Competition versus Predation in Aviation Markets

Chapter 4Predatory Behaviour in Australian Aviation Markets

Peter Forsyth

Introduction

In Australia, there has not been an extensive history of competition regulators pursuing allegations of predatory behaviour. There have been a few cases, though many fewer than in other areas of antitrust, such as price-fixing. This is possibly because the ideal conditions for predation, a dominant firm with relatively weak new entrants, have not often been present. With the deregulation of markets such as the air transport and telecommunications markets, this is changing.

Prior to airline deregulation in 1990, there was little scope for predatory behaviour in the domestic market, since there were two dominant carriers, and entry on to trunk routes was prohibited. ...