The biggest business story in Australia last week was Qantas. After multiple scandals – the government blocking Qatar Airway’s additional flights request, the allegations they sold tickets for flights they’d already cancelled, and the ongoing saga of COVID-era refunds and flight credits – CEO Alan Joyce finally fell on his sword. So ended the 15 year reign of one of Australia’s most polarising corporate leaders – loved by shareholders, loathed by many other stakeholders.
The Qantas story is a story that needs to be told in the context of incredible industry consolidation in Australia. Australia is the land of the oligopoly. From our supermarkets to telecommunications, energy to banking, Australia’s markets are dominated by small clusters of powerful players. But none more so than our airlines.
According to the ACCC, Qantas had a 61.1% market share in the domestic aviation market in 2022 (split across 38% for Qantas and 23.1% for budget subsidiary Jetstar). Such market share gives Qantas incredible power, both in the market when negotiating with key stakeholders and in Canberra when lobbying politicians.
This report from the e61 Institute takes a look at the state of competition in Australia and considers the effects of this lack of competition. From greater barriers to entry to higher rates of infringement on consumer protections, it is not a great story.
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