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Former prime minister Scott Morrison directed the ACCC to deliver quarterly updates on airline competition for a three-year period from June 2020 as the industry reopened after COVID-19 lockdowns. In its last report delivered in March,the ACCC revealed it was contacted more times about Qantas than any other company over the 2022 financial year. It also observed the average fare revenue across all routes had fallen significantly on the previous corresponding period.

Industry sources said ACCC executives would like the reports to continue,but that would require the Treasurer’s direction,as the reports rely on Treasury funding.

Cass-Gottlieb acknowledged the average cost of airfares had fallen from a 15-year peak at the end of 2022,but remained above pre-pandemic levels. So far,no evidence of price gouging has been identified in the reports,but the watchdog said in December all carriers needed to reduce fares as capacity returned to the market.

She also said elements of anti-competitive behaviour,such as theinaccessibility of slots at Sydney Airport, and other industry developments includingthe launch of new-entrant Bonza are being watched.

Sydney Airport chief executive Geoff Culbertrecently hit out at the outdated regulation which governs its slot management system and said its COVID-19 recovery had been affected by high air fares and reduced capacity. He said last month he hoped the government’s response to the Harris review intoSydney Airport’s demand management scheme would add flexibility,a sentiment echoed by the ACCC.

“We are hoping that the review will open up the capacity for new entrants and allow the expansion of new entrants,” Cass-Gotlieb said.

‘Who knows what will happen when the monitoring stops?’
James Goodwin,Australian Airports Association chief

Australian Airports Association chief executive James Goodwin said now was clearly not the time to stop active monitoring and reporting.

“If the ACCC has got ongoing concerns with the airline sector,and we know customers do,it’s a time to keep actively monitoring,” he said.

“Who knows what will happen when the monitoring stops?”

Cass-Gottlieb also said Australia’s merger laws needed an overhaul,and the commission’s lack of power meant businesses were “pushing the boundaries” of the informal regime.

“Australia’s current merger control model is best described as voluntary and enforcement-based,” she said.

“There is no requirement for merger parties to notify the ACCC of proposed mergers and acquisitions or to wait for clearance before they can complete.

“Given that there are no up-front information requirements for an informal review,merger parties are increasingly giving us late,incomplete,or incorrect information. An increasing number are threatening to complete their transaction before we have finalised our review.”

Cass-Gottlieb said this left the commission negotiating with the companies to get enough information to complete its review. If the ACCC believes a merger is anti-competitive and the companies don’t volunteer to stop the transaction,the commission has to go to the Federal Court to prevent it.

“Merger control is an important lever used by competition authorities to help preserve a competitive economy. Changes to Australia’s current regime are needed. It is no longer fit for purpose,” she said.

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