The ACCC has argued the way Sydney Airport allocates slots is preventing new airlines from entering the domestic market.
In its submission to a senate enquiry examining the future of Australia’s aviation sector, the competition commission highlighted that pre-pandemic, Qantas and Virgin operated as an effective “duopoly”.
Under existing rules, slots can sometimes be allocated to an airline indefinitely, making it difficult for new challengers to enter the market.
“Access to slots at Sydney Airport is a key barrier to entry and expansion in Australian air passenger services,” said the organisation in its submission.
Slot access is becoming a global issue again as the aviation industry seeks to exit COVID and regrow networks.
Many rules, which dictate an airline must operate a certain number of flights to keep the slot, have been suspended, despite budget airlines arguing they should have access.
“We oppose the extension of slot waivers into summer 2021 because this will lead to fewer flights and higher fares for consumers,” a Ryanair spokeswoman said in November. “Legacy airlines at hub airports will have no incentives to operate flights. Slot waivers distort competition by preventing low-fare airlines from expanding while legacy carriers are able to reduce capacity and raise prices.”
More generally, the ACCC has been active during the pandemic, with Treasurer Josh Frydenberg instructing the organisation in June to monitor whether airlines are reintroducing capacity too quickly purely to damage rivals.
The commission was tasked with looking for “early signs of damage” or moves that could “damage a competitor or drive them off route”.