Sydney Airport’s CEO has accused Qantas and Virgin of manipulating airport rules in order to block out rivals from launching new routes.
Geoff Culbert suggested the airlines were requesting more take-off slots than they needed before purposefully cancelling them. It follows both Bonza and Rex complaining it was difficult for them to get access to the airport.
Qantas has strongly denied the claims.
Australia’s airport slot system attempts to shield airlines from having to unexpectedly cancel flights as well as increase competition domestically, ensuring no one operator holds a monopoly.
A slot is a literal time slot that allows an airline to take off at a specific airport at a particular time. The controversial rules mean if an airline holds a slot, it can keep it to itself if uses it for 80 per cent of the time.
However, this means an airline can cancel one in five services and still effectively block out rivals.
According to Culbert, Qantas last season filed for 106 per cent of its pre-pandemic capacity, while Virgin filed for 95 per cent. This has left other airlines shut out of the slot booking process.
“The actual number of flights flown will be significantly lower than that because of the cancellation rates on the Sydney-Melbourne route,” he told The Australian.
“They’re running at about 10 per cent, (whereas) the national cancellation rate is 3.9 per cent, so all the data indicates there is over-filing and that does prevent airlines from getting access to Sydney Airport.”
Culbert’s broadside comes as 2.4 million people are expected to pass through Sydney Airport’s gates over the Easter season from 3 to 23 April, including 1.5 million domestic and 850,000 international passengers.
This has the potential to squeeze airport capacity, as regulations have imposed an 11pm-6am curfew and prevented exceeding more than 80 flights in any given hour.
Culbert has called on the government to go ahead with a proposed management review, which is currently waiting on an official response.
Qantas has swatted back the accusations of “slot hoarding”, blaming in its own submission external factors such as inclement weather and air traffic control shortages for the high cancellation rates.
“Qantas is utilising its slots in accordance with the rule and strongly denies suggestions of impropriety,” the Flying Kangaroo said.
The situation is further complicated because the slot rules were hugely relaxed during COVID-19 as lockdowns and border closures caused hundreds of cancellations, but have since been criticised by both Rex and Bonza as stifling their ability to run services at the most popular times.
In March 2022, an ACCC report said, “At capacity-constrained Sydney Airport, new and expanding airlines can find it very difficult to obtain slots at peak periods, which in turn acts as a barrier to competition. As discussed above, new airline Bonza said that the lack of access to slots was one of the reasons why Sydney was not included in its initial route network.
“Rex is also looking for permanent access to peak period slots to support its expansion into intercity jet services.
“Waivers from slot usage requirements have enabled international airlines to retain their slots despite minimal or no flying, which will facilitate their return as demand for international travel grows.
“However, the waivers may also have delayed domestic airlines getting permanent access to slots held by certain international airlines that will ultimately decide not to recommence services in and out of Australia.
“The ACCC is engaging with government on reforms to the demand management scheme at Sydney Airport. In particular, we consider that historic precedence to slot allocations should not be used to protect incumbent airlines from competition.”
It concluded the rules could potentially act as a “key barrier to entry and expansion for airlines”.
The slot rules were ironically introduced by Rex deputy chairman John Sharp when he was transport minister. He has told Australian Aviation he now thinks the rules are outdated and are in need of an overhaul.