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10 October, 2023

The senate inquiry’s verdict is in! Here’s how to fix Australian aviation

Modern passenger airplain taking off from airport airfield against Sydney city CBD buildings and towers towards blue sky.

By James Harrison

The Australian aviation sector has had the spotlight put on it over the past month as an array of concerns regarding anti-competitive behaviour, government lobbying, bilateral air service agreements and much more came under the spotlight.

Initially triggered by transport minister Catherine King’s controversial decision to block additional capacity for Qatar Airways into Australia, a senate inquiry investigated an array of political and business figures on the current state of Australia’s aviation industry.

From the month-long inquiry, the nine senators, led by nationals member Bridget McKenzie, released 10 recommendations on how to fix the aviation sector.

Review the Qatar Airways blocking

This one probably comes as a shock to no one. King’s incredibly unpopular and unclear decision to block Qatar Airways’ bid to double its capacity to four major Aussie cities has drawn almost unanimous criticism from the Aussie travel industry.

The only player in vocal agreement with the decision is Qantas, which advised King on the initial decision. This has brought to light the close ties between the national carrier and the government and made people question why Australia has so many bilateral air service agreements.

Transparency with bilateral air service agreements

The committee has recommended that the Australian Government should be open with decisions regarding bilateral air service agreements. It said it should have regard to a cost benefit analysis, consult widely with key stakeholders including the Australian Competition and Consumer Commission (ACCC), and publish a statement of reasons for decisions taken.

This comes as King gave a multitude of reasons for her blocking of Qatar, where she frequently went back on her word and flip flopped. The reasons include the additional capacity not being in the national interest, securing Australian jobs, a controversy around poor treatment of Australian women on a Qatar Airways flight and protecting the environment.

Break up the major players

In its submission, the committee has called for the government to review reform options to strengthen competition in the domestic aviation industry, including potential divestiture powers to remedy any misuse of market power.

This could mean the breaking up of Qantas’ powers in order to reduce attempts at monopolisation of Australian aviation.

Image source: iStock/ai_yoshi

ACCC investigate anti-competitive behaviour

Amid allegations of Qantas and Virgin Australia engaging in anti-competitive behaviour, the committee has recommended that the Australian Government direct the ACCC to conduct an inquiry into potential anti-competitive behaviour in the domestic aviation market.

Restart ACCC monitoring of domestic competition

The ACCC monitoring of domestic aviation was introduced by the Coalition Government in mid 2020 and ran for three years. The committee has called for this to restart as it wants the senate to urgently pass the Competition and Consumer Amendment Bill 2023.

Consumer protection

With cancellations, delays, lost baggage and the devaluation of loyalty programs plaguing the aviation industry post-pandemic, the committee has recommended that the government develops and implements consumer protection reforms as soon as it can.

Slot hoarding at Sydney Airport

The committee has recommended that the government responds to the review of the Sydney Airport Demand Management Scheme including the Peter Harris recommendations to improve airport slot management and strengthen the ‘use it or lose it’ rule.

Alan Joyce face the inquiry

The former Qantas boss was absent from this inquiry as he was overseas and refused to call in via video call. The senate has recommended that it reconvenes under the same conditions at a future date so that it can hear from Joyce and government affairs representatives from Qantas, as the committee claims that Qantas’ answers to questions on notice from senators were unsatisfactory.

Hear from Catherine King

Similarly to Joyce, minister King was not in attendance for the inquiry, but was due to her being on leave that she had booked several months prior.

The committee has called for King to show face before a re-established committee to discuss bilateral air service agreements and her decision to block Qatar Airways.

Limit cabotage

The committee recommends that the Australian Government consider introducing limited cabotage for foreign airlines to regional airports.

(Featured Image: Airplane taking off from Sydney Airport – iStock/zetter)

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Bilateral Air Service Agreement qantas