iscover
Stop Press
0 comment
Tpc Blames Compass:
The Trade Practices Commission’s enquiry into the failure of Compass Airlines has concluded that Australia’s first post deregulation operator “failed because it misjudged what was possible in the Australian market. Its strategy of competing very strongly on price against the two powerful established airlines, despite having only limited capital, was almost inevitably bound to fail. . . ” The TPC noted several key areas of misjudgment, notably the type of aircraft operated and pricing strategy, the effect on fare levels of bringing additional capacity into the market, the response of the established airlines and the amount of capital required. The TPC also noted that the standard of terminal facilities available to Compass and its lack of control over these facilities was a factor in its inability to operate effectively, although this became significant only after Compass went after the business passenger.
The TPC rejected Compass’ claim that Ansett and Australian had indulged in predatory pricing tactics including those associated with frequent flyer programmes, first and business classes, lounges for those classes and valet parking. It noted that Compass did not enter the business market until late 1991 and then with a three for one ticket offer which only served to further substantially reduce yields.
This content is available exclusively to Australian Aviation members.
A monthly membership is only $5.99 or save with our annual plans.
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
- Unlimited access to all Australian Aviation digital content
- Access to the Australian Aviation app
- Australian Aviation quarterly print & digital magazines
- Access to In Focus reports every month on our website
- Access to our Behind the Lens photo galleries and other exclusive content
- Daily news updates via our email bulletin
