Qantas has been accused of being an aggressive industry player with a “strong presence” in Canberra, amid allegations it is muscling out its competitors by strategically scheduling and then cancelling economically unviable flights.
A Senate inquiry is scrutinising how the airline industry operates, and the federal government’s role in it, after a decision by the transport minister, Catherine King, to deny Qatar Airways running an additional 28 services to major cities.
Sydney Airport’s chief executive, Geoff Culbert, told senators on Tuesday Qantas was one of its toughest counterparties during negotiations, alluding to its influence in political circles.
Culbert named Qantas and its budget subsidiary, Jetstar, among the domestic airlines that had been engaging in anti-competitive behaviour, leaving customers with higher air fares.
An earlier submission from the airport pointed to the “outdated” legal and regulatory framework that had allowed the system to become “clogged up” while incentivising anti-competitive behaviour.
In particular, the airport said airlines had been using a strategy, known as “slot hoarding”, to hold on to flight slots despite not necessarily intending to go ahead with the flights for economic reasons.
The practice prevents competitor airlines from applying for those empty slots, which has a flow-on effect for consumer prices.
“Fundamentally, the way the current rules are written incentivises incumbent airlines to perpetually over-file and hold too many slots,” the airport’s submission said.
“Slot filing data demonstrates that this has been allowed to go untempered for many years, and unless there’s a change to the rules, we do not see a scenario where behaviours will change or competition can increase.”
Separately, the competition watchdog, the ACCC, has accused Qantas of cancelling one in four flights during May and July 2022 to, among many reasons, retain slots – an accusation Qantas has repeatedly rejected in the past.
Culbert pointed to Qantas’s lobbying efforts in Canberra, describing them as a “robust counterparty” on matters relating to Sydney airport.
“I don’t think it would surprise anyone if I said they have always had a strong presence in Canberra. We’re aware of that. We do our own lobbying and advocacy, as does other airlines and other airports,” Culbert said.
“Historically, they have had a strong presence in Canberra and they are a robust counterparty for us to negotiate with in respect of anything to do with Sydney airport.”
The comments had been echoed earlier by the airline’s former chief economist-turned aviation consultant, Tony Webber, who described Qantas as “exceptionally aggressive” in the domestic market.
King has yet to act on review recommendations handed to the then Coalition government in 2021 to crackdown on slot misuse.
Culbert called on the Albanese government to act within the “next month or so” to tighten the slot rules.
The committee chair and Nationals senator, Bridget McKenzie, again accused the federal government of running a “protection racket” for Qantas during a break in the inquiry, pointing to the Qatar Airways ruling and the treasurer, Jim Chalmers’, decision to rule aviation out of his competition review.
“At every single step, the Albanese Labor government has made decisions that favour Qantas and disadvantage Australian travels,” she said.
When asked if the government was too close to Qantas, the Labor senator Tony Sheldon distanced himself from the airline.
“It’s not my place to make decisions for the government but I tell you what, this country needs more consumer protections from the likes of Qantas and the sooner that happens, the better,” Sheldon said.
The inquiry will hold another hearing in Perth on Friday. It’s expected union officials and executives from Qantas will front senators.
