Australian Competition and Consumer Commission Chairman, Professor Allan Fels, has announced that the ACCC will closely examine the proposed arrangements between Qantas and Impulse announced today.
“The parties informed the ACCC of the proposal on Monday night and we will be considering the implications of the proposed restructuring,” Professor Fels said, “especially in light of possible alternative scenarios.” Professor Fels stated that “these alternatives include the complete collapse and withdrawal of Impulse aircraft and services from the Australian market.”
Another issue is whether there are other buyers willing to make the investment necessary to keep Impulse operating as at present.
Prof Fels noted that the ACCC’s concerns in this matter relate to the impact of the proposal on competition. In assessing this impact the ACCC will look for the alternative that provides the least anti-competitive outcome.
The ACCC understands that Impulse is to cease offering services in its own name as an independent airline. It will, instead, become an operator of aircraft under the Qantas banner using its existing flight crews, cabin staff, engineering and maintenance personnel. In its consideration of the effects of the proposal the ACCC will consider the impact on capacity and competition in various markets, including trunk routes, rural and regional routes, and slots, especially at Sydney airport. This will include an assessment of the effects of any changes to current route services.
“Furthermore, the ACCC is aware that a number of consumer protection issues may arise with a collapse of Impulse’s services.” Prof Fels noted that “this proposal would protect those consumers currently holding Impulse tickets.”
“The ACCC will immediately consider this proposal in light of the urgency of Impulse’s commercial situation and, as a first step, will consult with the industry seeking information from market participants.”