The Australian Competition and Consumer Commission has accepted an undertaking from Ansett, clearing the way for its bid for Hazelton Airlines to proceed, ACCC Chairman, Professor Allan Fels, said today.
"The undertaking addresses ACCC concerns that the acquisition of Hazelton by Ansett would limit competition in regional air transport in NSW. The ACCC was particularly concerned to ensure that any new entrant into regional NSW would be able to access scarce takeoff and landing slots at Sydney Airport.
"The undertaking involves assurances on the use of slots at Sydney, limitations on swapping slots within the Ansett group, the requirement to make available to new regional operators up to 80 slots per week (spread across the day) and restrictions on air fare increases for certain regional routes. It also requires Ansett to hand back a specified number of slots to the slot coordinator for allocation via the general pool should they not be allocated to new regional operators within a specified time.
"The undertaking also requires Ansett to make available to new entrants on NSW regional routes up to 30 per cent of Hazelton's slots in the morning peak, between 7 a.m. and 9 a.m. Currently there are no slots available in this time period. The ability of new players to access slots during this period represents a substantial barrier to entering regional markets. The undertaking by Ansett to make a significant proportion of Hazelton's slots in this period available to new entrants on NSW regional routes was fundamental to satisfying the ACCC's concerns.
"The ACCC initially announced in December 2000 it would oppose the acquisition of Hazelton by either Ansett or Qantas. Following that announcement both airlines offered revised proposals and draft undertakings to address the ACCC's concerns. Neither proposal satisfied the ACCC and involved changes to the Slot Management Scheme in place in place at Sydney Airport, which may not have been forthcoming. The ACCC announced in January 2001 that the revised proposals were inadequate and that it would continue to oppose the acquisition by either Ansett or Qantas.
"Also in January, the Minister for Transport and Regional Services announced some changes to the Slot Management Scheme at Sydney Airport. He stated that ring-fenced regional slots could be moved by no more than 30 minutes from their original time (as against 30 minutes each scheduling period) and foreshadowed changes to the Slot Management Scheme limiting the number of ring-fenced slots for regional services.
"Shortly after the Minister announced the changes to the Slot Management Scheme and the ACCC announced its rejection of the revised proposals by Ansett and Qantas, Qantas announced that it would let its bid lapse. However, Ansett decided to continue to explore ways of addressing the ACCC's concerns while working within the rules of the Slot Management Scheme".
An edited undertaking will be available on the ACCC website, www.accc.gov.au. Certain sections will remain confidential as they relate to the commercial operations of Ansett.