Nationals senator Bridget McKenzie pushes for ACCC to have divestiture powers for airlines

A key Nationals senator is calling for the consumer watchdog to be given powers which could forcibly break-up airline giants, arguing there needs to be more competition in the aviation industry.

Opposition transport spokeswoman Bridget McKenzie on Monday called on Treasurer Jim Chalmers to review the rules which would be administered by the Australian Competition and Consumer (ACCC), arguing it would benefit consumers.

Her comments also coincides with the Treasury’s two-year review into competition policy, which was announced in August 2023.

“Australians want an airline sector where you have genuine choice, where your plane takes off and lands on-time, and your bags arrive at your destination with you,” Senator McKenzie wrote for in the Australian Financial Review on Monday.

“The treasurer 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, and the proper role of divestiture.”

Nationals MP Barnaby Joyce seized on Qantas’ “massive market power” which he said was dudding consumers with high airfares.

He also pointed to the collapse of Rex which entered into voluntary administration in August, as well as budget airline Bonza, which was only in operation for 15 months.

“You’ve got to remember Qantas destroyed Bonza, and Qantas has destroyed basically Rex by their control of the marketplace, and we can’t just sit back and say, ‘well, that’s all right. We’ll just have a monopoly in Australia,’” he said on Sunrise.

“No other country would put up with this. United States would not put up with this, so why would we?”

His sparring partner Environment Minister Tanya Plibersek pointed to other ways to increase competition such as increasing “takeoff and landing slots”.

“They’ve only got one idea. Break up the supermarkets, break up the airlines,” she said.

Infrastructure Minister Catherine King, who oversees aviation, also dashed the argument as “another thought bubble”.

However Nationals Leader David Littleproud watered down the comments and said it was not Coalition policy. Instead he said Senator McKenzie’s call for the powers were a “calm methodical way of working through competition policy for airlines, adding that it was a “sensible look at competition to ensure we have cheaper airfares”.

Previously the Coalition has also made an election pledge to give the ACCC divestiture powers to split up supermarket duopolies, which they argue is punishing farmers and producers, and stinging consumers at the checkout.

Earlier this month, the government released its aviation white paper report which 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.

The watchdog will also have powers to administer and enforce penalties on both domestic and international airlines.