The Australian Travel Industry Association (ATIA) will today appear before the senate committee inquiry into the blocking of Qatar Airways and examine reforms needed for bilateral air service agreements.
A bilateral air service agreement is an agreement between two governments that allows an airline to fly to nation, or add new routes.
There are many factors, such as geopolitical issues between countries, as well as key areas of negotiation, like how much freight an airline will carry into and out of a country.
Qatar Airways already has an an agreement with Australia, but was seeking to double its capacity into major Australian cities, which was controversially blocked by the Australian Government.
ATIA said its submission to the senate committee inquiry highlights the critical flaws in the existing system, where decisions often lack a comprehensive understanding of their impact on passengers.
“The Senate Committee Inquiry offers a pivotal opportunity to address the issues that have long plagued Australia’s aviation industry and air ticket distribution landscape, with ATIA taking the lead in this fight for our members and the broader travel industry,” CEO, ATIA, Dean Long, said.
The key message of the submission, that the need for reform is glaring, and it is crucial that all stakeholders, not just airlines, have a direct say in determining supply and demand. It also raises some of the unintended effects of the new distribution capability (NDC) on Australian consumers.
“We are seeing the current application of NDC translate into limited choices for Australian consumers and businesses, increased airfares, and a further reduction in competition within the air ticket distribution market,” Long, continued.
“We have a good relationship with our airline partners and we look forward to working further with them on NDC’s adoption to address these issues for Australian consumers and the agents who support them.”
NDC’s adoption has allowed airlines to assume the role of sole price makers, enabling them to enhance profit margins on their most affordable products without market competition pressure. This transformation has resulted in notable consequences that have serious ramifications for Australian consumers and the agents who support them.
“The current system determining which airlines can operate in and out of Australia was established in 1944. This system was designed to protect the interests of national carriers which at that stage were largely government owned. While times have changed, the system has not.”
“Despite ATIA’s members selling a staggering 10 million tickets, amounting to a total value of $14 billion over the past 12 months until August, the Department of Transport fails to consider their perspective when deciding which bilateral aviation agreements to approve.”
“There is a critical and compelling need to redefine national interest in decision-making. ATIA’s submission highlights the critical flaws in the existing system where decisions are made without a comprehensive understanding of their impact on passengers.”
A full copy of ATIA’s submission is available HERE.
