Although it was possible in Australia to travel domestically on spare seats of selected multi stop inbound or out bound international flights. The cheaper seats were offset by the added inconvenience of needing to go through the international security check in. The most expensive air travel in Australia has been regional services to destinations with no international carriers.
With Covid still dominating travel decisions, nothing in the airline business is normal at present. The ACCC issued this report at the end of last year.
The ACCC refers to part of its role as ‘protecting competition’ .
It also advises that pre Covid Qantas had 60% of the Australian domestic market, Virgin more than 30%, and REX the majority of the rest.
Pre-Covid I’d never seen Australia’s air terminals more packed or the flights fuller. Post Covid whether the ACCC can have any influence over Qantas remains to be seen. The ACCC pointed out that Qantas took a 19.9% interest in competitor Alliance in Feb 2019, without so much as a nod to the ACCC.
The ACCC agreed to coordinated scheduling, higher air fares and profit sharing on 10 regional routes to assure some level of service during Covid.
Qantas surge pricing is simply a warning for how a single airline future could work to the disadvantage of consumers. It’s also an expense the typical bush politician travelling between Canberra and Tamworth via Sydney or to Electorate office no 2 of 3 in Mt Isa will not need to be concerned about.
It has one of the most heavily flown routes in the world, Melbourne-Sydney. Also part of the ‘Qantas golden triangle of routes’ including Brisbane.
The ACCC has continued to monitor the industry.
In the June 2021 report the ACCC credited competition on the Melbourne Sydney route had delivered the lowest prices in ten years.
It’s important to consider surge pricing is most effective for an airline when the demand on a route is close to or reaches capacity. Something a monopoly on a route can deliver, and competition limits.
Australia is ranked 17th in the world in relation to annual flight passenger numbers. Even this statistic is misleading as it doesn’t consider number of routes, fixed costs/route lengths, frequency of flights nor percentage of seats occupied on each flight. These are also factors which affect the viability of airlines.
The number of airlines Australia can support is evidenced by history. Australia can only just support 2 major airlines, as any more entering the market has resulted in failure of one to bring numbers back to 2. Even with two, in recent times only one has been profitable at times (Qantas). Others have run mostly at a loss (Virgin, Tiger, Compaas etc), placing pressure on their long term existence.
I suppose it depends on how security is arranged. It shouldn’t be too difficult to quarantine domestic pax from int’l pax at an airport. In fact this happened to me a few years ago when flying from Taiwan to NYC via Anchorage, where such segregation took place.
Agreed. Open skies is for int’l travel. But my point is that the Fed Gov’t could unilaterally decide to open our domestic skies to foreign competition. That would benefit the Australian travelling public, but not so QF stockholders.
If other countries do not reciprocate by opening their domestic skies, then that is a handbrake on competition in their markets for which their consumers will/may suffer.
It is possible, but generally impracticable. There can’t be contact between domestic and international passengers until such time that the international passengers have passed through quarantine or immigration…and then treated as domestic onward passengers (for the last leg of a international flight if used for domestic purposes) or the first leg (if the onward leg is an international flight).Otherwise, not doing so provides a enormous hole in the biosecurity/immigration systems in place at international airports.
This means that international passengers would need to be reprocessed after contact with domestic passengers. This wastes time/costs for passengers/airlines for not real gain.
That actually happened in the 90s. The Keating Gov agreed to allow Air New Zealand to fly domestic routes in Australia. Predictably, the now domestic and international bully Qantas having swallowed Australian Airlines, didn’t like that idea, so it didn’t happen.
This was pre-9/11. Since the security environment has changed enormously.
More recently, Emirates has done pickup of passengers for a leg…Dubai to Brisbane to Auckland…where additional passengers from BNE to AKL (and reverse leg) for the international leg could join the flight. The additional passengers added to an international flight are no issue as they are joining passengers with the same status (that being international).
I’m not a fan of following history. Evidence from history is situational. The Australia of the next decade will not be the same as the past decades. We can only hope it is not.
The ACCC is already on the record that competition in the industry is to the benefit of the consumer. Qantas is now in a dominant position. Is it time to break it up, nationalise it, introduce strict regulation to ensure all Australians receive equal access and fares, or something more?
If we only have on dominant domestic airline, it looks more like the local public bus or train service. Not something to let run as a monopoly unfettered.
Australia is a big country, and air travel is crucial.
Whilst competition is encouraged to keep routes open and prices honest, at the end of the day there is only one airline that has managed to keep flying the domestic market on a full basis, not just special routes.
And that is Qantas. Sure, they have and have had a lot of advantages that other domestic airlines have not had with Gov support, but then again Qantas have not done blatantly stupid things that killed off other domestic competitors.
Qantas is the airline of last resort, and no Gov will allow it to fail.
True, if they were ‘blatant’ and stupid the moves would be well remembered.
The average consumer is well shielded from the intimate and commercial details of Australia’s air travel industry. The ACCC reports are as close as we seem to get to the action. Everything is dumbed down to one and two line statements. The travelling public is expected to trust the assessments, whether spun by the CEO of the Airline, Industry Analysts, or Government Ministers. The scraps are repackaged by common news services as informed reporting. Rarely insightful and often little more than click bait.
It’s easy to agree,
In which instance should consumers expect more transparency and greater regulation of the monopoly?
Why would any other Airline choose to compete knowing it’s never going to be a level playing field?
While seemingly somewhat risky and even foolhardy, capitalists will take a dollar anywhere they can find one, hoping for many rather than one. If it goes pear shaped their investors wear the loss, not those who brought them to the table.
As with charismatic pollies, charismatic capitalists can organise all sorts of questionable arrangements with willing takers, believing their eyes are wide open while closed.
One factor that protects Qantas is its ownership conditions. It has to be no more than 49% foreign owned and of this other airlines can have a limited ownership.
It will always be in reality an Australian owned and operated airline.
Virgin collapsed because it was almost totally owned by foreign airlines and entities who had to think about their own conditions when the Pandemic hit. No money available.
Ansett collapsed because it was totally owned by a foreign airline who thought it could compete in the Australian domestic market from their offices in Auckland.
“Ownership” may have been a proxy for “poor management”.
Sure ownership is important, but I think the focus should be on competition. Even if that means on some routes only. After all, even if say QR or SQ are allowed to ply the CBR-SYD route, but no other routes, that alone will force QF to trim its contracted prices with the federal bureaucracy and politicians. Better yet, EK or EH flying from the UAE to PER should be allowed to carry PER-SYD travellers. That will quickly depress air fares on that route.
Also, QF is understood to be a better PR player than its rivals, that has helped it enormously.
In the early 90s, both Qantas and AA were Government owned.
Whilst AA was reasonably profitable with AN its only competitor having seen off Compass mark1 and 2, Qantas was a continual drag on finances having to compete with international airlines.
The Gov decided to sell off both, and directed that they merge under the Qantas name and rationalise back office functions. Qantas had a billion dollars of debt waived to encourage this merger process.
In 1992 the Qantas sale act was passed to sell off the now merged airlines.
Maybe I was unclear. My point was to generate competition the two should have been sold separately. QF could have been sold in part or in full to an overseas carrier and AA could have been sold in full to a different foreign carrier and kept as a domestic carrier.
The merging of the two was not in the public interest, if for no other reason that one player was removed from the marketplace and no ceiling on fares was ever mandated. I cannot comment about your claim in the waiving of debt, as I know nothing of that.
Similar anti competitive shenanigans were seen a few years ago when Wayne Swan decided to sell St George to Westpac, rather than to a foreign bank which would have generated competition. After all, the biggest hurdle any new entrant into retail banking in Aust has been to establish a wide branch network and that was already in place with St George.
Of course the real culprits are the sleepwalkers in the mainstream media, who one would think should advocate for the public good.
QF could not be sold to a foreign airline, or any foreign entity, because it was the designated Australian international airline of record in many bilateral air transport treaties.
QF had to be majority Australian owned, managed, and based.
Still has to be to this day.
I didn’t think standby cheap seats existed anymore? So you just wait at the terminal and check the prices? Ask terminal check-in staff if there are standby seats?
I have no idea in this period of restricted flying, but that’s how many used the system in past times.
You would ring up the airline and ask about the chances of getting on a flight ‘wait listed’.
If good, turn up and go to the wait list desk and register. Travel light, because your baggage may not be going with you unless it is carry on.
Then if you get a seat, pay the heavily discounted fare.
If you were lucky, the seat available may be in business.
