Jostling and positioning by Virgin bidders is getting really interesting. Cyrus reportedly blowing the full-service trumpet, but domestic fleet pared back to B737s
The Richard Branson-linked investment fund has said it wants to maintain Virgin Australia as a full-service international airline if it wins the race for the collapsed carrier.
www.smh.com.au
Interesting position the ACCC is in.
Their job is primarily to foster active competition in an attempt to drive prices down for the consumer which by its very nature means one company will cut fares to increase market share, thereby forcing another to cut to maintain market share.
Prior Covid-19 when we were hitting peaks in volume of travel, advertised $1 fares (for a return sector) during certain seasons were not uncommon. Price disparities just in Y between say Mel-CNS ranged from >$300 to $39 and this was hailed as a good thing for everyone and actively encouraged.
Now Qantas has said they
might need to offer some $19 fares for say Mel-Syd to drive volumes much faster than otherwise due to depressed demand and make flights viable but would only do it if it was revenue positive. The ACCC now is seriously concerned?
The ACCC now seem to be focused on prices being held up higher than it is profitable for the airline to operate them and focusing on reducing competition to help a competitor.
The devil's advocate in me poses, if VA in over a decade never made a profit trying to emulate a full service carrier, why should Aussies be forced to pay more in airfares across the board so the new backers can try to do the same again?
Indeed, in the current cut throat arena of aviation does AU have a market large enough to support two full service carriers, particularly in the depressed market arena for 2020-2022.