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Senate calls for immediate review into Qatar Airways capacity decision

Both the Federal Government and Qantas have emerged bruised by a Senate Committee’s final report into Air Service Agreements.

The Senate Committee has called for an immediate review into Qatar Airways' bid for extra Australian capacity.

An immediate review of the Australian Government’s decision to reject additional flights by Qatar Airways to and from Australia is one of 10 recommendations put forward by the Bilateral Air Services Senate Select Committee in its final report.

The Senate Select Committee chaired by Shadow Minister for Infrastructure, Transport and Regional Development, Senator Bridget McKenzie, said evidence presented at the inquiry supported a conclusion that the Government rejected the effort by Qatar Airways due to intervention by former Qantas CEO Alan Joyce.

In its final 137-page report, the Committee slammed the Albanese Government for stymying the investigation by refusing to release documents and gagging the Infrastructure and Foreign Affairs Departments by delaying responses to questions on notice.

“The committee heard evidence that Australians could have been enjoying cheaper flights to Europe and the Middle East as early as April this year had the Government approved additional Qatar Airways flights, and that Turkish Airlines had planned to offer additional flights in time for families to reunite overseas this Christmas,” Senator McKenzie said.

The report suggested former Qantas CEO Alan Joyce influenced the government's decision.

“At a time of a cost-of-living crisis in Australia the Government has made decisions that have protected Qantas’ market share and kept the cost of airfares higher for Australian families and exporters, and they have delayed making critical decisions to improve the reliability of domestic travel especially at Sydney Airport.”

The Senate report called for the ACCC competition watchdog to immediately resume quarterly monitoring of domestic airfares as it did during the pandemic to prevent price gouging.

“Clear evidence was provided of the aggressive use of market power by Qantas and the committee has called for reinstatement of Australian Competition and Consumer Commission monitoring of the domestic airline industry and for the competition watchdog to inquire into anti-competitive behaviour in the sector,” Senator McKenzie said.

This additional ACCC inquiry into anti-competitive behaviour was another of the recommendations handed down in the final report.

Nationals Senator Bridget McKenzie

The Nationals Senator is now aiming to extend the inquiry to enable it to hear from both Alan Joyce, once he returns from overseas, and under-fire Federal Transport Minister Catherine King, despite the latter already saying she would not give evidence.

Based on 147 written submissions received, the Committee also heard from 100 members of the public who raised concerns about the Qantas Frequent Flyer program including the devaluation of points and lack of available redemption opportunities.

Further public gripes included Qantas’ recent poor performance with its ground handling operations, including lost baggage volumes, flight cancellation rates and significant flight delays, which the High Court recently found was due to the illegal outsourcing of more than 1,700 jobs around Australia.

The report now calls for the government to develop and introduce consumer protection reforms to address these issues.

Qantas Frequent Flyer members also complained about the devaluation of points.

The report also called for the government to respond to a review into the handling of take-off and landing slots at Sydney Airport to increase competition and improve reliability by enforcing a ‘use it or lose it’ rule, which in turn would reduce the cost of airfares for Australians.

The Australian Travel Industry Association (ATIA) welcomed the Senate Committee’s report, saying the 10 recommendations aligned well with requests made in its submission.

Among ATIA’s submission was a request for the government to weigh up costs versus benefits in its decisions into air service agreements and to publish a list of reasons for the decisions it makes.

“ATIA’s submission highlighted the critical importance of consumers being at the heart of all decisions being made about which airlines fly in and out of Australia and the need for that to be reflected in the legislative and regulatory frameworks which govern Government decisions,” said ATIA Chief Executive, Dean Long.

“This is an opportunity to evolve the current approach so that it delivers better outcomes and we look forward to working with Government and the relevant Departments and Authorities on finding a better path forward.”

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Written by: Matt Lennon
Published: 10 October 2023

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