Nationals Senator Calls for Powers to Force Australia’s National Carrier to Sell Subsidiary

A Nationals senator has urged the Labor government to consider forcing Australia’s flag carrier Qantas to sell its subsidiary airline, Jetstar, claiming it will improve competition in the aviation industry.
On Sept. 9, shadow transport minister and Senate Nationals Leader Bridget McKenzie said it was time for the government to stop “protecting” Qantas and examine the use of divestiture powers.
McKenzie said the government had helped maintain Qantas’ market dominance with its decision to block competition from Qatar Airways, and prevent the Australian Competition and Consumer Commission (ACCC) from monitoring airfares.
At the same time, the shadow minister said the government’s unwillingness to carry out aviation reform was detrimental to Australian consumers and businesses.
“Australians want an airline sector where you have genuine choice, where your plane takes off and lands on time, and your bags arrive at your destination with you.”
In fact, the suspension of Rex has seen ticket prices for Virgin and Jetstar rise, as of Sept. 9.
Previously Rex offered air fares for $87 to fly between Brisbane and Sydney inclusive of luggage, an offering that Virgin matched. Further, during Rex’s time operating out of the capital cities, it competed directly with Virgin on price and service, while forcing Jetstar into lowering its pricing.
However, without the regional airline, Qantas, Virgin, and Jetstar now operate in three different pricing tiers with limited overlap.
“We all want to see more competition and cheaper fares, but this is a crazy economic policy,” he said in an interview with Sky News.
“Let’s say you do divest Qantas of Jetstar. Who buys it?
“And if no one buys it, then you’re left with less competition in the aviation market, and we’re all worse off.”
At the same time, the assistant minister said the Labor government had taken action to encourage more competition in the sector.
Thistlethwaite gave the example of the current Sydney airport, where the government had implemented a new system to manage the slots differently.
“We acted, we brought in a new system to manage those slots to make it easier for new operators and competitors to get into that market, to get access to those slots,” he said.
“I think that the Western Sydney airport coming online in a couple of years will make a big difference and there will be an opportunity for new players to come into the market.”
Nevertheless, the assistant minister acknowledged that the Australian market was not a big one and that the government had to “make the best of what we’ve got” to maintain ongoing competition.
Qantas also agreed to compensate more than 86,000 affected customers with $20 million cash.