David Littleproud walks back on threat to break up Qantas-Jetstar in a bid to boost competition

Nationals leader David Littleproud has poured cold water on his colleague’s suggestion that Qantas should be forced to divest its low-cost Jetstar brand if the Flying Kangaroo behaves anti-competitively.

Shadow Transport Minister Bridget McKenzie earlier on Monday called for Treasurer Jim Chalmers’ review into competition policy to include divestiture powers to cover Australia’s aviation sector.

In an opinion piece, Senator McKenzie said the competition review must do what the aviation white paper did not and address the role of divestiture in the sector.

She argued Mr Chalmers will have “failed another reform opportunity unless he deals with divestiture as a measure to ensure consumers’ interests are protected, and not at the mercy of the entrenched duopoly”.

The Coalition has already adopted similar divestiture powers in the supermarkets sector, as Coles and Woolworths’ market share distorts competition.

Hours later, Mr Littleproud walked back Senator McKenzie’s suggestions and said it was “not Coalition policy yet because we haven’t got the evidence”.

“This is a sensible look at competition to ensure that we have cheaper airfares . . . this is a calm, methodical way of working through competition policy for airlines as we did with identifying the evidence that was stark in terms of supermarkets,” he told Sky News.

“But we haven’t taken that step yet.”

A Qantas spokesman said the competition regulator had been actively monitoring the aviation industry for the past four years and made no findings of anti-competitive behaviour.

He said the Australian Competition and Consumer Commission’s latest airline monitoring report found real and nominal domestic fares were continuing to trend down.

The spokesman also added Qantas and Jetstar international fares were both lower than last financial year, with Jetstar offering 12 million fares for less than $100 in the same period.

The aviation white paper report released last month announced the creation of an Aviation Industry Ombuds Scheme, which would have powers to compel airlines and airports to resolve customer complaints and report on their conduct.

Transport Minister Catherine King on Monday described the proposal as “another thought bubble from Senator McKenzie”.