Competition Regulator Authorises Airlines to Coordinate to Maintain Regional Routes

Amidst the difficulties that airlines are experiencing with travel restrictions due to the COVID-19 pandemic, the Australian Competition & Consumer Commission (ACCC) announced today that it had granted an interim authorisation to Regional Express (Rex) “to coordinate flight schedules with Virgin Australia and Qantas Airways on ten important regional flight routes”.

The authorisation enables Rex, QantasLink, and Virgin to share revenue from providing services on four concerned routes in New South Wales, one in Victoria, three in South Australia, and two in Queensland. However, he authorisation is conditional on the participating airlines “charging fares no higher than those in place on February 1, 2020”. As a result, the airlines will be prevented from coordinating to raise prices.

Some of the potential arrangements between the airlines are that each carrier can operate a service on a route per day – sharing the revenue between carriers – or that one operator suspends an operation on a route to allow another one to maintain a viable service.

Rod Sims, ACCC Chair, recognised that the request made was urgent and that the interim authorisation “will help provide certainty for regional flight operators to support services on these routes for those who need to use them.” He also assured that the ACCC “stands ready to urgently assist airlines with any coordination arrangements that are necessary and appropriate during this crisis.”

The ACCC is able to review the interim authorisation at any time and is seeking for feedback on Rex’s application for authorisation, according to the media release that can be accessed here.