Consumer and labour protections

One of the headline areas of the white paper is consumer protection, with the government leaning hard into ideas such as an Aviation Industry Ombuds Scheme and an aviation customer rights charter.

The ombuds scheme will replace the current industry-funded Airline Customer Advocate, which is widely regarded as toothless and ineffectual, with an independent ombudsman who will deliver “accessible, independent, fair and accountable” dispute resolution, as well as direct airlines and airports on consumer remedies; issue guidance on obligations to customers; report on airline and airport conduct; and refer misconduct in the sector for investigation under the Competition and Consumer Act 2010.

According to Bennett, it was “totally understandable” that consumer rights would be a focus for the white paper after the widely-publicised customer service failures in the first few years post-COVID-19.

“This is an ongoing challenge, and we knew that, and we put in our white paper submission that the Airline Customer Advocate, that role needed to be strengthened,” Bennett said. “The government’s obviously decided that an ombudsman-type role is required, and we’ll engage very constructively with that process to make sure that we can deliver the outcome. The one element we would say with that is probably that it involves airlines, airports, and we personally would think Airservices should be in that broader scope as well, because all three, the Holy Trinity, are what ultimately will deliver great results, and if we’re all doing a great job, then that should be celebrated through that process.”

While McMillan was pleased with the consumer protection measures, she was far less impressed with the white paper on the issue of worker protection, saying that “full time, secure, well-paid, safe jobs in aviation” are needed to deliver good customer service.

“I think we’ve been crying out for a long-term study, examination, consultation around where our aviation industry is going, and I’m really pleased that the government is tackling that,” she said. “I think it’s an incredibly difficult task based on particularly what we’ve seen in the last five years, but really as to where aviation is at as an industry, and the challenging questions we’re asking ourselves around that, I think there’s elements of importance in there.

“Does the balance work from a union perspective? I’ll be honest, no, because we are lacking that labour standards and protections element in this report at this point. Yes, it’s talking about deliverables, but for us, there is a hole in can you talk about deliverables without having an honest conversation around labour standards? Or, more importantly, where that workforce is going to come from, what our expectations are going to be for workforce into the future, and where we go to from there.”

Though there are workforce measures in the white paper, they largely focus on future needs – streamlining training and accreditation for licenced aircraft maintenance engineers (LAMEs), pushing for large airlines to focus on recruiting newly-qualified pilots, and addressing skills shortages rather than protecting existing jobs.

“We’re in conversations with [Transport] Minister [Catherine] King’s office, but also [Employment] Minister [Murray] Watt’s office now looking at industrial relations, and I think they’ve said, ’well, we’ll look at it from a transport infrastructure perspective, and we’ll leave industrial relations reform to the other minister’,” said McMillan. “And we’ve just seen a whole lot of reform come through. There’s improvements – we’ve seen closing the loopholes legislation come through an industrial relations space, and that does a little to rectify a lot of the issues that we saw around outsourcing and an attack on aviation jobs over the last 15 years in particular, and we can start to look at some things like multi-employer bargaining that we’re talking about in ground services.

“So, there’s elements to start bringing up pay and conditions, but at the rate we’re going, it’s going to take a long, long time to do that. I don’t think it’s enough to say you can look at all these elements without looking at ongoing industrial relations reform, which is why we’ve consistently been calling out to the government and industry to say we want a Safe and Secure Skies Commission where we can actually look at the genuine issue of labour conditions in aviation and how we have better protections.”

Promoting competition

Competition in the aviation sector has been in the spotlight for some time – but particularly over the last year, which has seen a return to the domestic duopoly of Qantas and Virgin Australia following the respective collapses of Bonza and Rex. The white paper contains measures to promote domestic competition, with an eye to improving on-time performance and lowering domestic airfares.

Sydney Airport’s take-off slot regime will be overhauled, with the government adopting recommendations from the 2021 Review of the Sydney Airport Demand Management Scheme (Harris Review) to boost operational efficiency, add transparency around slot allocation, and “rebalance” the system to benefit new entrants; additionally, among other measures, aeronautical pricing negotiations between airports and airlines will see revised principles, the Productivity Commission will look into whether airports are misusing their market power, and the ACCC will continue to monitor domestic airline prices and performance with possible enhancements to the regime in the future.

In Bennett’s opinion, the government had threaded the needle on a “difficult issue, probably through an appropriate middle course”.

“We would have liked to have seen some more, particularly with respect to the airports and the nature of the negotiating environment between monopoly airports and the airlines,” he said. “It’s our third largest cost item, and that obviously gets reflected in airfares and ticket prices. We have argued the case that there needs to be a negotiate/arbitrate model, so that when reasonable negotiations break down, there is a way to be able to move forward with an independent form of arbitration. In our recent world, where we were confronted by just a proposed increase that we couldn’t possibly digest, to then find you don’t have access to air bridges – it’s just not cool.

“It is encouraging to see that the government has given the ACCC some extended and enhanced powers in this regard and suggested to the Productivity Commission that they’re to reconsider this issue – we welcome that, and we hope that both those bodies continue to play and will play a very valuable role in moving that agenda forward.”

Bennett also highlighted commentary from former ACCC chair Rod Sims about the slot management at Sydney Airport, which is administered by an industry-funded body, Airport Coordination Australia, as “particularly unhelpful”. The management has since been put out to tender.

“We have always supported a transparent approach to slot management at Sydney when the government announced its reforms and through the Harris review process in February this year, we welcomed those, we supported those,” he said. “We think there’s been some pretty unhelpful commentary bandied around at times about the way in which the slot process works, and people’s access to slots – Bonza never applied for Sydney slots, Rex gave some slots back because they didn’t have enough aircraft. Rex actually has as many, if not more, slots per aircraft than we do at Sydney Airport, and a similar number of slots in peak hours on a percentage basis.

“The ownership has absolutely zero to do with the day-to-day management of those slots, absolutely zero. It is a perception that doesn’t look good, we agree, we’d happily step out of it – this was a process that was put in in place, I think, when, actually, Mr Harris was secretary of the transport department at the time. It’s got Sydney Airport on the board, it’s got the [Regional Aviation Association of Australia] on the board, as well as Qantas and ourselves.

“There has, unfortunately, been a lot of noise around this, which I think has created a perception that is not accurate – but it is important that there is a transparent and credible process in place, and that the perception of that is strong. We’ll work very constructively with the government to make sure that slot management does not continue to be seen as an issue when we would argue there are arguably bigger issues alive in the competitive landscape, in Australian aviation.”

McMillan hailed the competition reforms as an “incredibly positive start” but noted that the government needs to examine how regulation can help keep the sector balanced without allowing too much power to accrue in one set of hands or another.

“I think we need, obviously, healthy competition in the aviation industry, but is the balance where we need it to be at the moment?” she asked. “We’ve seen Virgin, in particular, put under huge amount of pressure over the last five years, in light of the context of what’s happened to Rex in recent months, what’s happened to Bonza in recent months, what’s happened to a whole lot of third party employers that are struggling as well. We’re just watching, as we speak right now, another set of huge eye-watering profits come out of Qantas.

“Is the balance right in who has control, what level of regulation we have, freedom to have competition – but also security and protection to ensure that you can make the adjustments to have the best service, that you’re not under pressure to be able to deliver that? Where are we sitting at the moment, with our airports compared to our airlines, compared to those other services, and particularly with new entrants coming into that space as well?”

Ultimately, a major hope from the aviation sector as a whole is that the measures in the white paper will bring back trust from the community.

“We’re really keen to see an outcome that restores trust, community trust in the state of Australia’s aviation sector. It can indeed continue to play this critical role in Australia’s way of life,” Bennett said. “This is such an important industry for Australia. We think the government has done a good job at navigating its way through a difficult set of issues, and we’re just going to engage constructively to bring to life the changes that help people have the confidence that they should have, and the safety that must be paramount, in the Australian aviation sector.”

A path to 2030 for drones and advanced air mobility

With Airservices estimating Australia could see 60 million drone flights per year by 2043, drones and advanced air mobility – air taxis and similar industries – were another focus point for the white paper. Among other measures, the government said it would release an AAM strategy this year, as well as look to increase national regulatory consistency for the sector, introduce Remote ID requirements for drones, improve safety and security, and work to implement Flight Information Management System (FIMS) allowing air traffic management to communicate electronically with drones and other unmanned aircraft.

Speaking on the Australian Aviation Summit’s White Paper panel, Jesse Suskin from Alphabet-owned drone delivery service Wing – which launched in Melbourne this year after previous launches in Logan and Canberra – said he was hopeful seeing that the government is paying more attention to the emerging sector.

“We’re really thrilled the government’s recognised this growing industry and the potential for it because it’s regulated,” he said. “We’d also encourage the government to fund these agencies appropriately. CASA is a great example. They have some of the world leading people in the drone safety space right there in CASA. They need more. So, we would encourage the funding to follow some of the policy ideas, but overall, we’re very pleased with what we’ve seen.

“With a focus on the drone space, at least for us, we were really pleased to see the government, at least acknowledging this and thinking about this in what’s largely a traditional aviation paper. So, it gives a lot of confidence, I think, to a company like ours or others in industry that they’re looking at what the policy issues, both not only in safety or aerospace, but even beyond, and what we’ll be experiencing and looking at in Australia as more services like ours start to scale up.

“We think they tackled the right issues. We think they looked at the right topics, a bit of a big timeline to get there, but that’s not necessarily bad in a world in which technology is changing, in which the ways people are using airspace is changing, so we were pleased with it. We thought they did a great job of consultation, too – we think the Department reached out, again, not just to that traditional aviation space; they did a good job of reaching those in the emerging technology sector who will be in the air soon enough.”

Suskin does have some areas of concern, however, with Airservices “creeping a little bit” into the drone space – for example, with its Flight Information Management System (FIMS) project.

“This paper has kind of opened up that conversation to be more broad on that point, but in terms of areas of concern, the Airservices FIMS piece, it is more contained in discussion in the paper, which we think is helpful. I think it’s a reflection of the department doing good consultation, that they are trying to box that in a bit, but like the traditional operators or others who might have concerns with Airservices, we certainly do too worry about them coming into uncontrolled space with services that might not be helpful for drone operators.”

For Suskin, establishing and strengthening the “social licence” for drones and AAM is key, and measures like Remote ID will assist with this.

“I think it’s important for industry to describe why we are safe. I think it’s important for the safety agencies to have a great understanding of the technology so they can regulate us again, at the same level they might other traditional modes of transportation or aviation,” he said.

“I do think, though, because it’s highly automated, it’s very digitised, there will be safety levels and standards in there that are pretty high and solid. Remote ID is another area that was spoken about in the paper that will speak to that: the government has said by 2030 there will be remote ID in Australia. Remote ID is a way in which a government agency can identify all of the drones in the air. Already commercial drones are registered, we register with CASA – so this will be the next step, and you have all the licence plates now, you’ll know where they are in the world.

“I think it’s important for industry to help facilitate things like that, to answer those questions about security as an example. So having that conversation is now is great. There’s not so much activity right now where that’s required today, but we’re going to get there. Remote ID was one of those areas where it actually helps on social license – if people know where the drones are, it helps the security agencies to know exactly where the drones are, who has registered that drone, who is operating that drone.

“I think overall, these are good steps and good policy steps in that pathway to 2030, the timeline they put out in the paper, where this will actually become more of a practical, actual and legislated reality.”