The Senate inquiry into the federal government’s rejection of Qatar Airways’ bid for more flights to Australia released its final report on Monday, with the inquiry calling for the decision to be reviewed immediately.
It called for the Australian Competition and Consumer Commission (ACCC) to examine future applications for more flights, with ACCC chairwoman Gina Cass-Gottlieb having told the inquiry it was not consulted about the decision.
Virgin Australia, which is Qatar Airways’ strategic partner, welcomed the inquiry’s recommendation that the decision to block the application be immediately reviewed.
A “reversal could deliver benefits as early as Christmas for Australians seeking to travel to Europe, the Middle East and Africa, for the tourism industry and Australian exporters”, it said.
There were 147 written contributions from the aviation, trade, and tourism industries to the inquiry, which was led by Bridget McKenzie, the opposition’s transport spokesman.
Qantas was the only major airline that argued against the government’s decision to negotiate air rights with Qatar on a more flexible basis.
The committee has also proposed other reforms to domestic aviation policy, such as a further examination of Sydney Airport’s slot system, the introduction of a consumer compensation plan, and the restoration of the ACCC’s authority to probe anti-competitive action in the aviation industry.
“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whole process is that high airfares, cancellations and the misuse of slots at Sydney Airport are all symptoms of an outdated regulatory framework in the aviation sector”, Sydney Airport chief executive Geoff Culbert said.
Dr Peter Forsyth, a researcher who was formerly a professor of economics at Monash University, argued that Australia’s aviation policy is outdated and more concerned about protectionism than providing benefits to consumers:
“What is needed is a rethink rather than a review. In particular, what is needed is a rethink of what the national interest in aviation really is”.
“Does the government want to have lower fares for Australian consumers and to attract overseas visitors, by so doing increasing Australia’s real National Income?”.
“The problem is that the government sees the national interest in essentially protectionist terms, such as improving the environment for the airlines”.
“This is in sharp contrast to the Australian approach to trade in general, which over the years has rejected protectionism”.
The problems with the aviation industry go well beyond the denial of flight to Qatar Airways.
We have seen airlines like Qantas:
- selling tickets on flights they have already cancelled;
- cancelling flights at the last moment, forcing consumers to scramble for worse alternatives (e.g. flights at a worse time or with stopovers rather than direct);
- cancelling flight credits that have not been redeemed within a certain timeframe; and
- offering poor flight options for those seeking to use credits.
Behaviour won’t realistically be improved until airlines like Qantas are legally required to provide fair monetary compensation to consumers when they are disadvantaged.
Hopefully, this review will lead to outcomes that actually benefit consumers.
I am not holding my breath though. Token changes and industry self-regulation is the more likely outcome.
That’s how Australia rolls. Always form over substance.
