ABSTRACT
This chapter discusses the Australian experience with predation in aviation, and focuses on the specific Brisbane-Adelaide case. It deals with a brief review of how predation has been handled in general in Australia, and details the 1991 episode, as examined in the Trade Practices Commission (TPC) Report. The chapter considers the Brisbane-Adelaide case and focuses on a range of key issues including: the argument for predation having taken place; the cost conditions and the relationship of prices to costs; and cost disadvantages of incumbents. The key issues also include market definition and market power; whether the behaviour could have been profitable; and the test for predation. The chapter considers the scope for predation in the post 2001 environment. Predation could take place on one route market even though it was not taking place on any other markets.
