The Australian Competition and Consumer Commission (ACCC) is seeking submissions from ‘fly-in, fly-out customers’, such as many AMMA members, on whether it should block Virgin Australia Regional Airlines (VARA) and Alliance Aviation Services from entering into a Charter Alliance Agreement.
The ACCC says the proposed alliance would reduce the number of major FIFO service providers in Western Australia from four to three, and most significantly mean Qantas and the new VARA/Alliance amalgamation would have the lion’s share of FIFO services in the state.
ACCC Commissioner Sarah Court believes this authorising the alliance would be anti-competitive and contrary to the public interest.
“The Charter Alliance will largely eliminate competition between VARA and Alliance Airlines in providing FIFO services to corporate customers in Western Australia” Ms Court says.
“The ACCC considers that the likely public benefits will not outweigh the significant public detriment likely to result from VARA and Alliance Airlines coordinating their FIFO services in Western Australia. Therefore, the ACCC’s preliminary view is that this alliance is likely to materially reduce competition for the supply of FIFO services in Western Australia.”
Despite this view, the ACCC believes there could be some public benefits from the charter alliance including ‘operational efficiencies’ and ‘optimisation of aircraft’.
The competition watchdog is call for submissions from any FIFO customers who have a view, by 27 January 2017.
More information on this inquiry is available here.