Ignore pandemic problems in setting competition policy, Qantas says
Qantas has warned the federal government not to react to problems caused by the COVID-19 pandemic as it considers setting competition policy in the aviation industry for the next three decades, suggesting closer scrutiny of airports rather than airlines would bring more benefits for consumers.
In its submission to a review instigated by Transport Minister Catherine King, the carrier said it was important the process “does not place undue weight on temporary restart issues that occurred as the industry recovered from the biggest shock it has ever experienced”.
Transport Minister Catherine King released the Albanese government’s aviation green paper in September. Alex Ellinghausen
Qantas did not explicitly oppose calls for an airline ombudsman to monitor complaints, but warned it should be designed with a keen eye on costs and look at all players in the aviation industry. But it resists calls for a compensation scheme similar to that seen in Europe, claiming it would not help with the core issues of on-time performance.
“The Qantas Group considers that the introduction of mandatory compensation would be a backwards step that will do nothing to reduce delays and cancellations, will increase confusion and complaints and materially increase costs, ultimately leading to higher fares and potentially compromising the viability of marginal routes,” the submission reads.
Treasurer Jim Chalmers reinstated the Australian Competition and Consumer Commission’s power to monitor airlines in October. It was in place during the pandemic and after the collapse of Virgin Australia, and the government had initially decided not to have it extended.
But Qantas, in its submission, said airports should also be more tightly regulated. “Airports are a critical part of Australia’s national infrastructure and an increasing cost input to airfares … Sensible, measured reform within the existing light-handed regulatory framework governing airports will help deliver urgently needed benefits to the sector and consumers.”
The Australian Airports Association has said previously that even if airport charges fell by 10 per cent and the saving was fully passed through to consumers, individual airfares would fall by just $1.
Qantas said its recovery from the pandemic was no different to any airline globally, suggesting its COVID-19 flight credits policy “compared favourably to most airlines in the world”. However, it accepted “that customers have not always found it easy to use”.
Qantas said it had undertaken a detailed assessment of complaints and would, by the end of this year, clear backlogged cases, give customers more transparency including the right to review decisions.
The Coalition and some independent parliamentarians have this year raised concerns that the aviation market is too concentrated, without adequate competition. Qantas holds 65 per cent of the domestic aviation market, while Virgin accounts for about 33 per cent.
“Suggestions that the concentrated structure of Australia’s domestic aviation market or a lack of competition are responsible for causing these ongoing operational issues are entirely misplaced and reflect neither the available evidence nor the drivers on airlines to deliver on time performance,” Qantas said in its submission.
In response to calls from the Australian Competition and Consumer Commission to allow foreign carriers to fly on domestic routes, Qantas said the government should stick with its current approach to only agreeing to short-term arrangements on a case-by-case basis.
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