Australia’s antitrust regulator will “remain vigilant” to any domestic airfare hikes by Qantas and Virgin Australia, following Regional Express’ (Rex) withdrawal from the market.
In its quarterly airline competition report, the Australian Competition and Consumer Commission (ACCC) says that while airfares are on the decline for the first half of 2024, consumers could face reduced choice – and consequently higher fares – in the longer term.
“[The] ACCC cautions that consumers may miss out on the benefits of a more competitive domestic airline market if Rex is unable to re-commence its services between metropolitan cities,” says the commission.
Rex suspended all domestic jet operations as it entered administration on 30 July, but said it would maintain its regional turboprop operations. It was the second high-profile airline failure in Australia, after the collapse of low-cost operator Bonza in May amid mounting financial troubles.
The commission notes that while Bonza and Rex were relatively smaller compared to its larger compatriots, their presence meant increased competition on certain key metro routes, resulting in lower airfares for travellers.
ACCC commissioner Anna Brakey says: “With the suspension of Rex’s services between metropolitan cities, we are closely monitoring airfares and remain vigilant to any increases in prices on routes that Rex is no longer flying on.”
She adds: “A competitive aviation sector is important to all Australians and the ACCC remains engaged with stakeholders so that we can understand and protect competition in this sector.”
Brakey’s comments are the first time the ACCC has weighed in on Rex’s collapse. The Australian government has promised to guarantee the airline’s regional operations, citing the importance of regional connectivity.
