Qantas escapes ticket price cap

MELBOURNE - Australia's competition watchdog has denied that regulators will look to cap Qantas ticket prices now that Ansett Australia has folded.

Australian Competition and Consumer Commission chairman Allan Fels described as unjustified comments at the weekend by Qantas chief executive Geoff Dixon that the commission would drive Qantas into the red trying to curb its near-monopoly.

"I've made it clear we are not seeking regulatory power over Qantas' prices. We haven't come out in favour of price regulation," Fels told ABC Radio.

"All we have done is to suggest that in the forthcoming review of the Trade Practices Act, the ... provisions that give some protection to people entering an industry to compete against powerful incumbents should get better protection than at present," he said.

Ansett stopped flying from midnight after the Tesna consortium, led by Melbourne trucking and rag trade magnates Lindsay Fox and Solomon Lew, pulled out of a A$3.5 billion ($4.27 billion) agreement to buy the failed airline.

Ansett's demise leaves Sir Richard Branson's no-frills Virgin Blue as the only domestic rival to Qantas, which has grabbed nearly 85 per cent of Australia's A$10 billion ($12.2 billion) air transport market after Ansett went into administration last September.

Shares in Qantas have jumped about 9 per cent since news of Ansett's death, closing on Friday at A$4.52 ($5.52).

Fels, renowned for trying to clamp the power of Australia's former monopoly telecommunications carrier Telstra, said Qantas was in the same boat as Telstra.

"Qantas is in a position of remarkable market power."

But he said the commission was not looking for new rules to apply specifically to the airline industry in the Government's review of the Trade Practices Act.

"We'll be submitting general changes in the law, not aimed at Qantas as such."

- REUTERS

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