What next for aviation after Labor’s election landslide?

By far the biggest question mark over Australia’s aviation sector for the better part of a year has been the future of Rex, which collapsed into administration last July following its ill-fated attempt to compete with Qantas and Virgin in the domestic jet market. At time of writing, the administrator, EY Australia, is still looking for a private buyer to take over the airline – but if that fails, the Albanese government pledged before the election it would look into taking over Rex itself and preserving its essential regional routes, a policy likely to continue into this term.

The government has been helping prop Rex up since its collapse to the tune of more than $100 million – including an $80 million line of credit; a guarantee that Rex regional passengers will “fly or get their money back”; preservation of its crucial slots at Sydney Airport; and, perhaps most significantly, the buyout of $50 million of the company’s debt from foreign financier PAG, making the government Rex’s largest creditor and paving the way for any future nationalisation project.

“From the first principles of policy – what the government wants to do is keep routes in regional aviation,” Transport Minister Catherine King told the ABC’s Patricia Karvelas in February. “We want to keep them flying and we want to make sure they’re viable, not just in the short term but in the longer term as well. Which is why we think the second sale process won’t be successful without government support, and that’s why we’ve got this process now in place.

“We’re saying that [there should be a commercial solution], but we’re also saying that if there isn’t, we are saying that we will start the process to consider if government should acquire it. We’ll need to do that with states and territories as partners, they subsidise a lot of these routes currently, and we’ll need to start the process for that as the buyer of last resort.”

If a buyer for Rex is found – or if the government bites the bullet and makes it the first nationalised airline in Australia since the sell-off of Qantas in the mid-1990s – then one major obstacle the new owner will face is its aging fleet of 57 Saab 340Bs, around half of which are out of commission, with new parts increasingly hard to come by.

“The biggest barrier for a sale of this airline at the moment has been that the planes are old and it is highly capital intensive to replace them,” said Minister King. “We will have to look at what someone is bringing to the table and what is the best value for taxpayer money, where we’re we going to be able to keep as many of the routes going as possible – I want to keep all of them going if we can.

“Every state wants to keep regional aviation going. Rex flies everywhere. There’s more than 40 different routes that are flown weekly. Almost half of those are routes where they’re the only airline that actually flies in, and that’s pretty critical to getting people in regional communities to medical appointments, to their homes, to keep businesses going, to get FIFO workers in. It’s a pretty important piece of economic infrastructure for our regions.”

Consumer protections

In its White Paper last year, the government flagged consumer rights as a key area of focus, including the adoption of a new “Charter of Customer Rights” and the replacement of the industry-funded Airline Consumer Advocate – widely regarded as a toothless tiger – with a new independent ombuds scheme to handle customer complaints.

“We know the travelling public has not been happy with the services that they are getting both from our airlines and from our airports, and we want to improve the circumstances,” said Transport Minister King at a press conference announcing the draft Charter last December. “Customers should get what they pay for or they should get a refund. This Charter of Rights, which is out for consultation now, spells out very clearly what the flying public can expect. If they have flight cancellations, they should expect, at no cost of their own, to either be rebooked on that airline or another airline, or they should get a refund within 14 days.”

“We also know that people should – if they are stuck away from their home, away from the where they actually live – that they should also get access to accommodation and food to be able to stay overnight then go onto their travels. This is the first time we’ve had a consumer rights [charter] for the air travelling public and it’s part of the reforms that we have of trying to make sure customers actually get what they pay for or get a refund.”

The charter has been the subject of much back-and-forth, however, with some corners – like consumer advocacy groups – arguing it doesn’t go far enough, while others – like the Regional Aviation Association of Australia – arguing it goes too far in lumping all airlines together in a “one-size-fits-all” policy regardless of their individual circumstances. Speaking to the Australian Aviation Podcast, “Consumer Champion” Adam Glezer said there needs to be consumer protections with more teeth – potentially including an EU-style compensation scheme, which has been championed by Opposition transport spokesperson Senator Bridget McKenzie.

“How small can steps be? Maybe a small step for my six-year-old,” he said. “What are the fundamental changes? What are we going to be changing? Is it just going to be the [Australian Consumer Law] as it is that’s enforced? Because it’s a waste of taxpayer dollars unless we have legislated change that actually protects consumers. What is an ombudsperson going to do? The Airline Consumer Advocate, it’s a known fact how useful they were, but they were funded by the airlines for goodness’ sake.

“There are two main things that consumers care about more than anything: safety is number one, but you’ve [also] got the right to a refund for all cancellations, and compensation. If neither of them are even getting a look-in, could you possibly answer what the point of having this charter is? Mixed in with the fact that we’ve got no real law changes of substance that have been put on the table. I mean, can you see any point of having it there to enforce the current consumer law if the main issues aren’t being addressed?”

An inquiry into “pay-on-delay” laws in the previous Parliament saw little traction – but if Senator McKenzie keeps her portfolio in Opposition, expect her to once again look into renewing the charge.

Western Sydney International Airport

Sydney’s second international gateway, Western Sydney International (WSI), is slated to open at the end of 2026, with QantasLink, Jetstar, and Singapore Airlines having already signed on. In its last term, the Albanese government was a strong backer of the airport and its surrounding infrastructure, including the new Bradfield “aerotropolis”, the M12 motorway, and the metro line that will connect it with the Sydney Trains network at St Marys in the north; the government also pledged $1 billion to secure rail corridors to the south of Bradfield for future connections to Leppington and Macarthur, a plan which will now likely go ahead.

“This is the next practical step in safeguarding the future and ensuring we are well positioned to deliver the infrastructure that communities across South West Sydney need to connect people with the jobs of the future and with each other, and connectivity is at the centre of it all,” Prime Minister Anthony Albanese said at the Western Sydney Leadership Dialogue’s airport city summit in March.

While it will be curfew-free, one big question about WSI’s future concerns its designation as a “primary gateway”, a status it will share with Sydney, Melbourne, Brisbane, and Perth Airports. As a primary gateway, it would be subject to the same restrictions as the other large airports under Australia’s bilateral air service agreements – meaning carriers like Qatar Airways would face a cap on the number of weekly flights they can operate to Western Sydney. The PM at the March summit did not say whether WSI’s status would be changed, though a review is planned for 12 months into its operation in 2027.

“We will have competition – that’s in the interests of consumers. It’s in the interests of people of Western Sydney, and indeed in the interests of Australians across the board,” he said. “The reason why Qantas and Singapore have chosen to do the deal and come to Western Sydney early is because they’re smart. First mover advantage. You have a 12-month period where, because of competition, they have to be on the level playing field, and that’s been in place for some time.”

The airport will also be government-owned and operated, in contrast to the privately owned Sydney (Kingsford Smith) Airport in the east, which the PM said is important for its future.

“I argued very strongly for government ownership of Western Sydney Airport,” he said. “I advocated that because if you had Sydney Airport and Western Sydney Airport with the same ownership structures, it’s pretty obvious that you could just bleed one of the assets. Effectively, you wouldn’t get that competition and that engagement and that investment in Western Sydney Airport.”

Melbourne’s rail link

The re-election of the Albanese government will mean a “steady-as-she-goes” approach for Melbourne Airport’s long-delayed rail link, scuppering the Coalition’s proposal to rip $2.2 billion in federal funding out of the Suburban Rail Loop and tip $1.5 billion of it into the airport rail – though given that the Coalition had also planned to slash $2 billion in federal funds from upgrades to Sunshine station, which is where the rail link meets the rest of Melbourne’s suburban network, this may not be a significant loss.

While we won’t see the rail link open in the next three years, it had a major breakthrough in Labor’s first term when the Victorian government and Melbourne Airport came to an agreement over the line’s construction, thanks in part to a mediator dispatched by the Commonwealth to end the stand-off. Following his recommendations, the airport dropped its demand for an underground station and agreed to the state government’s preferred above-ground model. Planning works have since begun on the necessary upgrades to Sunshine, and the airport signed a memorandum of understanding on the project with both state and federal governments in March.

“I think that this is important that we all work together in good faith,” Minister King said at a press conference in March. “There are outstanding issues that the airport has, outstanding issues that the Victorian government have. The Commonwealth has got interest in this as well. We want to work together to get this done, and I think we want to make sure it happens.

“Obviously, the Sunshine work is starting, that planning work, we announced that earlier. The Victorian government has put the money into that. We’re putting $2 billion into the construction. All of that is happening. There was already significant work done on Melbourne Airport rail by the Victorian government previously. So all of those services that needed moving, all of that has already been done.”

As currently planned, the airport rail link will have three stations: the interchange at Sunshine, a new station serving Keilor East and the Airport West precinct, and the airport itself. Passengers will be able to travel straight through from the airport to the city.

“We are very excited to keep this project moving and make sure that this project becomes a reality for the Victorians who deserve a train to the airport,” said Melbourne Airport CEO Lorie Argus in March. “And of course, in line with our third runway approval and the work and growth that we plan for Victoria, those transport solutions are very important for our growth, 76 million passengers by 2046. This is a really welcome announcement, and I’m very excited to see this project come to fruition along with our third runway.”

Sydney Airport slot management

One more change to watch out for actually happened shortly before the election: the replacement of Sydney Airport’s slot manager, Airport Coordination Australia (ACA), with foreign-owned company Airport Coordination Limited (ACL) for a three-year contract. ACL manages slots at 75 airports worldwide, such as London Heathrow and Dubai, and is owned by a consortium, including British Airways, Virgin Atlantic, and easyJet. If it performs well, the firm could take over the contract on a more permanent basis – or we may see another tender in a few years’ time.

ACL – which took over slot management at Sydney Airport as of 1 April – has promised new levels of transparency, with CEO Neil Garwood saying it will make Sydney slots the most transparent and visible in the world with a new local website detailing slot usage, as well as pushing back on the prevailing narrative that Sydney has little to no spare capacity.

“There are slots available. Some of those slots are in the peak. The domestic capacity numbers have not returned to the 2019 levels, and slot utilisation is not as high as we see in other airports. In the UK, some of the slot utilisation is 90 to 95 per cent – we don’t think it’s that level at Sydney,” he said. “All those factors together tell us that there are opportunities to develop the capacity utilisation at Sydney, and we think those represent real opportunities for the airport and the airlines here to build and develop and grow in the future.

“What good slot management does is help to make the best use of that capacity. We don’t create new capacity; we don’t create demand, either. We certainly believe that there is capacity available at Sydney Airport which could be used by incumbent carriers or possibly for new entrants if they wanted to enter the market.”

ACL’s entry into Australia follows slot reforms passed by the government late last year that introduced steeper penalties for airlines that “misuse” takeoff slots, compels carriers to increase transparency about their slot use, and creates a “recovery period” after significant disruptions. In addition to the current penalties for “no-slot” and “off-slot” movements, airlines will be penalised for failure to use an allocated slot; flight operations not in accordance with slot requirements; applying for slots with no reasonable prospects of use; and failure to return or transfer unused slots.

“This is the next step in the Albanese government’s comprehensive plan to boost competition and improve the experience of Australian travellers, including strengthening customer rights, adding more capacity through international air services agreements and ensuring fair access for travellers with disabilities,” Minister King said.

While changes to the “80/20” rule – which says airlines can keep a take-off slot indefinitely, provided they operate their slots at least 80 per cent of the time – were not part of the package, should the new regime fail to address the issues with Sydney’s slots, it is possible that the calls for reform may prompt a fresh look at the existing legislation.