Qantas Could Be Forced To Sell Jetstar

Competition watchdogs have long viewed the continued growth of Qantas Group across Australia with great interest.

These watchdogs have studied the movements of the mainline Qantas and low-cost Jetstar intently to see the ramifications on consumers and competitors.

That very Qantas Group has a significant portion of available market share across Australia, even highlighted through its regional division of QantasLink.

While some airlines have attempted to be successful as low-cost units, they have ultimately failed, the most recent being Bonza and Rex’s capital jet services.

Not all new endeavours are aimed at competing with Qantas. However, watchdogs look to see how this flag carrier affects prospective competition.

Focus while resting on Qantas can extend to Virgin Australia as well. Damming figures revealed that two players control 92% of the aviation sector in Australia.

The Coalition is now threatening in fresh developments the power that would see Qantas be forced to sell Jetstar, which would be such a move that would deal a massive blow to its business.

The selling of the low-cost division and the threats centre around Qantas’ anti-competitive behaviour if found to be doing such a thing.

Airfares in Australia have long been a problem, however, this isn’t an isolated problem just featured in this country and can be seen across several markets worldwide.

In some markets like Europe, low-cost airlines have thrived with cheap airfares. All the while, full-service carriers have also survived, but some locations can’t make this work.

The argument remains, however, from crucial government members that more competition would cut overall airfares, but finding a way to increase competition has become harder to nail down.

From things such as slot hoarding to unlawful means of retaining market share, these ideas have all been thrown around and accused on Qantas Group, even stretching to Virgin Australia by many across recent times.

A review interestingly highlighted that Qantas leveraged Jetstar’s position to raise airfares and play around with the price. This is evident through the Treasury, seeing the moment the low-cost division was added to the network, airfares would rise; if not, they’d be forced to be lower.

Such comments surrounding Qantas and its low-cost unit Jetstar shouldn’t be a shock, considering the turmoil Qantas has been in since the global pandemic.

The airline’s overall reputation amongst travellers has dropped due to a lack of respect for the brand. New leadership has been drafted to try and mend this; however, that won’t stop external reviews of the business, its impact, and more.

No Action Is Confirmed Yet

While such a headline of Qantas being potentially forced to sell its low-cost division of Jetstar is considerable, this hasn’t been confirmed and may very well go ahead.

Generally, such commentary from the Coalition relates to attempts to make competition more visible across Australia, lower airfares for consumers, and, among others, quality of life tidbits.

Reviews into Qantas Group will continue to see whether intervention would be required in a worst-case scenario, and what it would look like isn’t also confirmed.