The deputy chairman of Rex Airlines has accused Qantas of acting like a “bully” towards smaller aviation players and questioned the pay packet of its outgoing chief executive, Alan Joyce.
John Sharp, a former federal transport minister in the Howard government, on Monday also called on the Albanese government to reverse its decision to block Qatar Airways from doubling its capacity into Australia, amid questions about the influence of Qantas’s lobbying.
“I think it’s appropriate if they were to reverse the decision on Qatar flights, noting they [Qatar] repatriated more Australians stranded overseas during the Covid pandemic than Qantas did,” Sharp told ABC radio.
“They’ve proven themselves to be a good citizen.”
Sharp said international airfares out of Australia remained about 50% above pre-pandemic levels.
“We’ve got a shortage of seats [for international services] at the present time, and Qatar’s additional flights would help alleviate that problem, and we’d also see as a result of it airfares coming down because more competition, more seats, results in lower prices,” he said.
Queensland’s deputy premier, Steven Miles, on Monday said he would welcome additional Qatar flights to the state.
Sharp also accused Qantas of acting like a “bully” when exercising its market dominance – it operates about 65% of domestic aviation together with budget carrier Jetstar – over smaller airlines such as Rex.
“Rex’s relationship with a company like Qantas is a bit like an ant dancing with an elephant. You’ve only got to make one misstep and you’re squashed.”
Sharp alleged that after Rex decided in 2021 to fly jets between capital city routes to compete with Qantas and Virgin, the former began “dumping capacity in an anti-competitive way” on smaller regional routes where Rex was previously the only operator.
“Immediately when they moved into Broken Hill, we lost money on it and continue to do so. And of course, Qantas lost money too, but it’s a ripple in the pond for them whereas it’s a big wave for us,” Sharp said, adding the same thing happened on services to Mount Gambier, Kangaroo Island and Merimbula.
“They’ve moved into a number of routes in order to try and punish us for going into the domestic airline business to try and undermine our finances so that we’re weak and therefore can’t compete.”
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The allegation follows an almost gleeful response within the aviation industry to news that Qantas was facing potential fines worth hundreds of millions of dollars after the Australian Competition and Consumer Commission alleged Qantas had engaged in false, misleading or deceptive conduct in advertising and selling tickets for more than 8,000 flights in 2022 that had already been cancelled internally.
Qantas also has a reputation for being a tough negotiator over airport fees for landing rights, and the airline’s high cancellation rates – which some allege are strategic – have become a growing source of anger.
“They play real hardball, they truly use their market power in a way that airports can’t, to get the result they want and flatten their costs,” one source, who requested anonymity, claimed.
Sharp said Rex had complained to the ACCC about alleging anti-competitive behaviour but the watchdog had not pursued the matter.
Qantas and the ACCC were contacted for comment.
Sharp said he was optimistic the legal action announced by the ACCC late last week against Qantas would “reveal a lot of information” through court hearings. “I think off the back of that there’s going to be a lot of practices that are seen as anti-competitive,” Sharp said.
Sharp also repeated calls for reforms to Sydney airport’s slot system that he and other critics argue allow large airlines such as Qantas and Virgin to shut out smaller competitors and cause a high number of cancellations.
He claimed the Qantas board now had reason to block or rework the millions of dollars in shares and bonuses Joyce had or would receive – due to reputational damage to the airline. Joyce’s final pay packet upon exiting Qantas in November could total $24m.
“The board has to make its own mind up on this thing, but certainly, it would be difficult to in my view justify paying huge bonuses when at the same time the reputation of the company has been so badly damaged,” Sharp said.
He said that “one of the things that CEOs and senior executives are supposed to do is to not just maintain the reputation of the business in the eyes of the customers but to improve it and clearly that’s not the case”.
“Qantas is for the second year in a row the most complained about company [to the ACCC] in Australia and I would have thought that would be a very important metric for a board to judge whether you issue bonuses.”