Qantas-Virgin row: ACCC’s Rod Sims to examine Alan Joyce’s remarks on Virgin Australia

Rod Sims says Virgin boss Paul Scurrah’s complaint about Qantas CEO Alan Joyce’s comments on Virgin is ‘worth looking into’.

Virgin CEO Paul Scurrah and Qantas CEO Alan Joyce. Pictur: Getty Images

Airlines’ struggle to stay afloat in the current coronavirus crisis has taken a surprising turn, with the competition watchdog called on to rule on comments by Qantas chief executive Alan Joyce about rival Virgin Australia.

Australian Competition & Consumer Commission Rod Sims confirmed Virgin Australia chief executive Paul Scurrah had made a formal complaint about Qantas, and it was “worth looking into”.

“It’s potentially a serious issue,” Mr Sims said.

Mr Scurrah’s complaint centred on Mr Joyce’s recent comments suggesting the government should not look after companies “that had been badly managed for the last 10 years”.

His letter to Mr Sims said he had seen comments from Qantas questioning directly or indirectly Virgin Australia’s financial viability and urging the government to refrain from extending any support for the aviation industry to the airline.

“We have received reports of Qantas briefing journalists on the false pretence that Virgin Australia cash reserves are running out within days and that Virgin Australia has appointed administrators,” Mr Scurrah wrote. “We are gathering together a range of examples of this conduct to send to you.”

Mr Sims said separate to Virgin Australia’s complaint, he was concerned about the language being used by Mr Joyce in the current climate. “The ‘survival of the fittest’ (reference) followed by language about government not giving (Virgin) support — it’s just the implication that Virgin might be in trouble,” said Mr Sims.

“That could be seen as ‘wouldn’t it be good if they weren’t here anymore’. It’s not what we need to be seeing at this time in Australia.”

A Qantas spokesman said it was a tough time for everyone in aviation. “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. We’re not,” 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.”

Mr Sims said the Prime Minister had made it clear a competitive airline industry was important to Australia’s economic future.

“We entered this crisis with two major full service airlines and it’s crucial we come out of it with two full service airlines,” he said.

“I just think this is a time for co-operation in the middle of this crisis. We see that with banks, we see that with supermarkets.”

The ACCC was also examining a complaint about Qantas made by Regional Express Airlines, which accused the Flying Kangaroo of dumping capacity on key regional routes to force them to exit.

Qantas and Virgin Australia are expected to announce further changes to their domestic network in coming days following border closures by five states, and the Queensland Premier’s warning flights would be met by police.

Virgin Australia has already suspended six routes operated by partner Alliance Airlines between Brisbane and Alice Springs, Cloncurry, Emerald, Mt Isa, Rockhampton and Port Moresby.

Alliance said in a statement to the ASX that the airline was currently reviewing the impact of this reduction on operational staff.

Meanwhile in an email to Virgin Australia employees, Mr Scurrah revealed the airline had sought assistance from the New Zealand government.

“For New Zealand team members and those outside of Australia who have reached out, we are working on getting certainty to you as soon as possible,” he said.

“Unlike Air New Zealand who have been supported by a government package, we have not yet heard back from the New Zealand Prime Minister and we will continue to pursue this.”