Regional Express has been accused of "anti-competitive conduct and predatory behaviour" by rival carrier Sharp Airlines.
The claim relates to Rex's decision to start offering flights between Tasmania's Burnie and King Island as part of a new service funded by a COVID-19 assistance program.
Sharp Airlines, which has long flown Burnie to King Island, called on the federal government to reconsider its support of Rex given they appeared to have "surplus funds" to launch routes that did not exist before the pandemic.
"Whilst all airlines globally are suffering due to COVID-19 it appears Rex has the capability of expanding their network and with the view of weakening an existing operator," Sharp Airlines said in a statement.
"... Even if the passenger numbers return to pre-COVID-19 levels in the next 12 to18 months, Rex's entry on this route with increased capacity will diminish load factors to a clearly unsustainable level for two operators to be commercially viable."
The complaint comes just weeks after Rex accused another rival Qantas of "anti-competitive and predatory behaviour" for starting a new service between Sydney and Orange in NSW's Central Tablelands while receiving COVID-19 support.
Sharp Airlines said Rex was "hypocritical in the extreme" for complaining about something they were doing in the Bass Strait and called for an investigation by the Australian Competition and Consumer Commission.
BRING IT ON, SAYS REX
Rex introduced the new King Island flights as part of a "combined" interstate service that operates between Melbourne, King Island and Burnie.
The company said the move was "implemented as an efficiency measure in the same way that Rex introduced a new sector for Wagga Wagga-Albury as a result of operating a combined Melbourne-Albury-Wagga service".
Rex said while the combined routes as a whole were funded by the Commonwealth's Regional Airline Network Support network, the section between Burnie and King Island was not.
"... But the additional flying cost is covered by the additional passenger numbers," Rex said.
"Rex welcomes the scrutiny of the ACCC and encourage Sharp Airlines to lodge a formal complaint with the ACCC."
The story Rex accused of 'anti-competitive conduct' during COVID-19 first appeared on The Advocate.