ACCC authorises Regional Express to coordinate with other airlines

The ACCC has today granted interim authorisation to Regional Express (Rex) allowing it to coordinate flight schedules with Virgin Australia and Qantas Airways on ten important regional flight routes during the COVID-19 pandemic.

The interim authorisation will also enable Rex, QantasLink and Virgin to share revenue from providing services on the routes. Importantly, it is conditional on airlines charging fares no higher than those in place on February 1, 2020, meaning the airlines will not be able to coordinate to raise prices.

“We recognise this is an urgent request. This authorisation will help provide certainty for regional flight operators to support services on these routes for those who need to use them,” ACCC Chair Rod Sims said.

“We hope that this temporary measure will also support airlines’ ability to again compete with each other on these routes once the pandemic crisis has passed.”

“Airlines are facing significant challenges due to the COVID-19 pandemic, including rapidly escalating travel restrictions. The ACCC stands ready to urgently assist airlines with any coordination arrangements that are necessary and appropriate during this crisis,” Mr Sims said.

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 ACCC is able to review the interim authorisation at any time.

Having granted interim authorisation for the arrangements, the ACCC will seek feedback on Rex’s application for authorisation. Details on how to make a submission will be available on the ACCC’s authorisations public register. More information, including the ACCC’s statement of reasons, is available at Regional Express Pty Ltd.

Background

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Notes to editors

The routes concerned are:

New South Wales

  • Sydney – Wagga Wagga (Rex and QantasLink)
  • Sydney – Dubbo (Rex and QantasLink)
  • Sydney – Albury (Rex, QantasLink and Virgin Australia, noting Virgin Australia has announced it is suspending services on this route until 14 June 2020)
  • Sydney – Armidale (Rex and QantasLink, noting Rex has announced it is suspending services from 6 April 2020)

Victoria

  • Melbourne – Mildura (Rex, QantasLink and Virgin Australia, noting Virgin Australia has announced it is suspending services on this route until 14 June 2020)

South Australia

  • Adelaide – Port Lincoln (Rex and QantasLink)
  • Adelaide – Whyalla (Rex and QantasLink)
  • Adelaide – Kangaroo Island (Rex and QantasLink, Rex has announced an exit in July 2020)

Queensland

  • Cairns -Townsville (Rex and QantasLink)
  • Townville – Mount Isa (Rex and QantasLink)

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