Regional Express Terms Qantas Fares as Predatory

Submitted by Jim Thesiger on 28 December, 2009 - 05:42

Australian airline giant Qantas (QAN) has been accused by Regional Express of getting involved in predatory pricing on its Mackay-Townsville route although it took the decision to axe its route between the Queensland cities that is to become effective from 1st of January. The Biggest independent regional carrier of Australia recently declared that it will no longer fly across the route only three after launching its operation over there where it was competing with QantasLink. Earlier this month Regional Express filed a complain with the Australian Competition & Consumer Commission alleging that Qantas regional subsidiary reduced its fares by as much as 35 percent and also reduced services to Torres Strait and Weipa in an attempt to dump 40,000 seats to the Mackay-Townsville route at a yearly basis. According to Rex, the reduced fares offered by QantasLink made the route unsustainable for it and termed the Qantas move as a predatory practice.

On behalf of Regional Express, its managing director Jim Davis stated that his side is not going to drop the complaint. He also added that Rex wants ACCC to conduct a complete investigation regarding the issue. Mr. Davis termed QantasLink’s actions as very aggressive and claimed that Qantas has reduced its fares well below the cost of providing the service which he described as predatory. However, QantasLinked denied the allegation although it admitted that it did realised that the competition regulator might need to conduct an investigation.

It is to be mentioned that QantasLink has recently took initiatives to introduce 74-seat Q400 aircraft to Port Lincoln which is considered as one of the best routes of Rex. Mr. Davis said that Rex has no problems to compete with Qantas in the Port Lincoln route but also warned against any attempt to bring in excessive low fares which can turn out to be untenable.