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Rex has accused Qantas of “hoarding” the most lucrative take-off time slots at airports, leaving smaller carriers with the “crumbs” of less popular times.
The airline’s deputy chairman, John Sharp, told The Guardian it was “as plain as the nose on your face” that the Flying Kangaroo was “cancelling sufficient flights to remain within the 80-20 rule”.
It comes after the ACCC on Monday argued that larger airlines “can exploit” the rules to stifle competition from smaller carriers, while Sydney Airport agreed the nationwide system doesn’t work. Qantas has strongly denied any wrongdoing.
Currently, an airline can hold a timeslot at an airport indefinitely as long as it flies it 80 per cent of the time – allowing carriers to cancel up to a fifth of flights and maintain a monopoly on the most in-demand times.
It’s led to accusations from critics that airlines take slots they don’t actually need because there is a huge buffer to cancel so many of them, forever blocking out rivals.
“We certainly have struggled to get slots at Sydney Airport in order to enable us to compete on the major routes, and as a consequence, we don’t get the best slots. We have to use the crumbs that are left on the table,” said Sharp.
“It does require immediate attention because it’s holding back competition in the airline market space, resulting in air fares being higher than they ought to be and services not as good as they should be.”
Sharp himself introduced the rule as a minister in the Howard government but has since repeatedly spoken of his great regret in doing so.
“We shouldn’t have been so generous with the 80–20 split. It should have been 90–10. Or we should have put an audit process in place to make sure airlines were only cancelling flights within a slot for legitimate reasons or reasons related to something beyond their control. So that’s a mistake we made at that time,” he told Australian Aviation last year.
Rex is not the only airline to be demanding action on the slot system, with Bonza CEO Tim Jordan telling the Australian Aviation Podcast this week that you “have to question why” the cancellation rate at Sydney is three or four times higher than in the rest of the country, and that the system is an impediment to competitive growth in the domestic market.
“We’ve just gone through, in mid to late 2022, the worst on-time performance in the history of Australian aviation,” Jordan said.
“Based on the existing rules, no carrier has been forced to my knowledge, to have given up any slots at Sydney, which probably tells you the current system doesn’t work as envisaged.”
The ACCC warned this week that Sydney slots are open to hoarding by larger airlines – a stance backed by the airport itself, which doesn’t make the rules.
“Rules allowing airlines to retain slots in perpetuity exacerbates capacity constraints by limiting the opportunities for new or expanding airlines to acquire slots needed to launch new services and compete,” the competition watchdog said.
In a 2020 submission to the Sydney Airport Demand Management (SADM) Discussion Paper, Qantas said it was using its slots in accordance with the 80-20 rule and “strongly denied suggestions of impropriety”.
“Where cancellations occur, they are primarily due to factors outside the airline’s control. These include weather events such as fog, storms and wind (at Sydney Airport, as well as other airports, e.g. Brisbane and Melbourne, which has a flow on effect to Sydney Airport) and operational cancellations, such as unscheduled engineering events resulting in Aircraft on Ground (AOG),” the airline wrote.
