Australian competition authority to ""closely monitor"" domestic airfares after Rex exit

The Australian Competition & Consumer Commission (ACCC) said it is keeping a close watch on Qantas and Virgin's airfares following Rex's voluntary administration at the end of last month. It also follows the collapse of Australian budget airline Bonza - a part of American investment company 777 Partners - when it liquidated in July. ""The collapse of Bonza and withdrawal of Rex from routes between metropolitan cities means that, as of July 2024, no domestic route has more than two competing airline groups,"" the ACCC read in a statement. The competition authority said it will ""closely monitor domestic airfares"" on domestic intra-city routes following Rex's withdrawal. In June, Rex carried around 5% of domestic passengers in Australia. The move comes after the publication of its quarterly domestic airline competition report on August 22, 2024. While it noted that both of the collapsed airlines provided ""relatively limited capacity"" on these routes, their exit from them means that customers could potentially ""face higher airfares"" as well as a reduction in consumer choice for domestic travel. Rex's regional operations are still ongoing as it awaits a buyer. The ACCC warned that if Rex is unable to restart its services between Australia's metropolitan cities, airfares could see a rise. Though it did say that airfares had improved for consumers in the first half of the year. ""Consumers generally enjoy lower airfares where there is more competition on a route,"" said ACCC commissioner Anna Brakey. ""With the suspension of Rex’s services between metropolitan cities, we are closely monitoring airfares and remain vigilant to any increases in prices on routes that Rex is no longer flying on."" The Australian market is largely dominated by Qantas and Virgin. Australian budget airline Jetstar also operates intra-city routes. Brakey commented: ""The concentrated nature of Australia’s domestic aviation industry reinforces the importance of the ongoing transparency and scrutiny we bring through our monitoring role."" Between November 2023 and April 2024, the Melbourne-Gold Coast route had four competing airlines - a first for routes in Australia. Brakey said it is ""important"" for the aviation sector to remain competitive. In November last year, the Australian treasurer had directed the ACCC to recommence domestic air passenger transport monitoring for a period of three years with a report every quarter. Rex's appointed administrator is Ernst and Young, while Bonza's is Hall Chadwick.