Llew O'Brien (Wide Bay, National Party) | Link to this | Hansard source

I move:

That this House notes that:

(1) the Government has scrapped the monitoring of domestic airlines by the Australian Competition and Consumer Commission at a time when Australian consumers are paying more for airfares but are subject to increased flight cancellations and delays;

(2) domestic airfares were 32 per cent higher in May 2023 than they were pre-pandemic in May 2019; and

(3) 1,700 flights were cancelled, and 12,000 flights arrived more than 15 minutes late in April 2023.

Taxpayers gave Australian Airlines $5.3 billion during the pandemic. This money came with the direction that the ACCC monitor the recipients of it. Airlines are heavily affected by government decision-making. Regional flights can enter Sydney airport only because regional slots were ring-fenced by previous coalition governments. When the coalition brought the cap slot system in, the slots provided a fair way for Australia's aviation needs and demands to be balanced. While the original idea was that no company owned the slots, over decades this has been perverted by sneaky practices that mean that the slots have become somewhat the property of certain airlines.

Qantas exploit the scheme by holding on to slot scheduling a flight, if only to cancel it at the last minute, ensuring one thing: no room for competition. The ACCC found this practice has resulted in inefficient use of slots. If you want cheaper fares and better services, you need competition, and Bonza can't even get in to Sydney airport. The ACCC highlighted these barriers to competition and capacity in its most recent report. Indeed, Sydney-Melbourne is the second-busiest airline route in the world. It's predominantly serviced by Qantas and Virgin. Nearly one in 10 flights on this route was cancelled in April of this year. They effectively rent space they don't use to deny others the use of it.

Qantas has enormous capacity to control the aviation market by being one of the biggest and most effective lobbyists here in Canberra. The taxpayer stumps up billions of dollars regardless of Qantas Group's massive position in the market. The Labor government denied Qatar Airways additional access rights recently. I asked the question, did Qantas lobby the government about this decision? Is there any other company in Australia that has more than a 60 per cent share of such a big market? There's no bank, telco or supermarket that controls nearly two-thirds of the sector. Would we allow Woolworths to have so much market share that it could determine the price of all groceries?

We now have an absurd situation where domestic airfare prices are 32 per cent higher in nominal terms in May 2023 compared to May 2019 while the service costs have decreased. In the same period, the cost of jet fuel fell to almost half of what it was, from $259 per barrel in June last year to $137. In April alone, 1,700 flights were cancelled, including 9.2 per cent of flights between Sydney and Melbourne, 8.7 per cent of flights between Sydney and Canberra and 5.7 per cent of flights between Sydney and Brisbane.

Taxpayers paid Qantas billions of dollars during COVID, and what did they get in return? A CEO with a seven-figure bonus and a lecture on their corporate political views regarding the Voice. Qantas's profit is expected to soar to $2.5 billion, while its ranking in world airlines has plummeted from fifth to 17th. I think it's a case of placing profit ahead of passengers. Delays, cancellations and lost baggage saw its Roy Morgan rating as the sixth most-trusted brand in the country crash to 40th place. In all this Qantas has never acknowledged taxpayers kicking in all the money they did when it was in need.

It's time for the Albanese Labor government to show that it's not beholden to Qantas and to allow competition to benefit consumers. Qantas must lift its game if it has any claim to the revered status of our national carrier.

Terry Young (Longman, Liberal National Party) | Link to this | Hansard source

Is there a seconder?

Michelle Landry (Capricornia, National Party, Shadow Assistant Minister for Manufacturing) | Link to this | Hansard source

I second the motion and reserve my right to speak.

Daniel Mulino (Fraser, Australian Labor Party) | Link to this | Hansard source

Flight cancellations and delays are a problem. They impose costs on members of our society. The increasing frequency of cancellations and flight delays is something that does merit very close examination and potentially a public policy response.

What are the problems with flight cancellations and flight delays? First of all, there's the time that is wasted. There's time sitting on the tarmac. It is not just the time—sitting on the tarmac for 30 minutes or 60 minutes or spending 30 minutes or 60 minutes in the airport lounge or the airport terminal—quite often there's significant cost at the other end of the trip. You might have missed a meeting or a family gathering, which was the whole point of the trip. In the worst-case scenario people have had the inconvenience and expense of staying overnight in a place they didn't plan to en route to the place they originally had planned to. Then of course there are the other costs associated with the added uncertainty that we're now experiencing. Many people will now fly in advance—maybe the night before or hours in advance. These are all costs that are real but are difficult to measure.

What are the causes of flight cancellations and flight delays and their increasing frequency in our system? This is something that merits very close examination. As has been pointed out by a number of commentators, there is some data to suggest that it is worth examining whether or not slot hoarding is occurring. The Paris review was handed down two years ago. It was a very vigorous analysis of slot management across our airports. Its recommendations warrant very close examination, particularly in light of the behaviour of airlines since that time.

The committee of which I'm the chair—the House of Representatives Standing Committee on Economics—is undertaking a major review of competition. One of the sectors it's looking at is the aviation sector. We have already obtained evidence from Bonza and Virgin in relation to their participation in the airline sector. We will be seeking evidence from Qantas and Rex. We will also be seeking evidence from Sydney airport and other airports. Of course, we also have occurring concurrently with that the major aviation white paper.

So we do have a significant amount of policy work underway, but it is imperative that this work be undertaken carefully, because in order to design the best policy response to what we're seeing we need to make sure we fully understand the causes of what we are observing. Are we seeing increased flight cancellations due to slot hoarding? Are they due to an increased prevalence of mechanical faults due to underinvestment in maintenance? Are they due to the increased prevalence of bad weather? Are they due to systemwide issues?

We need to dig down into the data and fully understand what's going on in our network before we jump to any conclusions. This government, after a decade of inaction from the previous government, is now undertaking that work through my committee's examination of market concentration of the airlines but also of course, and even more importantly, through the white paper that is expected in 2024.

The monitoring by the ACCC, which has been very useful, was always due to end after three years. That was the deadline which the previous government set. What this government has done is say that, the monitoring having expired at the deadline that the previous government set, the Australian government's Bureau of Infrastructure and Transport Research Economics will continue to publish reporting on domestic airfares on a monthly basis. So there will be transparency through that mechanism, and, if necessary, the ACCC can be given a further reference.

So what we have in place is the House of Representatives Standing Committee on Economics undertaking a competition inquiry which will no doubt feed into the broader aviation white paper, and we have reporting by the Bureau of Infrastructure and Transport Research Economics. And, of course, this government at a more systemic level has substantially increased penalties for any company engaging in anticompetitive behaviour. So action is being taken on a problem that has been around for a long time.

Michelle Landry (Capricornia, National Party, Shadow Assistant Minister for Manufacturing) | Link to this | Hansard source

In the year ending May 2023, more than 55 million Australians flew on an Australian domestic flight. Whether for business or leisure, one thing every Australian traveller will agree on is that the cost of flights is surging and flight delays can be expected. Travellers are experiencing almost double the rate of flight cancellations and a 50 per cent increase in delayed flights compared to the long-term average. A staggering 12,000 flights were delayed by more than 15 minutes in April this year. In that same period, 1,700 flights were cancelled.

Following the pandemic years of little travel, particularly for leisure, Australians are being encouraged to holiday in our own beautiful, unique country, yet the cost of a flight has grown significantly. A flight in 2023 is more expensive than one in 2019, greatly impacting Australians' ability to travel. The Australian Competition and Consumer Commission made their final report on airline competition. Their report confirmed what every traveller already knew: the cost of flights has increased. This report showed that the cost of a flight in May this year had increased by 32 per cent in one year.

In my electorate of Capricornia, Rockhampton Airport is the gateway to Central Queensland and is the main aviation port for the region. The cost of a one-way flight to Brisbane can be over $400 in peak periods. The price of aviation fuel has halved since its peak in mid-2022 and is on a par with pricing seen in 2018. Aviation fuel was down to $137 per barrel in May this year compared to the $259 per barrel seen in June 2022. However, the consumer hasn't seen the drop passed on when booking with their chosen carrier.

In 2020, the former coalition government directed the ACCC to monitor airlines for three years during the pandemic to ensure the interests of Australian travellers were being looked after. This ACCC monitoring was put in place to ensure essential air connectivity was maintained to preserve critical aviation capacity and protect supply chains. As part of this directive, the ACCC monitored the price of airfares, costs and profits in the domestic air passenger sector. In the ACCC's May report, they highlighted that domestic airfare prices were 13 per cent higher in real terms in May 2023 compared to May 2019.

Not only was the ACCC to monitor airfare costs; it was also to observe the level of capacity the airlines were putting on each route and whether this was occurring in a way that might damage competition. It was noted that airlines are taking advantage of policies across major Australian airports which allow them to retain a landing and take-off slot for an indefinite amount of time. This is impeding new or expanding airlines acquiring the time slots needed to launch new services which would drive down airfares.

When travellers are being slugged by high ticket prices, more cancellations and lengthy delays, now is not the time for this government to pull out of monitoring the industry. This government's hands-off approach to the sector will only compound the struggle for reasonably priced airfares and will affect Australia's domestic market.

Throughout the three years of the ACCC monitoring the aviation sector, it was noted that the current Airline Customer Advocate is generally ineffective. There is a clear need for an independent new system for resolving disputes between airlines and customers, one which is a truly independent, external, dispute resolution ombudsman scheme with the ability to make binding decisions. The ACCC also considered that there is merit for the government to consider a consumer compensation scheme for delayed or cancelled flights.

More needs to be done to make the aviation sector competitive, while also ensuring Australians aren't receiving a raw deal with the cost of airfares. In these years following the COVID-19 pandemic we need to be encouraging domestic travel to boost the economy for our regional communities. Ensuring that airfares are reasonably priced will go a long way to encouraging tourism back into the regions. This government must extend a direction to the Australian Competition and Consumer Commission to keep track of the aviation sector. With the barrel price of aviation fuel dropping and new competition through airlines like Bonza, ceasing watch over the current players in the industry is a ludicrous decision by this government.

Luke Gosling (Solomon, Australian Labor Party) | Link to this | Hansard source

I thank the member for this motion. The truth is that airfares remain ludicrously high in this country, and any honourable member that has any clue whatsoever would agree. Domestic airfares were 32 per cent higher in May of this year than they were before COVID. A Darwin to Canberra flight will range from 500 bucks to over 1,100 bucks, depending on the airline, and that's a one-way ticket only. Is it any wonder that we have not yet seen passenger levels recover to pre-pandemic levels? In April this year, 4.6 million passengers flew, and that is only 92 per cent of April 2019 levels and only marginally more than this time last year. I'm certainly not surprised about that.

There is some good news in the latest ACCC airline monitoring report released in June. It found that airfares continued to fall this year, as pent-up demand for travel eases and the price of jet fuel continues to fall—the latter by almost half since its June 2022 peak. The price of discount airfares reduced slowly by 14 per cent in real terms between February and May 2023, and that's a very good thing, but it's still too high. Qantas is expecting a record $2.4 billion in profits this year, which is still above pre-pandemic levels, so we shouldn't forget that. The price drop isn't across the board. The price of several routes has more than doubled, including Brisbane to Darwin, which is up 172 per cent to $622 or thereabouts. I've often called out uncompetitive behaviour in the airline industry and I will continue to do so.

Prices are not the only metric that is still not right. The industry cancelled 3.9 per cent of flights in April alone—and that's over 1,700 flights—compared to a long-term average of 2.1 per cent. One airline cancelled 8.1 per cent of its flights, and only 71.8 per cent of flights were on time, compared to an historical level of 81.5 per cent. So that's clearly not good enough.

We know the root cause of the issue is mostly a lack of competition. The duopoly market structure, which has largely been the situation in Australia, has made it one of the most concentrated industries in the country, and Aussies are sick of picking up the tab—nowhere more than in the Northern Territory, where the high cost of flying interstate is an issue constantly raised with me. Territorians are often faced with sky-high airfares and tough choices when hoping to visit family and friends. Along with the community, tourism operators and businesses also feel the effect of higher airfares. We know that Darwin is a magnificent and popular tourist destination, but people need to be able to get to the Top End and get from the Top End to visit family and friends at a reasonable price.

Connectivity is a necessity for us, not a luxury. I'll continue to fight to make sure that Territorians get a fair deal. In fact, when I was elected I launched a campaign called Fair Fares NT because the situation was very bad and it was clear that there was price-gouging going on when it came to our Northern Territory routes. I also helped to bring a Senate transport committee to Darwin in that first term of parliament to look at how airlines determine prices in country areas of our nation. I regularly remind the airlines of their responsibility to the people of the Northern Territory. Indeed, in Qantas's case, NT is in its very name.

Only today my office sent a very clear message to a major airline about the cost of flights in and out of the Territory. Going forward, the domestic airfare index will continue to be published monthly by the Bureau of Infrastructure and Transport Research Economics, and I want to acknowledge the work of the ACCC. Our government is committed to delivering an aviation white paper to set the scene for the next generation of growth and development across the aviation sector. What it absolutely must do is ensure that the gouging of regional areas of Australia and the NT stops.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) | Link to this | Hansard source

I heartily agree with some of what the member for Solomon has just said. Regional areas are captives of high air prices because many regional people—whether they're travelling by air for tourism, for business or perhaps most importantly for medical reasons—have no other way of getting from their home communities to a capital city. Unfortunately, for some regional people, it is a case of: 'When in pain, catch a plane.' This particular motion brought to the parliament by the member for Wide Bay is a good one. What I fear, though—and the member for Solomon just belled the cat—is a review in the form of an aviation white paper. Australia is being strangled by reviews.

Luke Gosling (Solomon, Australian Labor Party) | Link to this | Hansard source

We've got to fix it.

Michael McCormack (Riverina, National Party, Shadow Minister for International Development and the Pacific) | Link to this | Hansard source

We have to fix it. I'll take him on that interjection. No government has ever done more for aviation than the coalition government did when it was in power from 2013 to 2022. Indeed, when there were calls by those opposite to buy Qantas in 2014 when it was going not that well and the skies were not that blue, we resisted that urge. We resisted that clamour of populism by those opposite. Then, of course, COVID hit and planes were grounded. Virgin was going very badly. Its books were terrible. But I pay tribute to Paul Scurrah, Jayne Hrdlicka, who took over from him as CEO, and others in Virgin for holding the line, and I commend the government for holding its nerve because running airlines is not the remit of government, as Jayne Hrdlicka would know and as her predecessor would know as well.

We do have an issue with the prices of tickets. We do have an issue with cancellations of flights. I know this firsthand. I missed a wedding recently because of the cancellation of a flight at very short notice, and my wife and I were unable to make the connecting flights to enable us to attend that very important event. We're lucky that during COVID we were able to fly. The airlines need credit too for that fact because we know that planes in the air mean jobs on the ground. They were able to keep many people engaged, but, of course, it came at a huge expense to government and to taxpayers through the Domestic Aviation Network Support program, the Regional Airline Network Support program and the Tourism Aviation Network Support program. DANS, RANS and TANS meant that people could still fly to Cairns. It meant that people could still get on a plane and fly to a regional area for whatever reason. Perhaps even more importantly, it meant that people in regional areas could also fly anywhere they wished.

This government must end the delays over the recommendations of the Harris review into demand management at Sydney Airport. This government is now in government, and it's a shame that the minister for transport is not in here talking on this very important motion, because she should be. Indeed, she does have questions to answer. She has questions to answer over the staffing in flight control towers. She has answers to give on the Harris review and on why this government, the Labor government, has scrapped the monitoring of domestic airlines by the Australian Competition and Consumer Commission at a time when Australian consumers are paying way too dearly for airfares and are subject to increased flight cancellations and delays. What's the minister doing about it? I'd say diddly-squat. She's not doing anything. You very rarely see or hear her talking about aviation on television or radio or in newspapers, and she should. She's the minister, and with being a minister comes responsibility.

When I was the transport minister, we kept Virgin, Qantas, QantasLink and Rex in the skies, even coming out of COVID. We kept those companies afloat at a time when, worldwide, so many aviation companies—dozens, in fact—went bankrupt. They didn't under our watch. This government needs to do more and it needs to do it quickly.

Tony Zappia (Makin, Australian Labor Party) | Link to this | Hansard source

This motion from the member for Wide Bay sums up with, I think, some very useful statistics the situation with respect to the airline industry, which I think most of us in this House are very familiar with. Whilst I for one was not aware of the precise statistics, nothing in this motion surprises me with respect to the issue of the higher prices that tickets are being sold for, the number of cancellations that have occurred, the number of flights that are arriving late et cetera.

The first point I want to make is on the critical part of the motion which talks about the Australian Competition and Consumer Commission not monitoring the domestic airlines any further. That monitoring ended on 30 June because that is exactly what the previous government had prescribed it ought to do when they introduced the monitoring back in 2020. So it was their decision to end it on 30 June, and that decision was simply continued by the incoming Albanese government.

But the real issue, even with respect to that, is that monitoring the statistics is one thing and actually doing something about it is another. Indeed, I don't know of too many other areas where governments of all persuasions, state and federal, monitor situations and are able to do much more about it. We live, supposedly, in a free-market society where there are no controls about how anyone who provides services operates, and that is clearly the case with respect to the airline industry.

I say to members opposite that, whilst I can understand their concerns about the delays that are occurring right now—we just heard the member for Riverina talking about how he missed attending a wedding because of that—and the price-gouging that is going on, I didn't hear much from them when airline maintenance services were being either offshored or outsourced or when, in the middle of COVID, people like the dnata workers were totally excluded from any support payments. Yet the truth of the matter is that they were Australians, just like those who were getting supported. They were left out, and I didn't hear members opposite standing up for them at the time.

I refer members to a Crikey article that appeared only today, from Michael Sainsbury, which I believe perfectly sums up the situation with Qantas right now. I suggest to members that they take a moment to read the article. I'm not going to go through it, but it certainly sums up the situation with respect to the airline industry and Qantas in particular. It highlights the fact that Qantas is projected to make a $2.4 billion profit this year, or perhaps even a bit higher, whilst at the same time it not only engages in what I think we all know is price-gouging but has offshored most of its maintenance, to the point that not only are delays being caused because the maintenance can't be done here but one has to question whether that maintenance is being done at the same levels as when it was all done in Australia. The places where it is done in Australia have been allowed to run down to the point whereby it would make a huge difference if Qantas actually injected some money into ensuring that those places were given the support that they need. Indeed, it's a concern to me because, quite frankly, we all fly on their planes and the truth of the matter is that they are probably not getting the attention that they should.

I recently spoke to one of my good friends, who is actually an aircraft engineer. He works part time because of his age. He could work full time tomorrow anywhere in Australia because of the shortage of engineers that we have in the industry right now. Again, they are allowed to be run down because all that work was offshored, nobody here bothered to do the training and none of the companies here bothered to do what we would refer to as the apprenticeship training that gets them into the job in the end. The outsourcing, the offshoring and now even the maintenance of the old fleet are all part of the problem of delays, and Qantas know they don't have any real competition. They do what they want to do, and that is causing all the problems that the member for Wide Bay refers to in this motion.

Tony Pasin (Barker, Liberal Party, Shadow Assistant Minister for Infrastructure and Transport) | Link to this | Hansard source

If only I had the benefit of the last portion of the member for Makin's contribution. I've got to say I agree with much of it. That's the reason why I congratulate the member for Wide Bay for bringing this matter to the attention of parliament and, in particular, the Federation Chamber. What we're seeing here is, effectively, the cancellation of the oversight mechanism of the ACCC's as it relates to domestic airlines. Whilst that has only been in place for three years, it was an important measure implemented by the then government on the back of significant financial support provided by the public via its federal government to ensure airlines survived the shockwave that came with the global pandemic. But, in the midst of a cost-of-living crisis, to end that oversight at a time where we see domestic airfare prices 32 per cent higher in nominal terms in May 2023 compared to May 2019, or 13 per cent higher in real terms, I think is a retrograde step that will only exacerbate the kinds of things that the member for Makin was referring to.

It's because of this oversight and the quarterly reporting being undertaken—or that had been undertaken until the decision to cancel support for the program—by the ACCC that I can stand here and say to the Federation Chamber that domestic airfare prices are 13 per cent higher in real terms in May 2023 compared to May 2019, that 1,700 flights were cancelled in April of 2023, that 1,200 flights arrived more than 15 minutes late in that same month or, equally, that the cost of jet fuel is almost half what it was in June 2022. These are important metrics which effectively hold a domestic airline carrier's feet to the fire so that there can be discussion and debate around why it is that we're seeing this price activity.

Whilst the member for Makin referred to Qantas, I'm also particularly interested in other aviation providers around the nation. For some people who live in metropolitan settings, a flight is nice to have. There are lots of people who live in regional and remote Australia for whom flights are a must-have. I invite the member for Makin—indeed, any member of this place—to visit the fabulous south-east of South Australia. One of the ways they can get there is to fly Rex from Adelaide to Mount Gambier. I'm sure the member for Making has done that on occasion, and other members have perhaps travelled from Adelaide to Port Lincoln. The price of those flights really does make your jaw drop.

The people I worry about the most are people who need to book those flights in a quasi-emergency, where a loved one or a friend has been airlifted by the RFDS to Adelaide and you want to be there, so you've booked that flight at the last minute, or where you've finally got a call from a specialist to say: 'If you can get to Adelaide tomorrow morning then I can see you.' Then what my constituents do is to jump online and see the flights; invariably, they're the most expensive flights available, but they take them anyway, because, for many of them, driving to Adelaide and back is just not an option.

I want this mechanism to continue because I want to hold carriers' feet to the fire. I'm not against the idea that they make reasonable profits; I think that's perfectly acceptable. But I want to ensure that, as has been described by others, there's the kind of information you need to make sure you can highlight what ought to be happening with prices in those circumstances.

Steve Georganas (Adelaide, Australian Labor Party) | Link to this | Hansard source

This private member's motion on airline monitoring is an important motion, because, as you can see, the government plays an important role in the aviation industry by setting the regulations and the safety standards but also, very importantly, by monitoring competition. If we look at the last few years, with COVID and then leading out of COVID, we know that this is a very important job. We have seen increases in airline tickets and the cutting of a range of staff from our wonderful airlines. So it is very important that we keep that competition. That job includes the good work that the ACCC, the Australian Competition and Consumer Commission, has been doing to ensure that airlines operating within Australia are compliant with the Competition and Consumer Act.

Back in 2020, the former Treasurer issued a direction to the ACCC to monitor prices, costs and profits relating to the supply of domestic air passenger transport services in Australia for a period of three years, and this direction came at a time of severe disruption, as I said earlier, during the pandemic—disruption especially to passengers but also to the airline sector, as no-one could actually travel because of the border closures. When giving this direction, the then Treasurer also gave an end date of three years. So it was always planned for it to end at this point, and the current government in no way altered those directions of the previous government.

Now, those opposite started the monitoring and they decided when to end the monitoring. They can try to perhaps hide the facts all they want, but this was their decision. While the direction expired in June 2023, the Australian government's Bureau of Infrastructure and Transport Research Economics will continue to publish reporting around domestic airfares on a monthly basis, and I know that that will be done because I've had discussions with the transport minister on this, because it's a very, very important issue in terms of ensuring that consumers have choice and that there's competition in the industry. I know that our government will be keeping a very strong eye on this particular situation, and if the situation requires it, then the Australian government will resume the ACCC monitoring.

Airlines play an important role in our nation. We are an island nation, a huge nation, and we are solely dependent on airlines when we travel from cities to cities over vast, great distances. Most people in Europe travelling the distance that all of us in here travel every week, on and off, would be going through three different countries. So it's important that we monitor these airlines to ensure that they're doing the right thing but also to ensure that there's fair competition. There has been talk recently about other airlines coming into the market as well, especially in the international market.

The Albanese government also committed to delivering an aviation white paper, to set the scene for the next generation of growth and development across the aviation sector and to ensure that there's competition working in support of the consumers, the Australian public. We saw a decade of inaction by the opposition. This will provide a new chance for us as a nation to chart the opportunities for the future. The white paper includes considering as a priority the economic reforms needed to improve productivity across the sector, such as addressing skill shortages and competitiveness, to ensure the sector is appropriately positioned to deliver aviation services for the Australian public and international visitors out to 2050. So it is a vision for a number of years.

The white paper process will also consider consumer protection issues and stakeholder views on options to improve the complaint-handling process. We've seen this reported in the media consistently since COVID. It's very important that we look at this and implement measures to ensure that there's protection for the customer. The green paper is due out in the coming months. We're looking forward to continuing to work with the industry, communities and other aviation stakeholders during the white paper process, which is expected to wrap up by 2024, and in advancing aviation productivity and competition in Australia.

Bridget Archer (Bass, Liberal Party) | Link to this | Hansard source

The time for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.