Allowing Qatar Airways to add more weekly flights at Australian airports would have made fares cheaper, the competition watchdog says, as pressure mounts on the government to reconsider its decision to block the airline.

The government said it prevented Qatar from adding 21 weekly flights at Sydney, Melbourne and Brisbane airports in the "national interest", saying that national carrier Qantas must remain viable and reducing airfares could threaten it in the medium- and long-term.

But that move has been under growing scrutiny, with aviation groups struggling to stack up the government's argument, former heads of the Australian Competition and Consumer Commission (ACCC) criticising the decision, and a promise from politicians on the crossbench and opposition to pursue the issue.

Former treasurer Wayne Swan, now Labor's national president, told Channel Nine in light of accusations that Qantas sold thousands of tickets for already-cancelled flights, the government's competition decision should be reviewed.

"An appropriate review where things are, given all these revelations, would be good," Mr Swan said.

The head of the ACCC, Gina Cass-Gottlieb, has agreed with her predecessors that allowing Qatar's expansion would have reduced prices, which she would have "welcomed".

Asked on RN Breakfast if allowing the expansion would have lowered airfares, Ms Cass-Gottlieb offered a one-word reply: "Yes."

Qantas thick in controversy as ghost flights, COVID credit issues roll on

She added it was hard to predict by how much it could have cut prices, but quoted Virgin Australia's estimate of 40 per cent.

Separately, Ms Cass-Gottlieb also confirmed the watchdog would pursue penalties of more than $250 million for Qantas selling tickets for ghost flights.

"We are going to seek a penalty that will underline this is not just a cost of doing business, it is to deter conduct of this nature," she said.

"We consider this [Qantas case] should be a record penalty, for this conduct." 

The ACCC announced its plans on Thursday to pursue Qantas in court, alleging that between May and July 2022 the carrier continued to advertise and sell thousands of tickets for flights it had already cancelled in its system.

The consumer watchdog said tickets would be sold for an average of two weeks after flights had been cancelled, and in some cases up to 47 days after a flight had been cancelled. 

The airline has been engulfed in controversy in the final months of chief executive Alan Joyce's 15-year tenure, after it also admitted to holding hundreds of millions of dollars' worth of COVID-era flight credits, which it intended to let expire at the end of this year.

The airline published its decision to scrap the expiry date of those tickets just as the ACCC was announcing its plan to pursue Qantas over ghost tickets.