The Albanese government’s long-gestating aviation white paper, finally delivered on Monday, is a disappointing win for the Qantas-Virgin duopoly and a slap in the face for airline passengers.
That’s despite positive headlines, presumably won due to the government leaking the document to mainstream media. Take this from Guardian Australia: “New Australian aviation ombudsman could force airlines to pay cash compensation for delayed flights.”
Note: could. The Albanese government’s document, ominously subtitled “Towards 2050”, is big on promises and possibilities, but falls short on substance and any immediate action to improve competition and the sagging customer experience.
The upside is government recognition, finally, that one of the nation’s most concentrated sectors — Qantas and Virgin control more than 90% of the domestic market — is under-regulated. The paper outlines that the Aviation Customer Advocate, the toothless industry self-regulator funded and run by the airlines, will be replaced by an Aviation Industry Ombuds Scheme and Customer Rights Charter. Both are yet to be finalised and detailed — and won’t be until at least 2026.
Qantas and Virgin had agreed to support an ombuds scheme, at least conditionally, knowing that increased oversight was unavoidable. Crucially, this means they have dodged an automatic passenger compensation scheme for cancellations, delays and lost luggage, such as exists in the EU and was recently legislated in the US. The new ombuds scheme will instead “resolve disputes” between airlines and customers — and we all know it’ll be taxpayers who will pay for costs.
“Why do we have to wait further for what the compensation will be? This just means Qantas will run interference. Wasn’t the point of the white paper to come up with the compensation, not kick the can down the road?” one Qantas pilot told Crikey.
The aviation white paper also promises that the government will “take further steps to improve competition to support better customer outcomes”. Yet it only offers previously announced initiatives and a future Productivity Commission inquiry into the economic regulation of airports.
The paper also fails to substantially address the structural concerns plaguing the aviation industry, such as the lack of pilots and aircraft maintenance engineers. There are plenty of platitudes, but beyond “policy settings” there is no financial commitment to the growing problem.
Airline engineers told Crikey that understaffing was an ongoing issue and that it was partially due to a lack of trained staff, a result of former Qantas CEO Alan Joyce winding down the airline’s previous apprentice scheme.
“In the absence of Qantas or Virgin having to train pilots and engineers, why doesn’t the government invest in programs?” another pilot said.
Qantas’ FY24 result, due Thursday, is forecast to show billions in revenue, highlighting how the government-backed company is still being run for shareholders and executives, not customers or staff. The Qantas share price popped up a handy 1% to $6.34 on the white paper’s release.
The fact that customer service issues won’t be addressed for several years — and with no guarantee that any ombudspeople will be properly resourced or have sufficient teeth — shows that the Wily Old Roo still holds an iron grip on Canberra.
Meanwhile, Qantas CEO Vanessa Hudson has been quietly cleaning house, announcing to staff last week that two senior figures of Alan Joyce’s inner circle — general counsel Andrew Finch and head of sustainability Andrew Parker — will leave the company.
Finch was the company’s top legal officer during its industrial-scale, illegal sacking of 1,700 ground staff during COVID, as well as during the company selling tickets on cancelled “ghost” flights, which resulted in a fine and remuneration agreement costing the airline around $120 million. Qantas is facing a class action lawsuit launched last week over subsidiary Jetstar’s refusal to offer cash refunds.
The Federal Court is still mulling the compensation Qantas will pay its illegally sacked staff. Yet thanks to the glacially moving Transport Minister Catherine King, it will be some years before the airline, or any other airline in Australia, will be forced to automatically refund customers inconvenienced by cancellations and delays.
Another pilot noted to Crikey that it’s a government white paper of which Yes Minister’s Sir Humphrey Appleby would be very proud. “Whether its promised path to better consumer protection pans out, well, we shall have to keep waiting.”
Should Australian airlines be forced to compensate customers affected by cancellations and delays? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
