Australia's competition watchdog is paying close attention to a dogfight between two major airlines.
Rex has accused Qantas of behaving in a predatory manner by muscling in on its regional routes.
Qantas has accused the rival carrier of throwing a tantrum.
Australian Competition and Consumer Commission chairman Rod Sims is taking all the twists and turns into account.
"Obviously Rex is trying to also go on the Melbourne-Sydney-Brisbane routes, it's going to launch new services on those routes," he told ABC radio on Thursday.
"So Rex is going into Qantas' territory, Qantas is going into Rex's territory, I think it's really important to get the whole picture to make sure that we emerge with a competitive airline industry."
The federal government has given the ACCC information-gathering powers and the watchdog can take action if needed.
"Given our geography and how far towns and cities are away from each other, it's just fundamental that from this pandemic we emerge with at least a competitive airline industry as we had before," Mr Sims said.
"That is just crucial for Australia's economy."
Qantas boss Alan Joyce weighed in on the sky-high stoush while releasing the airline's half-year results.
Mr Joyce playfully dismissed Rex's public threats to pull out of regional routes.
"Rex put these colourful press releases out every now and again. I sometimes think they have Donald Trump writing for them," he said.
"You know, they're very Trumpian in a lot of ways. Very funny I have to say. We get a good laugh out of them."
Mr Joyce said Rex had threatened to pull out of regional routes 13 times in recent years.
"They keep on threatening it. It's the boy that cries wolf all the time. And they've pulled off one route in that period of time," he said.
The Qantas boss said his airline would be more than happy to plug some of the gaps if Rex vacated the routes.
He also whacked the regional carrier for complaining about the financial support Qantas had received during the coronavirus pandemic, saying Rex had pocketed seven times more, based on the size of the businesses.
"So I don't think they can complain about government support," Mr Joyce said.
Qantas has announced 26 new domestic routes since the start of the pandemic.
Eight of them overlap with routes Rex operates on, and the regional carrier has the largest market share on each.
Australian Associated Press
