCC chair has accused Qantas of price gouging in a new report into anti-competitive practices across a variety of industries.

Allan Fels, who helmed the competition watchdog for eight years, also recommended airport prices be formally regulated and the removal of restrictions on domestic and international aviation.

The report was commissioned by the ACTU union and was informed by 750 public submissions, including contributions from academics, experts, think tanks and businesses.

The Flying Kangaroo has consistently denied any allegations of so-called ‘price gouging’, particularly those made by rival Rex.

“This report does not in general recommend the introduction of price regulation,” it concluded. “However, it supports present areas where there is price regulation such as in the fields of energy and telecommunications.


“There is also a very strong case for the introduction of price regulation in relation to airports, which hold a very clear monopoly.

“In the area of airport charges, the power of regulation should be applied. This report also found the need for reviews of international and domestic restrictions on competition.”

More broadly, the report argued many businesses are resorting to “dodgy practices” such as using inflation as a bogus excuse to increase prices, known as ‘excuseflation’.

ACTU secretary Sally McManus said, “We welcome Professor Fels’ report and note that it has found what working people suspected. Some big businesses have added to inflation and have too much power over customers, workers, and supply chains. This needs to be reined in.”

It comes after Australian Aviation reported last month how a federal government competition taskforce released data suggesting that increasing competition on major routes can dramatically slash airfares.

Dr Andrew Leigh, the Assistant Minister for Competition, pointed to figures from the taskforce showing that airfares average 39.6 cents per kilometre on routes with only one carrier, 28.2 cents on routes with two carriers, and 19.2 cents with three.

“In other words, the price per kilometre is halved when three competitors fly a route compared with the situation when there is only a single monopoly airline. With four or five competitors, the price drops further still,” he said.

“Aviation competition has been fundamental to connecting Australian cities to one another and connecting our country to the world. Still, many Australians suffer from a lack of competition.

“For example, for a resident of Darwin, it is often cheaper to fly from Darwin to Singapore than it is to fly from Darwin to Sydney – even though the international flight is longer than the domestic one.”

The government is undertaking a review of the sector ahead of the release of its Aviation White Paper next year, which will set policy direction towards 2050.

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