Canberra’s most recent aviation white paper has underlined the challenges facing new entrants in Australia’s airline market and reiterated the government’s view that slot reform is needed at Sydney airport.
While observing that the country’s aviation sector has rebounded strongly from the coronavirus pandemic, the white paper observes that conditions are still difficult. It points to Regional Express’s (Rex) entry into administration in July after it attempted to enter Australia’s domestic market, shortly following the collapse of low-cost carrier Bonza earlier in the year.
“These latest events demonstrate the inherent challenges faced by small players in Australia’s market – which has never grown sustainably beyond 2 major carriers – and highlight the critical importance of strong policy and regulatory settings to protect the rights of aviation customers in a smaller market,” says the white paper.
The white paper observes that slot reform is key at Sydney. It expresses the view that Australia’s incumbent carriers hurt competition by taking more Sydney slots than they intend to operate and then cancelling flights. While legal, this practice acts as a block against competitors.
Speaking on Australian radio, Transport and Infrastructure Minister Catherine King said that while Australia’s airlines are acting within the rules, they are “tactically” deciding when to cancel flights, even referring to the practice as “gaming” the system.
Says the white paper: “The government is implementing reforms to Sydney Airport Demand Management arrangements to increase transparency, rebalance slot allocation towards new entrants, and strengthen compliance arrangements and enforcement action against slot misuse.”
Competition will be further improved when Sydney’s new airport opens in 2026.
The government will also legislate to create a new ombuds capability that will “hold the sector accountable for delivering on its obligations to customers.” In addition, a new Aviation Customer Rights Charter will detail the obligations of airlines and airports, particularly around refunds for cancelled flights.
