The peak body representing airports says the government needs to act on aviation industry concentration.
AAA chief executive James Goodwin said the government inquiry’s terms were too limited and should be expanded to look at airline market concentration and competition issues within the aviation industry, singling out Qantas’ dominance.But a Qantas spokesman said that “Australia is one of the most open and competitive aviation markets in the world and for the first time ever we now have four jet airlines competing in the domestic market”.
Mr Goodwin said that the government’s $5 billion support package had “disproportionately benefited airlines” which received $3.22 billion or 63.5 per cent of the total, compared with the $220 million in assistance offered to airports. And he said changes triggered by the pandemic, particularly with Virgin Australia going into receivership, has “further concentrated the market, with Qantas remaining dominant”.concentrated markets in Australia. Qantas Group and Virgin Australia account for 95 per cent of market share in the domestic aviation market,” he said.Australia’s biggest banks, Commonwealth Bank and Westpac, together control 47.
The association also expressed concerns that Qantas’ profits are up 70 per cent compared with 2010 to 2015 levels.before interest and taxes margin is up from 12 per cent in FY2016-17 and forecast to be 18 per cent in FY2022-23 – effectively a 50 per cent expansion of EBIT margins,” Mr Goodwin said, versus normal industry EBIT margins in domestic aviation in the range of 8-10 per cent.to 5.9 per cent over the last three years .
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