Monique Ryan (Kooyong, Independent) Share this | Hansard source

The Sydney Airport Demand Management Amendment Act and associated legislative instruments establish a framework for the management of air traffic demand at Sydney Airport. The act and its regulations and schemes set a limit of 80 aircraft movements per hour at the airport, provide for a slot management scheme and guarantee access to regional services. The framework was initially introduced largely to address community concerns about aircraft noise and the capacity of the airport. The limit on aircraft operations at Sydney Airport was established to reduce the impact of noise on residents under flight paths.

The slot management scheme gives airlines protected times for landing and take off at Sydney Airport. Slots allocated under the system permit a specified aircraft movement at a specified time on a specified date. All commercial and private aircraft require a slot to land or take off at Sydney Airport. The scheme has not functioned as intended. The Productivity Commission in 2019 and the Harris review in 2021 identified significant deficiencies in the scheme. Firstly, it hasn't kept pace with increasing competition for slots. Aviation industry stakeholders have long called for reforms to address the efficient use of slots, particularly regarding the curfew at the airport, the movement cap, and the issues with regional access.

Achieving a balance between certainty of slots for existing airlines and encouraging competition from new entrants is a key challenge of the scheme. The concept of historical precedence has been problematic. It's fundamental to the allocation of slots. Essentially, if you have one, you keep it unless you misuse the scheme by flouting the 80-20 rule. That rule requires the airline to satisfy the relevant gate requirements for at least 80 per cent of the slots allocated to it. So airlines can keep these slots indefinitely as long as they operate the slot as they're supposed to at least 80 per cent of the time.

This is a system that favours incumbency. When an existing carrier seeks to change its slots, those changes are prioritised before new entrants. This effectively restricts competition for those new entrants trying to gain access to the market. Removal of that fact was recommended by the 2021 Harris review but is not included in this legislation. There is also an issue with the scheme's definition of a 'new entrant'. At present, following the allocation of slots based on historical precedence, the slot manager is supposed to make sure new entrants get fair access to any remaining slots, but how new entrants are defined remains problematic and, again, has not been addressed by this legislation.

There are some important reforms covered by this bill. They include a requirement for additional reporting by airlines and by the slot manager on how slots are allocated and used. There is a provision for a temporary increase in the number of movements allowed immediately after significant or sustained disruptions to air traffic. That is a sensible change. It will enable the airlines to catch up after disruptions and prevent unnecessary diversions to other airports.

But it has been suggested by experts in the industry that these changes are too limited in their scope and their length and they still don't override the curfew at the Sydney airport. The minister can extend those recovery periods, but the process for this, it has been suggested, is unnecessarily cumbersome. The bill introduces a range of new civil penalties and reporting requirements to deter the problem of slot hoarding. We have this existing allocation of slots based on historical precedence and this slot hoarding 'use it or lose it' test, which requires that airlines use at least 80 per cent of their allocated slots. If they don't, they can lose that historical precedence. But there have been suggestions, including by the administrators of Sydney airport, that both Qantas and Virgin have repeatedly taken more slots than they intend to use in order to block other airlines from gaining fair access to Sydney airport. The airlines then spread their flight cancellations across slots to make sure that each slot is used at least 80 per cent of the time and they can maintain that historical precedence. Both Virgin and Qantas have denied engaging in slot hoarding, but there have been many suggestions that it is, in fact, one of their preferred modus operandi.

There have also been many concerns in recent years regarding the lack of competition between airlines in this country, not just anticompetitive behaviour, like slot hoarding, but the effect of the regulatory restrictions that we see on competition in this country in both the domestic and international aviation airline markets. This has also been exacerbated by the Albanese government's 2023 decision to reject additional international flights by Qatar Airways into Australian capital cities. Of particular concern was the impact on competition in the domestic industry from the 2024 collapse of Bonza and Rex. At that time, access to slots was specifically raised by Rex as a significant barrier to its commercial competitiveness.

The minister announced measures to stop this slot hoarding earlier this year, in February, but they have not worked. The most recent data that we have suggests that cancellation rates on the Sydney-Melbourne route remain very poor. In September 2024, Jetstar cancelled 9.9 per cent of its flights, Virgin cancelled 9.3 per cent and Qantas was the best of a very bad bunch with 7.4 per cent cancellations. The airlines would have us believe that these cancellations are unavoidable, due to bad weather or a lack of air traffic controllers, but in that month of September 2024 on 17 days there were no weather or air traffic issues but still 184 cancellations. In what industry is it considered acceptable to cancel up to one in five services? The fact is that the 80-20 rule continues to actively incentivise slot hoarding. As long as it remains in place, slot hoarding will continue and Australian consumers will continue to pay the price.

This bill fails to address a number of the significant reforms which were put on the table by reviews of the Productivity Commission, the Harris review and the government's own aviation white paper. It doesn't increase flexibility for the slot manager to re-time slots or give airlines greater flexibility to use different sized aircraft. It doesn't adopt the suggested international definition of 'new entrants' or the internationally adopted definition of 'slot misuse'. It doesn't change how the hourly movement cap is actioned. Those reforms, which would likely lower prices and increase choice for consumers and give efficiency benefits for airlines and airports, are expected to be included in the slot management system but that is not in this legislation and we will almost certainly not see them in this term of parliament. I believe the potential effectiveness of this legislation has been overstated by the government, which has provided a flawed impact analysis that's based on the assumption all the reforms suggested in the aviation white paper would be adopted, which, as I have already covered, is not the case.

I'd like to point out as well that Australian travellers are still, every day, dealing with constant failures in customer service in the aviation industry. While other industries have a dedicated ombudsman to deal with customer complaints, the airlines have the Airline Customer Advocate, which is funded by the airlines. In 2021 the Airline Customer Advocate was described as a 'glorified post box' and awarded a Shonky Award by CHOICE. The aviation business in this country is big enough and valuable enough to the people of Australia to have its own ombudsman. I ask why the government has not enacted this important suggestion which has been made by a number of independent experts including, most recently, the chair of the ACCC. This week, the Airline Customer Advocate released its 2022 scorecard for the airlines, which I think is a fair demonstration of the timeliness of its responsiveness to the need for feedback on consumer services. The timing of that 2022 report—we're receiving it in November 2024—reflects the effectiveness of the authority. Unsurprisingly, the Airline Customer Advocate basically gave the airlines a fail for 2022. It's very clear that we need an ombudsman to oversee this industry more effectively.

I have also called repeatedly in the last 2½ years for a compensation scheme for the industry. Between grumbling airports and the behaviour of the airlines, Australian passengers need to have somebody on their side. When a flight is delayed by more than three hours in the EU, every passenger receives $415 on top of a full refund. In Canada, it's Can$400; in the US, it's US$100. Australian air travellers are disadvantaged by some of the worst customer protections in the Western world. When our flights are delayed or cancelled, we count ourselves lucky to receive a $20 meal voucher. While the airlines will point out that their on-time performance has improved significantly since 2022, poor service levels remain a really touchy subject for Australian travellers. Just how committed Qantas, Jetstar and Virgin are to delivering good service to their customers will be very severely tested as the Christmas holiday season rolls in.

We've heard time and time again in this place in the last 2½ years that we have an increasing number of industries dominated by one or two firms which essentially represent duopolies. We all know that we have to ensure that the balance is right between business profits and consumer rights and protections. We do not have that in the Australian aviation industry. We need a new robust set of consumer laws for air travellers to be overseen by an airline ombudsman. That would shift the burden of proof back onto the airlines, and it would create a powerful incentive for the airlines to reduce their delays and cancellations more effectively than they currently do.

I will continue to push hard for change in the airline industry not just for the implementation of the other remaining recommendations of the Harris review but also for an aviation industry ombudsman and a mandatory compensation scheme. With cost-of-living pressures continuing to hurt everyone in this country, these would be simple measures to take to make sure that the airlines aren't taking us for the worst kind of ride.

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