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Aviation will remain a priority for the ACCC in 2025–26 in the wake of the collapses of Rex and Bonza last year.
In a speech to the Committee for Economic Development Australia (CEDA) on Thursday, ACCC chair Gina Cass-Gottlieb noted that domestic airfares have increased following the reassertion of the Qantas-Virgin duopoly.
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“When Rex first offered intercity routes, the ACCC observed a decrease in average airfares. Conversely, in the months following the withdrawal of Rex’s major city services last year, average airfares increased,” she said.
“A recent report by Treasury into Australia’s domestic aviation sector reveals that the presence of a single additional airline on a route leads to airfares that are 5 to 10 per cent lower. When three competitors fly a route airfares halve compared to a route with a single monopoly airline. And with four or five competitors, the price drops further still.”
Additionally, Cass-Gottlieb, said, extra competition has benefits beyond lower airfares.
“Before its collapse, Bonza operated 37 routes – 35 of which connected regional locations and 30 of which had no other airline service,” she said.
“Bonza offered more affordable airfares and the convenience of direct connection to regional and holiday destinations not offered by other airlines. Similarly, Rex’s regional routes are highly valued by the communities they serve.
“Greater competition in aviation gives consumers more choice in the airfares they pay, the reliability and quality of airline they fly with, and the routes they travel.”
Cass-Gottlieb said Australia’s recent aviation history is “illustrative” of the benefits of effective competition, and pledged to keep the watchdog’s focus on the sector.
“The Australian aviation sector connects communities, families and supply chains across our nation. It supports employment and social and economic inclusion across our regions. And it enables industries across our economy – tourism, mining, construction, agriculture, manufacturing and higher education – to be sustained and diversify,” she said.
“The recent record of entry and exit in this vital sector is a good example of the significance of competition for consumers, business and the economy.
“In the financial year ahead, our priority to address competition and consumer issues in aviation will continue, as will many of our key priorities, as we bring renewed focus to address the most pressing challenges and opportunities before us.”
The ACCC restarted its monitoring of domestic airline competition in November 2023.
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