Australia's competition watchdog has warned Qantas it will take swift action against anti-competitive behaviour such as attempts to swamp airline routes, artificially push down prices or lock in exclusive deals with airports and suppliers.

Key points: Treasurer Josh Frydenberg may grant increased powers and/or resources for ACCC boss Rod Sims to watch over the airlines

Treasurer Josh Frydenberg may grant increased powers and/or resources for ACCC boss Rod Sims to watch over the airlines Mr Sims has warned Qantas against engaging in anti-competitive behaviour, noting it could use its existing powers against the company

Mr Sims has warned Qantas against engaging in anti-competitive behaviour, noting it could use its existing powers against the company But the ACCC does not have the power to ensure Virgin's new owner, when appointed, does not dump less profitable regional routes

Treasurer Josh Frydenberg is, within days, expected to announce changes which could include increased powers and/or resources for Rod Sims, the chairman of the Australian Competition and Consumer Commission, to be in a stronger position to take on the task of keeping the airlines honest.

The coronavirus crisis has caused airlines around the world major disruption and in Australia, its biggest corporate casualty so far has been Virgin Australia.

As Virgin's administrator Deloitte seeks to find a new owner to fill the crucial role of Australia's second airline, there are concerns Qantas will be left with a monopoly and could use its powers anti-competitively.

Prime Minister Scott Morrison has also urged the competition regulator to ensure that once Virgin Australia re-emerges, it does not get "crushed by any anti-competitive actions that may be put in place by another player in the market" that would make it harder for a restructured Virgin to regain a foothold.

Mr Frydenberg has also been in frequent discussions with Mr Sims about the same topic.

Mr Sims said those discussions were confidential and it was ultimately up to the Treasurer to announce whether the ACCC would get additional powers or resources to do its job.

But he said the ACCC already had strong powers to fight anti-competitive behaviour in the airline industry and was prepared to use them.

"The general issue in these sorts of circumstances is where capacity is dumped on various routes to flood the market, force prices down and make it very difficult for the new player, who is, of course, usually very dependent on some early cash flow," Mr Sims told ABC News.

"But, of course, any other behaviour which might seek to exclude them [the new airline in replace of Virgin].

"They [Qantas] could do exclusive arrangements with the airports, with fuel suppliers — [they are] all the sorts of things that we'd be on the lookout for."

Mr Sims said the section 46 of the Competition and Consumer Act, which relates to the misuse of market power, had been recently revamped and allowed the regulator to impose hefty penalties against companies.

"It [section 46] has been a gamechanger," Mr Sims said.

"The law simply says, if you engage in conduct which has the purpose or the effect of substantially lessening competition, that's a breach."

He said providing it had the evidence, the ACCC would be able to seek an injunction through the courts and take the company to court alleging a breach of section 46.

"And if the court were to find that they were in breach of the act, then the penalties are the higher of $10 million or 10 per cent of turnover," he said.

"With Qantas, their turnover is pretty high, so the penalties are significant."

Qantas was making big profits before the COVID-19 pandemic hit and travel bans were enforced.

In August, Qantas reported its revenue for the 12 months to June 30, 2019, rose 4.9 per cent to $17.97 billion and that net profit after tax was $891 million.

Qantas chief executive Alan Joyce told a town hall meeting of Jetstar employees on Thursday that Virgin Australia going into voluntary administration was "very sad news for the people who have worked hard over many years to build that airline".

"I think it's fair to say that over the years they have pushed Qantas to be better," he said.

Mr Joyce said the fact that there were more than 10 groups interested in bringing the airline out of administration was a sign that there would be two airlines in Australia and Qantas would not have a monopoly.

"We've always thought there would be a lot of interest in the business [Virgin]," he said.

"Fundamentally, the Australian domestic market is a good one. No-one, including us, wants only one airline group serving it."

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims says the regulator has strong powers to stop anti-competitive behaviour. ( ABC News: Andrew Kennedy )

ACCC probe into complaint about Alan Joyce still underway

Virgin chief executive Paul Scurrah had been seeking a $1.4 billion loan from the Federal Government but, without that loan and with $5 billion in debts, it was forced into voluntary administration this week.

Weeks ago, Mr Joyce had warned against Federal Government assistance for Virgin, saying help should not be offered to businesses that have been "badly managed".

Mr Joyce had said airlines are facing a "survival of the fittest" scenario as the coronavirus pandemic grounded thousands of planes and resulted in 20,000 workers being stood down at Qantas and 8,000 workers being stood down at Virgin.

But it was comments like that which prompted Mr Scurrah to recently write to Mr Sims alleging Qantas was engaging in anti-competitive conduct designed to damage Virgin.

Mr Sims said the regulator was still gathering evidence in relation to the complaint and could not comment on its investigation.

But once Virgin re-emerges, his hope was that there would be two strong full-service airlines.

"If we are going to come out of this crisis in good shape, we desperately need two full-service airlines," Mr Sims said.

"We'll be alive to any [further] complaints we get from Virgin.

"I'm sure they'll be in very close contact with us if they have any concerns, and I'm sure they will provide us with evidence and we will seek to investigate."

Qantas Group CEO Alan Joyce has said airlines are facing a "survival of the fittest" scenario as the coronavirus pandemic grounded thousands of planes. ( AAP: Joel Carrett )

It is possible Virgin's new owners, once appointed, may decide to cut unprofitable routes, or less profitable ones, into regional Australia and only focus on the lucrative ones into major capital cities.

Until COVID-19 grounded most of its planes, Virgin was operating a fleet of 130 aircraft and flying to 41 destinations.

But it could take years to re-establish a full-service airline, and that's assuming Virgin's new owner even wants to.

Mr Sims said what routes the Virgin replacement airline flies would be a matter for the new owner.

"I think that has to be left to the market," he said.

"Clearly there's nothing anybody can do if the routes aren't very profitable, unless the Government wants to subsidy them, which I don't think it will," Mr Sims added.

"What we want to see is two full-service airlines. Once you've got that, you have to leave it them to decide what routes they fly. That's really not an issue we can intervene on."

Virgin is the first ASX200 company to become insolvent because of the coronavirus crisis, but a host of other companies in other sectors are also under pressure.

Mr Sims said the ACCC was alive to competition issues in other sectors, and would take a strong stance against opportunistic mergers and acquisitions.

"We won't let competitors merge just because there's the coronavirus crisis," Mr Sims said.

"We're going to look through the crisis, and try as much as we can to keep the competitive structure of the economy in place."