Thu Oct 12

Qantas won't like it, but Australian travellers could be about to get a better deal on flights

Written by Gui Lohmann, Professor in Air Transport and Tourism Management, Griffith University

Weeks after Qantas chief executive Alan Joyce brought forward his resignation to help Qantas “accelerate its renewal”, the company’s chairman Richard Goyder today announced he too is retiring early, to “support restoration of trust ^[1]”.

But the early retirement will take place “prior to the company’s annual general meeting in late 2024” – meaning Goyder will be in the chair for a while yet.

This will give him time to (among other things) help Qantas respond to the Senate inquiry into air services, which reported on Monday ^[2].

If acted on, some of the report’s recommendations would shift power away from Qantas – such as by giving travellers automatic cash compensation for delayed or cancelled flights.

But the inquiry arguably still didn’t go far enough, shying away from bolder action already taken in Europe.

What did the Senate inquiry recommend?

The Senate inquiry was set up to investigate the Albanese government’s refusal to approve extra flights into Australia sought by Qatar Airways ^[3], but broadened its scope to examine the way Qantas has been treating its customers ^[4].

Among its recommendations are that:

the government immediately review its decision not to increase capacity under Australia’s bilateral air services agreement with Qatar
when making decisions relating to bilateral air service agreements, the government have regard to cost benefit analysis, consult widely with key stakeholders, and publish a statement of reasons for decisions taken
the government review reform options to strengthen competition in the domestic aviation industry, including potential divestiture powers
the government direct the Australian Competition and Consumer Commission to conduct an inquiry into potential anti-competitive behaviour in the domestic aviation market
the government develop and implement consumer protection reforms as soon as reasonably practicable to address significant delays, cancellations, lost baggage and devaluation of loyalty programs.

The committee also wanted to be reappointed so it would be able to reexamine witnesses who were unable to appear, including Alan Joyce and Transport Minister Catherine King.

Consumer cashback and action on Sydney Airport

Specific suggestions in the report would shift power away from Qantas.

Automatic cash refunds are on the agenda. Shutterstock

One is automatic cash compensation for delayed or cancelled flights, of the kind Europeans have enjoyed for almost 20 years ^[5].

Another is for the government to respond to an independent review’s recommendations on improving Sydney Airport’s “slot management system” (how air traffic is managed), which reported back almost three years ago ^[6].

Yet another concerned “cabotage ^[7]”: the ability for foreign airlines to pick up domestic passengers on a domestic leg of an international flight. The committee recommended the government consider limited cabotage.

The government hasn’t yet indicated which of the recommendations it plans to act on.

Open skies, or tightly-controlled skies?

The committee could have, and perhaps should have, put forward bolder recommendations.

One would have been unrestricted open skies ^[9] agreements, of the kind Australia already has with China, India, Japan, New Zealand and Singapore. This would see the government remove itself from decisions about landing slots and leave that to the airports.

An alternative approach – almost the opposite – would be retaining the power to decide who lands, but using it to achieve outcomes the government wants, such as commitments from countries including Qatar on things such as workers’ rights.

The European Union has shown what could be done. It extracted key concessions ^[10] from Qatar over workers’ rights and environmental protection before signing off on an Open Skies agreement in 2021.

Prime Minister Anthony Albanese, a former transport minister who understands the detail of aviation policy, might be particularly keen on this idea, given Labor’s commitment to workers’ rights.

Sweeping changes ahead

Next year, the government will release a white paper on aviation policy through to 2050, after obtaining feedback ^[12] on a green paper it released last month.

Those next 30 years will be far from business-as-usual for airlines and airports, whatever decisions the government takes now, and however Qantas responds.

Ultra-long-haul aircraft are likely to link Paris with Perth, and even London with Sydney within a decade. They are likely to force new alliances between airlines that today seem unlikely bedfellows.

And the chorus against the excesses of long-haul travel is likely to become louder.

Prince William’s refusal to travel to Sydney ^[13] for the Women’s World Cup Final because of the size of the carbon footprint might be a sign of things to come.