Fels’ successor,Rod Sims,said there was “no doubt” airfares would fall if Qatar was given more access to the Australian market.
“We haven’t really had a good explanation in relation to the whole Qatar issue and that’s unfortunate. When you are taking actions that have the effect – because there’s no doubt they do – of decreasing competition and maintaining higher airfares,you need really clear explanations,” he told ABC radio.
Earlier this week,Assistant Competition Minister Andrew Leigh said the issue of aviation competition would be covered in the green paper rather than the government’s planned inquiry into more general competition issues.
Sims said by focusing on competition in the aviation green paper,the government had increased pressure on itself to make “significant change”.
The terms of reference for the aviation inquiry mean it will focus almost exclusively on domestic issues. International airline agreements such as those covering Qatar are done at a government level rather than by individual airlines.
Issues to be canvassed in the green paper include the dominance of Qantas and Virgin in the domestic market,the effective monopoly powers of major capital city airports and,in the case of Sydney,the arrangements around landing slots.
The federal government is under growing pressure to explain why it rejected a proposal to boost flights by Qatar Airways into Australia.Credit:iStock
The bureaucrat responsible for the long-awaited white paper,Jason Dymowski,resigned from his role earlier this month after the original timeline for the green paper was pushed back. This prompted a fresh round of industry speculation surrounding the government’s commitment to it.
The government has been under pressure from swathes of the aviation and tourism sector to act on recommendations from former Productivity Commission chair Peter Harris,who was engaged in 2020 to deliver a report on Sydney Airport’s slot management scheme.
The slot management issue is expected to be covered in the green paper when it is released.
Harris told a House of Representatives inquiry last month his recommendations would create a more competitive environment for airlines but are yet to be implemented.
Peter Costello and Rod Sims have criticised the government’s refusal to allow Qatar Airways to increase flights to Australia.
In its submission on the white paper’s terms of reference,the ACCC said neither domestic air passengers nor the national economy were being adequately served by the local airline industry.
It said ahead of COVID,growth in the number of air passengers did not keep pace with the population or the economy,flights were increasingly delayed and airfares had gone up. These issues had been repeated after the end of pandemic-related restrictions.
“Some of these outcomes reflect a lack of effective competition. The Qantas Group continues to carry a dominant share of domestic passengers and has a number of advantages over other airlines,” it said.
“The Australian government should consider policy measures to further assist in the promotion of new competition. This includes implementing reforms to the operation of the demand management scheme at Sydney Airport,most relevantly with respect to the way that take-off and landing slots are allocated to airlines.”
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