Qantas faces ACCC scrutiny

Airline under scrutiny over bid to steal market share from Virgin.

Qantas Airways (QAN) faces an investigation by the Australian Competition and Consumer Commission (ACCC) for the airline's potential misuse of market power in relation to its rivalry with Virgin Australia, according to The Australian Financial Review.

The investigation, which was launched in August, centres on Qantas's move to add capacity on air routes in a bid to gain control of 65 per cent of the domestic airline market.

Businesses are forbidden to use their substantial market share “for the purposes of eliminating or substantially damaging a competitor”, the AFR added.

The ACCC's interest in actions by Qantas seems to have first been sparked by comments made by the head of Qantas's domestic business, Lyell Strambi, who said he would add two planes for every one added by Virgin.

In the latest bout between the two airlines, Virgin has threatened to sue Qantas over comments made by Qantas chief executive Alan Joyce about Virgin's $350 million capital raising.