ACCC having a look at competition or lack of it

[UP4014]

While not news to most of us here.

Live: ACCC says lack of competition is causing airfares to soar, ASX to jump as US debt deal secured

The Australian consumer watchdog has taken aim at the airline industry, saying a lack of competition is driving up prices and resulting in poorer service, while the ASX is set to rise after a US debt deal was reached. Follow live.

www.abc.net.au

 

[CaptJCool]

Qantas and Virgin given little incentive to cheapen air fares, watchdog warns

ACCC warns airline industry is at ‘critical juncture’ with a developing duopoly stunting competition

www.theguardian.com

The J class fare pricing has hallmarks of mini monopoly when the same route has vastly higher prices by one over all other competitors.

However, the forward projections must be softening when the higher priced airline is dropping Red-E deal, not just once, by 25% plus for the dates immediately following the July school holidays

$229, $199, $159

That said, pricing on each route appears to have capacity characteristics that lend themselves to higher or lower prices simply by the “restricted” daily flights

 

[UP4014]

I listened to the ABC this morning and the airline peak body was blaming the monopoly on airport ownership and lack of competition there!

 

[jrfsp]

"A4ANZ chief executive Alison Roberts warned policies to support passengers could have "unintended consequences", saying the cost of schemes overseas has pushed airfare prices higher."

I like to see the evidence for that.....

 

[WilsonM]

Where is this competition going to come from? QF have been priced at a premium for years, to reflect their perceived status as the 'premium' carrier (whether this is true or not is besides the point). VA is more battling with JQ, ZL and now AB rather than QF.

As companies force more and more people back into the office, see Commbank and NAB, QF's domestic profits will still be high. Australia traditionally has only had a duopoly in our skies, and how could it change? VA becoming a full-service and contesting QF head on? We saw how that ended. Another airline start-up?

It just seems to me that there's a lot of talk about how lack of competition is a thing, but then zero actual ways to increase said competition.

 

[MEL_Traveller]

The ‘Australia tax’ is nasty. Top tier airlines regularly offer business class fares to australia for half the price we have to pay from here. It’s a disgusting ‘middle finger’ to the aussie public

Most recent example is CX offering Tokyo to Australia business class for AUD3000, return. Why not offer that from here?

 

[Rnwillia]

The ‘Australia tax’ is nasty. Top ties airlines regularly offer business class fares to australia for half the price we have to pay from here. It’s a disgusting ‘middle finger’ to the aussie public

Most recent example is CX offering Tokyo to Australia business class for AUD3000, return. Why not offer that from here?

I’d like to see a response to that from CX Mel?

 

[RooFlyer]

I listened to the ABC this morning and the airline peak body was blaming the monopoly on airport ownership and lack of competition there!

Oh, and "we are getting better ..."

It just seems to me that there's a lot of talk about how lack of competition is a thing, but then zero actual ways to increase said competition.

I think you are right, so the way to get things fairer for the consumer is to have a big stick at hand in case the airlines keep treating us like cough - because they can.

 

[Blackadder]

If slots aren't available for the newcomers , what do the expect to happen?
At least when the Western Sydney Airport opens, that will open up the most slots in several decades.

 

[Saab34]

The Bonza comment is very interesting. Would be good to get Bonza some Sydney slots, really would open up some regional areas to the big smoke.

 

[HS-TQE]

Question is whether if the foreign airlines are willing to spend the $ for their staff to stay in Australia for days or weeks at a time if they start operating domestic legs with full cabotage rights.
Also, not many airlines would be willing to do 5th freedom, let alone cabotage in Australia, those days when aircraft are better utilised elsewhere such as another Asia-Europe rotation for example.

Alternatively apart from maybe QR, EK or maybe SQ. None of the other carriers really doesn't have the money to set up an Australian subsidiary with foreign staff/rates.

 

[kangarooflyer88]

Cabotage being illegal like the tooth fairy in the sense that both are great myths. The fact of the matter is you can do it and there is very little that airlines or governments can do to stop you from it. For instance, I would fly United Airlines domestically in Canada all the time. How are they gonna know you're breaking the rules if the ticket says something like Toronto to Denver to Vancouver? Could it be cabotage or could it be a legitimate ticket? It's impossible for anyone to say! The traveller could argue that they are meeting a colleague in Denver for a couple hours before heading onwards to Vancouver. Nothing illegal there (albeit it is a weird itinerary). And of course the other recourse we have as Canadians is getting in our car driving an hour south to the US and flying out of there for a Canadian destination. That's not cabotage per se but it's always an option at hand. Now I know you can't do something as simple here but the possibility of flying NZ international flights to get to a domestic destination are possible.

-RooFlyer88

 

[MEL_Traveller]

Cabotage being illegal like the tooth fairy in the sense that both are great myths. The fact of the matter is you can do it and there is very little that airlines or governments can do to stop you from it. For instance, I would fly United Airlines domestically in Canada all the time. How are they gonna know you're breaking the rules if the ticket says something like Toronto to Denver to Vancouver? Could it be cabotage or could it be a legitimate ticket? It's impossible for anyone to say! The traveller could argue that they are meeting a colleague in Denver for a couple hours before heading onwards to Vancouver. Nothing illegal there (albeit it is a weird itinerary). And of course the other recourse we have as Canadians is getting in our car driving an hour south to the US and flying out of there for a Canadian destination. That's not cabotage per se but it's always an option at hand. Now I know you can't do something as simple here but the possibility of flying NZ international flights to get to a domestic destination are possible.

-RooFlyer88

You may have picked a specific example to show your point, but I’m not sure it holds across the board. The USA is strict on cabotage, blocking tickets for example from GUM to the continental USA on foreign carriers. Flying via Tokyo or Taipei is going to run foul of cabotage and the airlines can be fined for doing it. More than one case of pax being denied boarding because of this.

United’s - now very old - tag flights between SYD and MEL ran into the same problem. For a while it was possible to buy the UA flight MEL-SYD to connect internationally with another carrier. Until cabotage was raised and it was no longer permitted.

 

[wandering_fred]

Trip to the USA exPER..... looking for Prem Y....
PER-DPS stop DPS-SYD-LAX with AA tranPacific....
less than half the price of QF PER-SYD-LAX
Accepted that PER-DPS will be a challenge but it is only 3.5 hours and MAX JQ fares earn a lot of QF SC.
I suspect those AA fares are long gone......
And with an overnight stop it would not be cabotage...

It takes a lot of planning to find cheap wandering.
Fred

 

[kangarooflyer88]

It takes a lot of planning to find cheap wandering.
Fred

Respectfully disagree - there's presently a $1200 AUD fare between SYD and CDG on Delta which can result in quite lucrative wandering if one wants to earn Delta/SkyTeam status via a status match indeed.

 

[anyonebutqantas]

Cabtoage would be very useful for boosting options transcon to PER, and you might also get some innovative routes like CX flying HKG-CNS-ADL for example.

 

[dajop]

All these discussions of Cabotage in terms of Australia - hub- Australia, are so niche that virtually nobody would consider them, other than SC chasers and WA footy fans if West Coast or Freo make the grand final. Geographically nothing really makes sense. What DRW-DPS-PER?

Of course ACCC are talking about foreign pax to carry passengers on the domestic sectors of international flights that operate to/from more than one Australian city.

 

[Revenge]

I'd love to be able to fly QR and SQ domestically in AU!

 

[HS-TQE]

Cabtoage would be very useful for boosting options transcon to PER, and you might also get some innovative routes like CX flying HKG-CNS-ADL for example.

Considering the nature of today's flying, would cabotage/5th freedom be worth it for most carriers when there is likely more $$$ that can be made elsewhere on more lucrative routes throughout the world

 

[anyonebutqantas]

Considering the nature of today's flying, would cabotage/5th freedom be worth it for most carriers when there is likely more $$$ that can be made elsewhere on more lucrative routes throughout the world

It wouldn't be a pure cabotage motive, it would also get them some international traffic from cities that don't outright justify standalone services.