28 September 2023

Government needs to deal with market bully Qantas

| Ian Bushnell
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executive speaking to media at airport

Canberra Airport chief executive Stephen Byron says Australia needs a competitive third airline. Photo: Region.

Canberra Airport boss Stephen Byron didn’t hold back in a blistering submission to the current Senate inquiry into the air travel passenger market.

The target was of course Qantas, accusing the Spirit of Australia of not acting in any sort of spirit of fair play but indulging in misleading and deceptive behaviour over flight cancellations, particularly on the Sydney-Canberra run, profiteering and crushing any whiff of competition.

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Mr Byron has his own patch to protect but he was only saying what most Australians are thinking about Qantas’s record profits and sky-high airfares.

Taxpayers got Qantas through the dark days of the pandemic and the airline has repaid that faith by sacking workers illegally, ratcheting up airfares and thumbing its nose at travellers who have to cope regularly with cancelled or delayed flights, sometimes due to mechanical issues in its ageing fleet, but more often because the airline deems there aren’t enough passengers.

Then there is the $21 million golden handshake to the architect of all this, former CEO Alan Joyce.

Mr Byron said Australia’s three-airline system was a sham and offered little competition, with Qantas and its supposed low-cost subsidiary Jetstar hogging 80 per cent of the profit pool in the domestic market from 66 per cent of the passenger volume.

“Qantas and Virgin are not providing effective price competition to each other – if they were, airfares would not be exorbitantly high,” he said.

The friendly duopoly meant consumers were being shafted, and other carriers such as Rex or Bonza were insignificant.

“In the 2022/23 financial year, Qantas Domestic achieved an operating margin of 18.2 per cent – Qantas has previously told investors that the normal industry margin is 8 to 10 per cent,” Mr Byron told the committee.

He called for the competition watchdog to resume monitoring the industry and for greater consumer rights for passengers. including refunds for cancelled flights.

“There is no greater industry demanding of such scrutiny through its intense concentration and there is no more important time for it to be in force given the current behaviour,” Mr Byron said.

But he also said Qantas should be forced to hive off Jetstar so its errant child could be a truly independent carrier and offer real competition.

Any competitive third airline must have at least 15 per cent of the market to be effective and to have the critical mass to compete against Qantas, Jetstar and Virgin, as well as 15 per cent of the crucial domestic slots into and out of Sydney Airport being available to it.

Mr Byron said this could be done through legislation or leverage, given the aforementioned taxpayer subsidy and the protection given from overseas carriers such as Qatar Airways wanting to fly domestic routes.

“The status quo is not an acceptable outcome,” he told the committee. “There needs to be significant change and this will not happen without a significant intervention by government.

“Qantas has demonstrated that unless they are forced by a regulator or the highest court in the land, they will do what they please. Airfares have not gone down since the Qantas CEO departed and nothing has changed.”

But it’s not just about fewer people being able to afford to fly or consumer rights, Qantas’s ruthless pursuit of profits is trashing a brand built on being the safest and most reliable airline in the world.

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Carriers have come and gone in bids to make the Australian market more competitive but the nation’s population these days, especially on the eastern seaboard, should be enough to support three independent major airlines.

Mr Byron is right, though. Government intervention is required to not just protect consumers but establish an environment in which air travel can be accessible and reliable.

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Qantas was selling already cancelled fights for months past when they knew the flight was cancelled.

Qantas came up with use the money or we get to keep it unilaterally decided by them.

Qantas seemed to support the voice in exchange for the qatar deal being canned.

Whats to bet that Qantas hasn’t been killing the highspeed rail project too.

They rocked up to government enquiry and couldn’t provide any answers.

That’s not the spirit of the Australia that i remember!

I’m sorry but this just sounds like a spoilt child whinging. Airport parking fees are out of control. The airport crushes small aircraft operators with exorbitant fees. This airport is one that was built using tax payer funds and then transferred to a rich family for pennies. Now they are moaning that they are being bullied? Forgive me for being dismissive of this petty complaining by people who are bullies themselves…

Shan Weereratne7:49 pm 02 Oct 23

The Taxpayer funded airport AKA the “shack” was demolished and replaced with a modern airport built with funds raised by the owners, get your facts right please.

Well Ken Behran you should really get your facts straight if you want to comment on anything Canberran!

The Canberra Airport was sold in 1998 to Canberra businessman Terry Snow. This was part of then PM John Howard’s plan to privatise government run operations.
The airport has been completely overhauled since then. It is now an airport worthy of a major capital city. My experiences travelling to, through or from it over the years has been pretty good.

I do draw the line though at their Defence industry advertising promoting military arms. This advertising comes straight from some of the world’s largest Defence companies producing military weapons including Raytheon, BAE, Lockheed Martin, and ThyssenKrupp.

Our city’s only airport gateway can be more innovative and do much better!

Canberra has more to offer our tourists than that!

Wouldn’t it be nice if there was a bus to the airport? or any semi decent service.
ACT G can’t stand the airport

The Rapid 33 Express service and disabled accessible bus to the airport departs Spence terminus every 15 minutes weekdays and half hour intervals on weekends. It travels through Belconnen and City interchanges. There is also easy to use ticket vending machines at interchanges and the airport for public transport commuters.
The Rapid Route 3 goes to the Majura business park. It departs Spence and travels through Belconnen, the ANU and city interchange.

I think a lot of these problems with canceled and delayed flights can be resolved by looking into the EU rulebook regarding compensation. In the EU when a flight is delayed more than 3 hours, you can claim a set amount of compensation. No flights today due to cancellation? Airline has to find accommodation and meals.
These policies resolved vary similar problems as we have here at the moment

For around three decades I used to fly to and from Canberra most weeks from Sydney for work, always with Qantas as it seemed to have more flights. I was even a Platinum frequent flyer for a year because of other trips as well. However, about ten years ago as Qantas fares increased, reliability dropped, with delayed boardings, cancelled flights and long delays with baggage all contributing to a woeful experience. So now I drive to Canberra, it’s only 3-1/4 hours door to door, and I have the convenience of my own car during my stay..
When you add up the time to get to the airport, the airport wait even if the plane leaves on time, the time in the air, the time on the ground after landing,, even if it is on time, the time waiting for baggage to come out, then the time it takes to get a taxi home, can be in excess of four hours in total, so why on Earth would I fly?.

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