Australian Senate Says Qatar Decision Must Be Reviewed Immediately

After five weeks of deliberations and public hearings, the Australian Senate committee investigating commercial aviation delivered its report today. The 137-page report contained ten recommendations to the Australian Federal Government covering issues as diverse as Qatar’s application for more services, anti-competitive behavior, Sydney Airport slots and extending the inquiry so that former Qantas CEO Alan Joyce and Transport Minister Catherine King can appear.

Photo: Qatar Airways

Perhaps Qatar will get more flights after all

The hot topic has been the government’s decision to reject the request from Qatar Airways to operate an extra 28 flights per week to Australia. The report recommended that the Australian Government “immediately review its decision not to increase capacity under Australia’s bilateral air services agreement with Qatar.” Recommendation 2 said:

“The committee recommends that when making decisions relating to bilateral air service agreements, the Australian Government have regard to a cost benefit analysis, consult widely with key stakeholders including the Australian Competition and Consumer Commission and publish a statement of reasons for decisions taken.”

The inquiry had heard from competition and travel experts that allowing the extra Qatar flights would have added up to AU$1 billion ($666 million) a year to the Australian economy and cut the current high airfares. Transport officials told the committee that only Qantas and Virgin Australia were consulted before they sent their advice to the Minister. Qatar executive Matt Raos said the airline was surprised and shocked when it learned of the decision.

Photo: Preston Fiedler | Simple Flying

Committee Chair Senator Bridget McKenzie said the evidence supports the conclusion that the Government rejected Qatar Airways request because of interventions by former Qantas CEO Alan Joyce, who was also responsible for Qantas supporting the Prime Minister’s referendum on the Voice, at shareholders and customers expense. The senator added:

“Unfortunately, the Government sought to prevent the committee from fully investigating the reasons why additional Qatar Airways flights were rejected by refusing to release documents and placing a gag on the infrastructure and foreign affairs departments.”

McKenzie also said it was apparent that at a time of a cost-of-living crisis, the government made decisions that protected Qantas’ market share and kept airfares higher for families and exporters and delayed making critical decisions to improve the reliability of domestic travel, especially in Sydney Airport.

Will anything come of this?

The issue of slot-hoarding by Qantas and Virgin Australia at Sydney Airport also caused much debate, with submissions from both Bonza and Rex highlighting the lack of airport access while airlines continue to cancel flights but retain slots.

Other recommendations called for reinstating quarterly airline monitoring reports and an ACCC inquiry into anti-competitive behavior in the domestic aviation market. The committee also called for divestiture powers to be available if an airline abuses its market power and that consumer protection reforms be implemented for situations like significant delays, cancelations, lost baggage and “the devaluation of loyalty programs.”

Photo: Omid Behzadpour | Shutterstock

With Alan Joyce holidaying overseas and Minister King not turning up, the report recommended the committee be reappointed so it may receive evidence from witnesses who were unavailable. It specifically named Alan Joyce and noted that the Qantas answers to questions on notice were unsatisfactory.

It also wants Minister King to attend and provide evidence at a public hearing, although that seems unlikely given she labeled the inquiry a political stunt from the Coalition that did none of the things it wants the current government to do.

There were five public hearings and the committee received 147 written submissions, including more than 100 from individuals who raised issues with the Qantas frequent flyer program. It is all in the publicly available report that came out this afternoon and there are many well-reasoned arguments and ideas from the public and industry experts on how Australian aviation can be improved.

Apart from Qatar Airways probably being granted more flights, it’s hard to see what, if anything, will come from it, apart from more headlines tomorrow.