The Qantas Airways Ltd (ASX: QAN) share price is experiencing some turbulence today.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline closed Friday trading for $6.74. In morning trade on Monday, shares have ranged from 0.45% higher to 0.45% lower and are currently trading flat, back at $6.74.
For some context, the ASX 200 is down 0.7% at this same time.
This comes as the Coalition proposes a potential forced divestment of Qantas and its budget operator, Jetstar.
Is the ASX 200 airline too dominant?
The Qantas share price is lower as investors mull the potential of seeing the flying kangaroo forced to divest itself from Jetstar under a Coalition proposal.
The Opposition has already expressed its desire for greater competition in the Aussie retail space. That plan includes the potential breakup of market leaders Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL). Wesfarmers Ltd's (ASX: WES) Bunnings business is also under the monopolistic microscope.
According to Victorian Nationals senator Bridget McKenzie (courtesy of The Australian Financial Review):
[Treasurer Jim Chalmers] will have failed another reform opportunity unless he deals with divestiture as a measure to ensure consumers' interests are protected, and not at the mercy of the entrenched duopoly…
McKenzie pointed to a previous statement issued by the Treasury indicating that Qantas reacted differently to competition from Jetstar than it would to rival airlines. An alleged duopoly that enabled Qantas to charge higher prices.
"Qantas raises prices when Jetstar, an affiliated airline, enters the market, suggesting the presence of Jetstar allows Qantas to exercise a greater degree of price discrimination," Treasury stated.
While that may benefit the Qantas share price proposal, McKenzie doesn't believe it's in the best interest of Australian travellers.
The shadow minister said:
Australians want an airline sector where you have genuine choice, where your plane takes off and lands on-time, and your bags arrive at your destination with you.
Labor's inaction on reforming regulations that discourage competition has driven up the cost of airfares and permitted poor customer service.
McKenzie does not want to force Qantas to sell Jetstar. Instead, she wants the government to have the power to force a divestiture.
It's not clear yet how that proposal would pan out for current Qantas shareholders, who may end up holding stock in two competing airlines.
Qantas share price snapshot
The Qantas share price has been a strong performer in 2024, up 26% year to date. That compares to a 10% gain posted by the ASX 200 over this same time.
