Home » News » Airfares, Qantas, Qatar Airways blocking, bilateral air service agreements all under the microscope at senate inquiry

20 September, 2023

Airfares, Qantas, Qatar Airways blocking, bilateral air service agreements all under the microscope at senate inquiry

Manchester, United Kingdom - August 07, 2015: Qatar Airways Airbus A330 tail livery at Manchester Airport.

By James Harrison

The state of Australian aviation copped the spotlight yesterday when a senate inquiry examining bilateral air service agreements and the government’s decision to block Qatar Airways.

Taking aim at the blocking was Airline Intelligence and Research CEO Tony Webber, who said the additional capacity would have delivered cheaper airfares and injected $1 billion into Aussie tourism.

“There will be a material reduction in airfares … somewhere between seven per cent and 10 per cent,” Webber told a Senate select committee. He went on to criticise Qantas’ role in the blocking, calling the Aussie carrier an “exceptionally aggressive competitor.”

“If a new carrier encroaches on its routes, on its market share, then it will aggressively respond,” he said.

Adding to this sentiment was outgoing Sydney Airport CEO Geoff Culbert, who said aviation was a “cutthroat” industry, something that was particularly evident through his interactions with Qantas.

“We don’t always see eye to eye on every issue,” Culbert told senators.

“It’s no surprise to anyone if I said that they always had a strong presence in Canberra […] and they are a robust counterparty for us to negotiate with.”

Culbert criticised slot hoarding practices at his airport, saying that about 10 per cent of slots were waisted under the current ‘use it or lose it’ scheme which has contributed to flight delays and cancellations.

“Cancellation rates are too high, access to slots are way too low, and the travelling public are the ones who are paying the price,” Cubert said.

Featuring at the inquiry was the head of the Australian Travel Industry Association (ATIA) Dean Long, who told the senate a “revolution rather than a recalibration of Australia’s aviation industry is needed to ensure consumers are better supported.”

Among the reforms ATIA believes are critical are the need to simplify refund rights for consumers where a flight is cancelled and passengers not accommodated and expansion of Australia’s ‘open skies’ air services agreements from nine to a level comparable with leading aviation markets (US has 100 open skies agreements, Canada 23).

“Until consumers are at the heart of decisions being made about which airlines fly in and out of Australia, and it’s not just about the impact on airlines, we won’t see improvement. The current approach was born in 1944 and it’s frankly outdated,” Long said.

Dean Long and Skroo at the senate inquiry

This comes as international airfares from Sydney in 2023 up to 99 per cent higher than pre-COVID, according to ATIA.

“Aviation is more than airlines and airports and with 70 per cent of all international travel conducted by Australians booked through our members, we need to be consulted in order to get these settings right. In the 12 months to August 2023, over 10 million tickets worth nearly $14 billion were issued by Australian travel agents,” Long said.

Echoing Long’s point at the inquiry was the boss of Flight Centre Graham ‘Skroo’ Turner, who called for the Australian Competition and Consumer Commission (ACCC) to be involved with how foreign airlines access Australian airspace, alongside more open skies agreements with other countries.

“The ACCC is generally involved with code share determinations. We believe it should also be consulted on bilateral agreements,” Turner said.

Skroo said that the debate around the government’s controversial blocking of Qatar Airways would not disappear until it gave a clear explanation for its decision.

“There’s a story out there about protecting Qantas, I think it runs deeper than that. I would like to hear from the Minister,” Turner said, adding that the decision favoured Qantas.

The transport minister Catherine King has received widespread criticism for her decision to block Qatar Airways.

She withheld documents from parliament regarding her decision, citing public interest immunity.

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accc australian competition and consumer commission Australian Travel Industry Association Dean Long flight centre Graham 'Skroo' Turner qatar airways