The Albanese government should immediately review its decision to block Qatar Airways from launching extra flights to Australia, a Senate inquiry has recommended, as it called for a significantly expanded role and powers for the competition and consumer watchdog in the sector.
The Senate select committee on bilateral air service agreements – set up to examine the rejection of Qatar Airways’ request to almost double its flights into Australia’s major airports – has also recommended its own extension to November so the former Qantas CEO Alan Joyce could front members upon his return to Australia, and so other Qantas representatives who provided “unsatisfactory” responses could be re-quizzed by senators.
The report underscored just how politically charged the saga has become. While senators agreed on a range of recommendations aimed at stamping out anti-competitive behaviour by larger airlines, better considering consumers in government decisions, and reducing strategic cancellations at Sydney airport, Labor and Greens senators issued dissenting reports.
The Nationals senator Bridget McKenzie, the opposition transport spokesperson and chair of the committee, accused the Albanese government of obstructing the inquiry from accessing evidence, of gagging department officials and acting to protect Qantas.
The transport minister, Catherine King, refused to appear before hearings, and the committee recommended the House of Representatives require her to provide evidence before an extended inquiry.
McKenzie said “[Joyce] is the only one that can go to conversations that he’s informally had with his bromance partner, the prime minister, Anthony Albanese, and indeed Minister King”.
However, the Labor senator and committee member Tony Sheldon dissented, labelling the report as filled with “inaccuracies and obvious bias”. Sheldon said Labor senators had “no faith that an extension of the committee would serve any public interest”.
King also responded to the report critical of her behaviour, describing it as “a political stunt” by the Coalition, who she has accused of neglecting the aviation sector when in government.
Meanwhile, the Greens senator Penny Allman-Payne called for the government to strongly consider taking a full or part ownership stake in Qantas to ensure Australians are not disadvantaged by its dominant market monopoly.
A key recommendation, to re-examine the Qatar Airways decision, was made despite King refusing to answer a range of questions as to the reasons behind her decision, which have fuelled concerns about the influence of Qantas and the lack of input from the consumer perspective in government aviation decisions.
The Senate committee has recommended the reinstatement of the Australian Competition and Consumer Commission’s domestic aviation monitoring program, which was introduced as a Covid measure by the Morrison government but came to identify various competition concerns about the behaviour of major airlines, before it lapsed and was not renewed by the Albanese government.
Additionally, the Senate inquiry has called for the government to direct the ACCC to conduct an inquiry into potential anti-competitive behaviour in the domestic aviation market.
The ACCC and other stakeholders should also be consulted when the government is making decisions about granting extra flights to carriers from various countries, so the cost-benefit analysis of such air agreements better factor in consumer and industry concerns, the inquiry recommended. A public statement with reasons for decisions taken should also be published.
The report also recommended the government urgently address issues with the legislation governing access to Sydney airport. A broad chorus of aviation industry leaders and smaller airlines have been pleading for the adoption of changes recommended in a government-ordered review from 2021 that would crack down on misuse of takeoff and landing slots.
Larger airlines operating out of Sydney airport, including Qantas, its budget carrier Jetstar, and Virgin Australia, have been accused of scheduling more flights than they intend to run and strategically cancelling some services in order to block smaller competitors such as Rex and Bonza from accessing scarce peak slots, and leading to high cancellation rates out of Sydney airport.
Qantas Group, which includes Jetstar, and Virgin have consistently denied any accusations of slot misuse.
Addressing Sydney airport’s demand management system was flagged in the government’s delayed green paper released last month.
Sydney Airport responded to the report, with CEO Geoff Culbert saying: “The one thing that has become abundantly clear throughout this whole process is that high airfares, cancellations and the misuse of slots at Sydney Airport are all symptoms of an outdated regulatory framework in the aviation sector.”
After the release of the report, McKenzie said “at a time of a cost-of-living crisis in Australia the government has made decisions that have protected Qantas’s market share and kept the cost of air fares higher for Australian families and exporters, and they have delayed making critical decisions to improve the reliability of domestic travel especially at Sydney airport”.
McKenzie also said “the committee heard evidence that Australians could have been enjoying cheaper flights to Europe and the Middle East as early as April this year had the Government approved additional Qatar Airways flights” and that “clear evidence was provided of the aggressive use of market power by Qantas”.
