Qantas Rejects Senator McKenzie's Call To Sell Off Jetstar Amid Anti-Competition Concerns

Qantas has turned down calls from National Senator Bridget McKenzie to dispose of its subsidiary budget carrier Jetstar, amid concerns over anti-competitive behavior in the aviation industry.

Nationals leader David Littleproud distanced himself from a proposal made by his colleague, McKenzie, that the federal government can exert its power to separate Qantas and Jetstar if they engage in anti-competitive behavior, ABC.net.au reported.

"The Australian travelling public doesn't expect much," Senator McKenzie said. "It expects its planes to take-off and land safely and on time, their bags to arrive in the same place they do, and to be able to afford a ticket."

McKenzie proposed on Monday a measure aimed at fostering a fair environment in the aviation industry, where Qantas' dominance has raised challenges for new entrants. McKenzie suggested breaking up the duopoly to create a more dynamic market, allowing aviation players to thrive.

However, Qantas did not align itself with the idea, stating that the Australian Competition and Consumer Commission (ACCC) has not identified any issues with its conduct, and, therefore, such drastic measures were unwarranted.

Speaking to 7 News, a Qantas spokesperson said that the ACCC's four-year monitoring of the aviation industry found no anticompetitive behavior, with domestic fares trending down and Qantas and Jetstar offering lower international fares, including 12 million Jetstar fares under $100 last financial year.

However, McKenzie said, "Qantas raises prices when Jetstar, an affiliated airline, enters the market, suggesting the presence of Jetstar allows Qantas to exercise a greater degree of price discrimination," adding these were not her words, but the conclusion of the Treasury, 7News reported.

"Something has to be done about the ownership structure of Qantas. What I want to see, what the Coalition wants to see, is lower prices for the Australian travelling public. ... We need to do something about the duopoly where 92 per cent of our aviation sector is controlled by two players. If that was the supermarket sector we would hammer them," McKenzie said, according to ABC.

"When Qantas and Jetstar are the only two carriers into a given route, Qantas puts its prices up," she added.

However, Littleproud expressed caution about the same, saying it was premature to consider such drastic measures for airlines, unlike the situation with supermarkets where similar powers have been proposed.

"This is a sensible look at competition to ensure we have cheaper airfares ... this is a calm, methodical way of working through competition policy for airlines, as we did in identifying the evidence that was stark in terms of supermarkets," Littleproud said. "We haven't taken that step yet."