Yahoo Finance Major new move after Rex collapse
The Albanese government will shake up access to Sydney airport after the collapse of regional airline Rex last week was partially blamed on the hoarding of slots at the country’s biggest airport.
Transport Minister Catherine King on Monday opened a tender process to appoint a new manager of Sydney airport’s timeslots, which are currently managed by a company majority owned by Qantas and Virgin Australia.
“Our reforms to the slot system at Sydney Airport are an important part of improving competition and significantly increase transparency,” Ms King said.
The slot manager allocates the windows in and out of the country’s biggest and most lucrative airport.
The government earlier this year announced reforms, which are still to be introduced to parliament, including changing the allocation process to free up more slots and changing the definition of a new entrant to make it easier for new airlines to obtain time windows.
Under the tender process, prospective slot managers will have to demonstrate how they will manage and mitigate conflicts of interest.
This is part of a suite of reforms to the Sydney Airport slot system which were announced in February.
The government has already implemented a number of these commitments including an independent audit of slot usage, with results to be released once completed.
It has also re-established the Compliance Committee for Sydney Airport that manages compliance with the slot regime.
Other reforms include modernising the compliance regime with penalties that address anti‑competitive behaviours, updated and strengthened enforcement tools for the government to watch airlines more closely and take effective legal action where necessary, and requiring airlines to provide regular information on how they use slots, such as reasons for cancellations or major delays, which will be regularly published.
The government wants to increase competition in the Australian aviation sector, but it denies Monday’s announcement is a direct response to Rex.
But the opposition said the government had been too slow on reform.
“It’s extraordinary that it’s taken the failure of an airline as important as Rex for Catherine King to move on something so important as competition in the airline industry,” opposition finance spokeswoman Jane Hume told Sky News Australia on Monday.
“Let’s not forget that it was only 12 months ago that we discovered that Qatar Airways had been blocked from additional slots … that would’ve provide an additional 28 flights to Australia … which would have brought the prices of airlines down.”
Ms King hit back at the accusation, saying the previous coalition government had been given the recommendations in February 2021 and did nothing about it.
“On coming to office, it was clear that the previous government had shown little interest in issuing a serious response to the findings,” Ms King said.
“In contrast, the Albanese government started the White Paper process and undertook consultation, including targeted consultation, on responding to the Harris Review.
“We are serious about making long term reforms to aviation in Australia that are much needed after a decade of neglect.”
Regional Express entered voluntary administration last Tuesday evening after its attempts to compete with Qantas and Virgin Australia in the metropolitan markets failed.
While flights to and from regional cities will continue, Boeing 737 jets flying between Melbourne, Sydney and Brisbane immediately ceased operations.
Nationals leader David Littleproud said while the government should have acted sooner, it had been a mistake for Rex to try to compete in the cities market.
“There is blame at Rex’s feet on this, and in fact they shouldn’t have gone ahead with such a big capital buy of those larger jets to compete with Qantas and Virgin until that regulatory reform had taken place, because that actually was very anti-competitive for them,” Mr Littleproud told Sky News.
Prime Minister Anthony Albanese last week said Rex should have stuck to regional routes, which the government has said are vital.
Rex’s collapse comes just three months after regional carrier Bonza fell victim to Australia’s heavily concentrated aviation industry after only 15 months in operation.
