SYDNEY - Qantas Airways exploits its dominance of the Australian air-travel market to charge passengers excessively high fares, according to an inquiry into unfair pricing by the country’s former antitrust chief.

Professor Allan Fels, former head of the Australian Competition and Consumer Commission (ACCC), singled out Qantas in his final report on Feb 7, accusing it of “price gouging”.

In late 2022, Qantas’ fare increases were so large that a quarter of the country’s inflation was mainly caused by the airline, he said.

The government should remove “unnecessary restrictions on competition on international and domestic aviation”, Prof Fels said in his report, which was commissioned by the Australian Council of Trade Unions.

The government’s decision in 2023 to block more Qatar Airways flights to Australia was “clearly” in the interests of Qantas, he said. Qantas had lobbied against the extra services.

Qantas did not immediately reply to an e-mail seeking comment on Prof Fels’ report.

The findings inflict further damage on the Qantas brand after a string of reputational crises, including allegations by the ACCC that the airline sold tickets on thousands of flights it had already decided to cancel.

Prof Fels’ report follows the announcement of multiple government-led inquiries into corporate Australia during the cost-of-living crisis. Treasurer Jim Chalmers has directed the ACCC to investigate pricing and competition in the supermarket sector.

New legislation, or a so-called divestiture law, should be introduced to allow the government to break up big businesses for the worst competition abuses, Prof Fels said. He cited similar, successful laws in the United States and other countries.

Such a law could possibly apply to Qantas, he added later, after an address to the National Press Club of Australia.

The Feb 7 report challenges the Reserve Bank of Australia’s (RBA) assessment that companies did not excessively increase prices during the period of high inflation to bolster profits. The RBA has maintained that the jump in profitability as prices surged was due to elevated commodity values that lifted mining firms’ income.

Prof Fels said claims that the rise in profit share in Australia are explained by mining prices do not hold up. BLOOMBERG