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Sydney Airport’s CEO has again suggested that airlines hoarding take-off slots is a key reason behind domestic aviation’s stagnating recovery.
Geoff Culbert said his business continues to see evidence of slots “going to waste” with a “potential mismatch between slots held by domestic airlines and the schedule that is flown”.
He made the comments as the airport revealed domestic passenger traffic slipped to just 87 per cent of pre-pandemic figures in July – down from 90.6 per cent the month prior.
Culbert’s latest intervention follows the ACCC in June arguing that larger airlines “can exploit” slot rules to stifle competition from smaller carriers and following similar criticism from both Bonza and Rex.
A slot is a literal time slot that allows an airline to take off at a specific airport at a particular time.
Currently, an airline can hold a time slot at an airport indefinitely as long as it flies it 80 per cent of the time, allowing carriers to cancel up to a fifth and block out rivals from the best times.
The rules are necessary because two aircraft cannot simultaneously take off on the same runway.
It’s led to accusations that major carriers are effectively gaming the system to take advantage, though both Qantas and Virgin have vehemently denied any wrongdoing.
Now, new figures from Sydney show that the international recovery has overtaken the domestic recovery, with a surge of passengers from China boosting international traffic.
“The underlying result on passenger traffic for July is mixed,” said Culbert.
“The headline result for international passengers is encouraging, but it’s a two-speed recovery, with strong growth from China, Korea and India offset by lagging markets like the USA and New Zealand.
“The lag is being driven by a lack of seat capacity rather than a lack of demand. Additionally, seats from the Middle East remain well below pre-COVID levels, down 27 per cent on July 2019.
“The trend with respect to domestic activity has continued, with passenger numbers stagnant over the past 15 months.”
Qantas said last month in response that Sydney Airport has been demonising its “biggest customer” with its slot accusations.
The Flying Kangaroo’s domestic CEO, Andrew David, blamed bad weather and ATC staffing issues for its high cancellation rate in the NSW capital, adding that any suggestion the airline is playing the system is “simply wrong”.
Qantas also claimed that Sydney’s independent slot system manager had returned 99 per cent of its slots in the most recent completed season.
“This says two things: that we use our slots and, when we don’t, we lose them,” Qantas said.
“Sydney Airport is clearly frustrated at airline cancellations because it means lost revenue for them. (It typically means the same for Qantas, as well as significant costs that are paid regardless.)
“It’s worth noting that Qantas (which has its main operational hub in Sydney) has had the highest level of on-time performance of the major domestic airlines for 10 months in a row and the lowest level of cancellations nationally for the past 12 months.”
Domestic CEO David then dismissed accusations that Qantas is hoarding take-off slots as “simply wrong”.
“It’s a use it or lose it system with a buffer for operational issues that you’d expect when you’re getting planes in the sky with all sorts of weather and runway restrictions, and that’s no different from many airports around the world,” he said.
“There does seem to be some misdirected frustration from Sydney Airport because they wish the system was different and they could unlock more revenue. We understand that, but we’re not sure demonising your biggest customer is the way to go about it.
“We’d much prefer to work cooperatively with Sydney Airport on this, especially after what the whole industry has been through over the past few years.”
