Rod Sims weighs in on Virgin Australia stoush with Qantas, calling for ‘cooperative spirit’
Competition regulator Rod Sims says Australia needs two big airlines and he will be contacting Qantas to ask it to end a public campaign it has mounted against rival Virgin Australia during the coronavirus crisis.
Sims, the chairman of the Australian Competition and Consumer Commission, told Guardian Australia he would be investigating a complaint Virgin chief executive Paul Scurrah lodged against Qantas over the weekend.
“It’s an important complaint and I’ve said to Paul Scurrah that we will look into it, and we will.” Sims said.
Sims slapped down Qantas CEO Alan Joyce for making comments over the past week that airlines were in a battle of the “survival of the fittest” and said now was instead the time for cooperation between business rivals to make sure companies remain in place so that there can be an economic upswing when the pandemic ends.
As Guardian Australia reported on Monday, Scurrah wrote to Sims on Sunday asking the competition tsar “to investigate public commentary and an industry-wide campaign by Qantas that is designed to ensure a lessening of competition in the aviation sector”.
Over the past week, Joyce has repeatedly said the government should not nationalise Virgin if a further bailout of the airline sector is needed on top of the $715m tax relief package announced by the Morrison government last week.
Airlines are under extreme financial pressure after being forced to end international operations and severely limit domestic flights because of government travel bans.
In addition to his “survival of the fittest” remark, Joyce has said the Australian government should “not look after the badly managed companies which have been badly managed for 10 years” and that “governments are definitely not there to support a company that’s owned by Singaporeans, Chinese, Abu Dhabi and a British billionaire” – a reference to Virgin’s key shareholders.
Sims said: “Separate from the investigation – it’s obviously linked a bit – comments about the survival of the fittest aren’t helpful at a time when we do have a crisis and we need a more cooperative spirit to get through this.
“You would have seen today we’ve authorised the supermarkets to cooperate, last week we authorised the banks to cooperate, we’ve got a real crisis here and we need to be working together, not making statements like ‘survival of the fittest’.”
The ACCC aims to preserve industrial capacity so that, when the crisis is over, big companies can quickly get back into business and small ones can reopen.
“We know this crisis is going to finish – we don’t know how long it’s going to go, but we know it’s going to finish, and when it does we’ve got to make sure the economy recovers quickly.
“And obviously we’re going to need two airlines, two big airlines … we need the companies that were there before that were the key underpinning of our economy to still be there.”
Asked if he would be making contact with Joyce to tell him to end the campaign, Sims said: “I’ll certainly be making contact with Qantas at a very senior level.”
A Qantas spokesman denied the airline was the source of chatter about Virgin’s imminent demise that has been abroad in the business community.
“In the past fortnight, Virgin has made legal threats to us directly and has now gone to the ACCC to claim we’re the source of various rumours circulating widely in the market,” he said.
“What is true is that we’ve been very candid in our assessment of what’s happening to airlines around the world and the fact we’re determined to be different. Saying you want to survive is not anti-competitive.”
Sims said the ACCC was working closely with businesses in many sectors to help them quickly put in place arrangements that in normal times would be unlawful because they are anti-competitive.
Last week the ACCC allowed the banks to cooperate on a package of measures, including cheap loans, designed to allow money to flow into the small business sector.
On Tuesday morning the commission authorised a deal under which Coles, Woolworths and other supermarket chains will be allowed to coordinate dealings with manufacturers, suppliers and transport companies.
Sims said four or five more authorisations to cooperate were in the works.
“We’ve got panic-buying in our supermarkets, we’ve got to make sure the supply is there, so we’ve allowed the supermarkets to cooperate on a temporary basis, just while the crisis is on,” he said.
“We’re doing all we can to encourage companies to work together to get through this, and therefore putting in place quick authorisations, helping them draft them, just doing what we can to keep the authority flowing.”