ACCC backs Virgin over Qantas for extra Bali flights

The competition watchdog has thrown its support behind Virgin Australia over Qantas Airways as the two airline businesses compete for permission to run extra flights to Australia’s most popular tourist destination, Bali.

Australia’s International Air Services Commission received applications from Qantas’ budget subsidiary Jetstar and Virgin to be granted the right to add almost 2500 weekly seats to their services between Indonesia and Australia. The rights have become available under the bilateral air rights agreement between the countries.

The competition watchdog has backed Virgin over Qantas in the fight for more flights to Bali.
The competition watchdog has backed Virgin over Qantas in the fight for more flights to Bali. Credit: Alamy

Qantas would like 2320 additional seats for extra Jetstar services on a new route from Cairns to Denpasar via Melbourne, and another from Adelaide to Denpasar via Perth. Virgin has applied for all the 2464 available weekly seats to operate flights from the Gold Coast and Adelaide to Denpasar via Perth.

The Australian Competition and Consumer Commission submitted its support of Virgin’s application to the air services commission on Wednesday because it would foster competition. The ACCC argued Jetstar was already the largest airline on routes between the two countries in 2023 and when combined with Qantas, operated 55 per cent of available seats in 2023 to Virgin’s 15 per cent.

“The ACCC considers that the proposal from Virgin Australia would appear to be more conducive to fostering a competitive environment, and a broader distribution of capacity, than the proposal from Qantas,” the watchdog’s submission says.

Qantas submitted that it deserves the flights because Jetstar is the biggest carrier of Australians to Bali and offers the most competitive fares.

‘The ACCC anticipates that this new competition would likely result in better outcomes for passengers through lower prices and improved services.’

Australian Competition and Consumer Commission

Eight airlines currently fly between Australia and Indonesia. Jetstar is the only Australian airline that flies between Perth and Denpasar, with three daily services. If Virgin is granted the extra flights, it will be able to fly twice daily on this route. Jetstar is also the only airline that flies between Denpasar and Cairns, and would like to make this route daily if granted the rights. It also holds 70 per cent of the seat capacity between Denpasar and Melbourne.

“This proposal would introduce Australian competition between Perth and Denpasar, as well as reduce Jetstar’s dominance on services between Adelaide and Denpasar. It would also introduce competition for domestic connections between Gold Coast and Perth … The ACCC anticipates that this new competition would likely result in better outcomes for passengers through lower prices and improved services,” the ACCC said.

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The Transport Workers Union, Queensland Airport and the Flight Attendants Association of Australia have also lodged support for Virgin’s application.

The TWU and FAA – which represent workers at both airlines – pointed out Virgin’s commitment to employing locally if awarded the extra seats. Jetstar employs cabin crew from a number of international destinations including Bali.

“Virgin’s commitment stands in contrast with Jetstar and Qantas’ heavy reliance on internationally based crews,” The Transport Workers Union’s submission says.

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Source: Thanks smh.com