The Australian Labor government has restored the Australian Competition and Consumer Commission's (ACCC) oversight of the aviation industry, marking a significant policy reversal. This action is a response to growing criticism that the aviation sector has been underregulated and uncompetitive. Over the next three years, the ACCC will examine consumer protection, flight pricing, and service standards in the industry.
Pressure mounts for restoring competition monitoring
Transport Minister Catherine King faced substantial pressure to reinstate competition monitoring in the airline sector. Previously, the ACCC had been publishing quarterly competition reports, following a directive issued by the Morrison government during the COVID-19 pandemic. This directive, however, was not renewed after the release of the commission's final report in June. Despite numerous calls for its renewal, both from the ACCC and the broader aviation sector, the monitoring was discontinued.
Qantas' opposition and subsequent reversal
Notably, Qantas was the only airline to oppose the reinstatement of ACCC's competition monitoring. This contentious issue was extensively discussed during a recent Senate inquiry into bilateral air rights. While other major carriers like Virgin Australia, Regional Express, and Bonza expressed support for the resumption, Qantas CEO Vanessa Hudson contended that the ongoing role of the ACCC was sufficient in regulating the industry's competitive landscape. However, Qantas has since softened its stance, acknowledging the need to restore public confidence in the industry.
The government's rationale and implementation
The government has announced that the renewed monitoring will commence at the end of the year, playing a crucial role in shaping the forthcoming aviation white paper, which will outline aviation policy until 2050. In contrast to the previous government's approach, the current administration views ACCC monitoring as a means to address declining service standards and higher prices, ensuring that these findings will not go unheeded.
Key areas of focus
Under the renewed monitoring, the ACCC will assess various critical aspects, including airline capacity on key domestic routes, the frequency of flight cancellations, and punctuality in arrivals and departures. Additionally, the practice of "slot hoarding," where airlines intentionally schedule and then cancel sought-after take-off and landing slots at Sydney Airport, will come under scrutiny. It's worth noting that both Qantas and Virgin have consistently denied engaging in this practice.
Senate's decision and unanswered questions
Despite the push to establish a second parliamentary inquiry into the aviation sector, the Senate voted against it. The opposition had hoped to summon former Qantas CEO Alan Joyce to respond to inquiries about competition, but the motion was rejected. Joyce, who left his position ahead of schedule amidst a series of controversies, was unable to appear before the recent inquiry into bilateral air rights.
Bridget McKenzie, committee chair, expressed disappointment that the extension of the Senate committee into bilateral air rights was not granted. She accused the current Prime Minister, Anthony Albanese, of shielding corporate interests and criticised his stance on aviation issues.
The reinstatement of ACCC monitoring marks a significant shift in the government's approach to regulating the airline sector. It reflects the determination to address concerns over competition, pricing, and service standards while acknowledging the importance of public confidence in the industry. The decision has sparked both political debate and industry-wide expectations for a more transparent and competitive aviation sector.