Collapse of 2 Aussie airlines sparks debate about unfair competition

Questions arise over whether govt policy favours main players Qantas and Virgin

- Jonathan Pearlman

For The Straits Times SYDNEY Australian travellers have grown accustomed to new domestic airlines swooping in with much fanfare before being grounded before long by financial troubles. And the recent collapse of two carriers within months of each other has sparked scrutiny of possible government anti-competitive actions.

On April 30, Bonza - a low-cost carrier targeting regional holiday destinations - failed after operating for just 15 months.

Three months later, Regional Express, or Rex which had been flying for 22 years, mainly servicing regional areas announced that it was going into voluntary administration.

They join a long list of airlines that have come and gone in recent years, including Compass, Impulse, Tigerair Australia, Air Australia and OzJet.

This has fuelled questions about why the nation a vast territory heavily dependent on air connectivity and with one of the world's busiest domestic routes cannot sustain a third major carrier, and whether government policy unfairly favours the two main players, Qantas and Virgin Australia.

Much of the debate has centred on the collapse of Rex, which was an established airline that serviced regional Australia towns and smaller cities outside major metropolitan centres - but struggled after expanding in 2021 to service major cities.

This move seemed to make sense, given that about 63 per cent of Australia's 27 million residents live in just five cities: Sydney, Melbourne, Brisbane, Adelaide and Perth.

The Sydney-Melbourne route, for instance, is the world's fifth-busiest domestic route, with 9.3 million passengers in 2023.

Other busy Australian routes include Brisbane-Sydney (4.3 million passengers in 2023), Brisbane-Melbourne (3.3 million), and the route between Sydney and the holiday destination of Gold Coast (2.4 million).