Rod Sims says criticism of Rex’s decision to compete with major operators on capital city routes ignores failures of public policy
Former chair of the ACCC Rod Sims says suggestions that only two airlines could service routes between capital cities was ‘nonsense’, after Rex entered administration.Former chair of the ACCC Rod Sims says suggestions that only two airlines could service routes between capital cities was ‘nonsense’, after Rex entered administration.
The prime minister, Anthony Albanese, on Tuesday criticised Rex’s decision to expand and fly capital city routes in 2021, in light of funding it receives from various governments – including to subsidise regional routes.“One of the things that I expressed concern about was that no conditions ,” Albanese said. Rex had “moved away from their traditional role” of being a regional airline into flying to capital cities, he said.
“The government sets this system up for failure, it sets this system up for a duopoly and therefore sets the system up for higher airline prices than Australians should be paying.” An Australian Airports Association report said air fares on flights between Melbourne and Perth dropped by 40% when Rex began flying the route, adding 46,000 seats a year in extra capacity.
Helen Bird, a Swinburne University law and corporate governance specialist, said a government bailout of Rex would need strict conditions and could even require it to take a seat on the board.
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