Virgin Australia has accused its rival Qantas of spreading rumours that it would collapse as coronavirus threatened the viability of airlines.
Both carriers have suspended international flights until mid-year and there are fears one of them may not survive without a government bailout.
The Australian government has also closed the border for at least six months to prevent travellers with COVID-19 from arriving in the country.
Virgin Australia has complained to the Australian Competition and Consumer Commission after Qantas chief executive Alan Joyce (pictured in 2019) told Sky News it would be unfair for the government to nationalise Virgin to stop it from being placed into administration
Virgin CEO Paul Scurrah (pictured) seized on those comments and accused his Qantas counterpart of spreading rumours Virgin Australia was on the verge of having administrators appointed
Virgin Australia has complained to the Australian Competition and Consumer Commission after Qantas chief executive Alan Joyce told Sky News it would be unfair for the government to effectively nationalise Virgin to stop it from being placed into administration.
‘The government can’t pick winners and losers,’ Mr Joyce said on Friday last week.
‘Whatever aid is given to one company has to be given to every company in that sector.’
ACCC chairman Rod Sims confirmed Virgin Australia chief executive Paul Scurrah had launched a complaint against Qantas, following Mr Joyce’s comments.
‘The complaint that we’ve had from Paul Scurrah is that Qantas is engaging in anti-competitive conduct, designed to damage Virgin as a competitor,’ he told the ABC.
‘We have to look at whether the behaviour has the purpose or the effect of substantially limiting competition.’
Mr Scurrah has accused his Qantas counterpart of spreading rumours Virgin Australia was on the verge of having administrators appointed, Nine newspapers reported.
‘Virgin Australia has seen widespread reporting of public comments from Qantas and its executive team questioning directly or indirectly Virgin Australia’s financial viability and encouraging [the] government to refrain from extending any government support for the aviation industry to Virgin Australia,’ he wrote to the competition regulator.
‘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.
‘We are aware of social media reports that Qantas has sought to promote a campaign that the government exclude Virgin Australia from any COVID-19 financial support package and have urged their staff to write to their local Member of Parliament to support this exclusion.
‘We are gathering together a range of examples of this conduct to send to you.’
A senior Qantas spokesman told Daily Mail Australia that Virgin Australia had threatened court action against it.
‘It’s a tough time for everyone in aviation, which is why we said that any assistance should be to be industry-wide and proportional,’ he said.
‘We don’t think that’s controversial or anti-competitive, and it’s exactly what the government has done with its aviation support package.
‘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.’
Virgin Australia declined to comment on the record to Daily Mail Australia.
The federal government has offered a $715million relief package to the airline industry.
But Australia’s Prime Minister Scott Morrison has declined to provide a loan or buy equity in the national airlines.
His Kiwi counterpart Jacinda Ardern’s government haseffectively bailed out Air New Zealand with a $NZ900 million ($A880million) loan.
Qantas this month temporarily retrenched 20,000 employees or two-thirds of its 30,000 staff.
Credit ratings agency Standard & Poor’s earlier this month downgraded its outlook for Virgin Australia from stable to negative, with the airline’s losses during the past decade exceeding $2.1billion.
Tom Youl, an aviation analyst with IBISWorld, told Daily Mail Australia three weeks ago that Virgin Australia’s high debt levels threatened the viability of the airline, which employed 9,800 people.
‘If it continues to stretch on, the amount of debt they have, there is going to be a concern there,’ he said.
‘In terms of actual viability of the company, it is of concern.’
A Virgin Australia spokeswoman however said at the time the airline ‘strongly rejected’ suggestions its future was at risk, citing the listed company’s $1billion cash balance and the retention of the B+ S&P credit rating.
Virgin Australia (Brisbane airport pictured) has accused its rival Qantas of spreading rumours that it would collapse as coronavirus threatened the viability of airlines. Both carriers have suspended international flights until mid-year and there are fears one of them may not survive without a government bailout