How ‘Cabotage’ May Contribute to Cost-effective Flights in Australia

Weeks after Qantas chief executive Alan Joyce tendered his resignation to help Qantas “accelerate its renewal”, the company’s chairman, Richard Goyder, announced this week that he was also taking early retirement, to “support the restoration of trust“.

But the early retirement will take place “before the company’s annual general meeting at the end of 2024”, meaning Goyder will serve as chairman for some time to come.

This will give him time (among other things) to help Qantas respond to the Senate Air Services Inquiry, which reported Monday.

If implemented, some of the report’s recommendations would shift power away from Qantas, such as giving travelers automatic cash compensation for delayed or canceled flights.

But the investigation has probably not yet gone far enough, avoiding the bolder measures already taken in Europe.

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What does the Senate inquiry recommend?

The Senate inquiry was opened to investigate the Albanian government’s refusal to approve additional flights to Australia sought by Qatar Airwaysbut broadened its scope to examine how Qantas was treat your customers.

Among its recommendations are the following:

the government immediately reviews its decision not to increase capacity under the Australia-Qatar bilateral air services agreement

When making decisions on bilateral air services agreements, the government takes into account a cost-benefit analysis, consults widely with key stakeholders and publishes a statement of reasons for the decisions taken

government is reviewing reform options to boost competition in the domestic aviation industry, including potential divestment powers

Government directs Australian Competition and Consumer Commission to investigate potential anti-competitive behavior in the domestic aviation market

that the government develop and implement consumer protection reforms as soon as reasonably possible to address significant delays, cancellations, lost baggage and devaluation of loyalty programs.

The committee also wanted to be reappointed so that it could re-examine witnesses who had been unable to appear, including Alan Joyce and Transport Minister Catherine King.

Compensation for delays is already the norm in the EU.(ABC News)

Cashback for consumers and action at Sydney Airport

Specific suggestions in the report would shift power away from Qantas.

One of them is automatic cash compensation for delayed or canceled flights, of the sort that Europeans have enjoyed for almost 20 years.

Another solution is for the government to respond to the recommendations of an independent review to improve Sydney Airport’s “slot management system” (the way air traffic is managed), thereby reported almost three years ago.

Yet another one concerned”cabotage“: the possibility for foreign airlines to support domestic passengers on a domestic section of an international flight. The committee recommended that the government consider limited cabotage.

The government has not yet indicated which recommendations it intends to follow up on.

Open skies or tightly controlled skies?

The committee could have, and perhaps should have, made bolder recommendations.

We would have been without restriction Open sky agreements, of the type that Australia has already concluded with China, India, Japan, New Zealand and Singapore. This would see the government step back from decisions about landing slots and leave that to airports.

An alternative approach – almost the opposite – would be to retain the power to decide who lands, but use it to achieve the outcomes the government wants, such as commitments from countries like Qatar on topics such as workers’ rights .

The European Union has shown what can be done. He extracted the key concessions of Qatar on workers’ rights and environmental protection before signing an Open Skies agreement in 2021.

Prime Minister Anthony Albanese, a former transport minister who understands the details of aviation policy, may be particularly supportive of the idea, given Labor’s commitment to workers’ rights.

Radical changes to come

Next year the government will publish a white paper on aviation policy up to 2050, after securing back on a green paper published last month.

The next 30 years will be far from business as usual for airlines and airports, regardless of what decisions the government makes and how Qantas responds.

Ultra-long-haul planes are expected to connect Paris to Perth, and even London to Sydney within a decade. They are likely to impose new alliances between airlines which today seem improbable.

And the chorus against long-haul travel excess is likely to grow louder.

that of Prince William refusal to travel to Sydney for the Women’s World Cup final, due to the scale of the carbon footprint, could be a sign of things to come.

Gui Lohmann is Professor of Air Transport and Tourism Management and Justin Wastnage is an Industry Associate Research Fellow at the Griffith Institute for Tourism at Griffith University. This piece first appeared on The conversation.