June 19, 2020 / 1:05 AM / 21 days ago

Australia's competition regulator to monitor domestic airfares, profits

FILE PHOTO: Qantas planes are seen at Kingsford Smith International Airport, following the coronavirus outbreak, in Sydney, Australia, March 18, 2020. REUTERS/Loren Elliott

SYDNEY (Reuters) - Australia’s competition regulator will monitor domestic airfares and profits for three years, increasing scrutiny as the industry begins a slow recovery from the coronavirus pandemic and Virgin Australia Holdings Ltd (VAH.AX) seeks a buyer.

The federal government said on Friday the Australian Competition and Consumer Commission (ACCC) will monitor prices, costs and profits, as well as provide another avenue for complaints about anti-competitive conduct.

“A key matter covered will be the level of capacity the airlines are putting on each route and whether this is occurring in a way that may damage competition,” Treasurer Josh Frydenberg said in a statement.

Qantas Airways Ltd (QAN.AX), which holds almost two thirds of the domestic aviation market, said earlier on Friday it would offer 10,000 one-way seats on low-cost arm Jetstar for A$19 ($13) to help support a tourism recovery as Australia unwinds coronavirus restrictions and state borders reopen.

“We have a lot of aircraft on the ground with fixed costs attached to them, so if we can put some of them back in the air by offering special fares, it’s a positive for us, for our people, for tourism and for consumers,” Qantas Chief Executive Alan Joyce said in a statement.

Rival Virgin Australia entered voluntary administration in April, owing nearly A$7 billion to creditors. The airline is expected to emerge a smaller airline under a new owner, in a move that analysts have said could benefit Qantas.

Binding bids for Virgin Australia from finalists Bain Capital and Cyrus Capital Partners are due on Monday and a final deal would need to be approved at a creditor’s meeting in August.

The ACCC will report at least quarterly on its findings, the government said.

Reporting by Jamie Freed; editing by Jane Wardell

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