ABC CANBERRA DRIVE WITH ANNA VIDOT

TRANSCRIPT

E&OE

RE: Qantas Flight Cancellations 

Anna Vidot
Unfortunately, you might rush to get your flight but well, very often, maybe not very often, that's probably unfair, more often than we would like, those flights end up being cancelled. This is a very common story, relatable story for many of us. But we're not the only ones. In fact, so much is that the case that there's a parliamentary inquiry that's now looking into competition in the aviation industry, and whether it's working as well as it should. The members of Canberra, Alicia Payne sits on that committee, and having just managed to get a flight back into Canberra joins me in the studio to talk about it Alicia Payne, Hello,

Alicia Payne MP
Good afternoon Anna, thanks for having me on.

Anna Vidot
Delighted your flight was not cancelled

Alicia Payne MP
Me too. Me too.

Anna Vidot
What has prompted this inquiry? Why do you think it's necessary.

Alicia Payne MP
So this is actually a broader inquiry into competition and dynamism in the economy that the House Economics Committee is running and aviation is just one aspect of that. But one of the reasons I've taken a particular interest in this aspect of it is that Canberrans really are getting a raw deal when it comes to experiencing a lot of cancellations and delays with our flights, particularly on the Canberra to Sydney route with Qantas. So I'm sure that listeners will relate to this if they've been trying to get flights or hearing about it from people. But basically, obviously, there's always going to be cancellations and delays for good reason. But on that Canberra to Sydney route at the moment, for Qantas, the rate of cancellations is routinely about 12%. So that's been about 50 flights every single month, 58 in June, and that compares to a rate of around two and a half percent of cancellations for Virgin, and also much, much lower cancellation rates for Qantas on their other routes, and also from other destinations into Sydney. So it does point to a bit of an issue there.

Anna Vidot
Do you have a sense of what the issue is?

Alicia Payne MP
Yeah, well, there's a range of issues. In the aviation industry, it's a highly concentrated industry, Virgin and Qantas have around 90% 95% of the total market, and around two thirds of that is Qantas. So the issue that comes out of that is there's not a lot of competition between the airlines. And you could, we have high, high prices for flights, and we have low reliability, with cancellations and delays. And also lots of complaints about customer service. And so this is what you would expect when you have very low competition. But one of the issues that's come up in the inquiry is particularly around the slots that airports, well that airlines need to book flights. And this is an issue that people may not be really aware of, I wasn't until getting engaged in this inquiry. But basically, to make a flight, the airline needs to secure a slot. And these are allocated not by the airport, but actually by a board. They belong to the Commonwealth essentially. But the flights, the slots are easier to get for the larger airlines. And particularly Sydney Airport is a key one because it's the busiest airport. And if an airline is able to, there's what's called the 80/20 rule. So if the airline is fulfilling that slot 80% of the time, they can keep it and they sort of get first dibs on it into perpetuity. So it's very hard for new entrants, for example, Rex or Bonza, or other smaller airlines to get into that market. So when a big airline like Qantas has a lot of those slots at Sydney Airport, they could potentially be what's been referred to as slot hoarding, where they keep that slot, and then it's easier for them to offer more flights and cancel more flights and just put people onto other flights. But what that means is there are less airlines able to access that and offer perhaps cheaper fares and start a bit of a price war and bring down prices for customers as well as competition for other aspects of the product they're offering.

Anna Vidot
Has your committee yet, do you expect to hear from Qantas to explain themselves?

Alicia Payne MP
Yes, we are. We will be hearing from Qantas on Tuesday next week.

Anna Vidot
Beyond that, is this a Qantas issue or are you seeing other issues that you think might be affecting competition and affecting the experience for travellers out of Canberra in particular?

Alicia Payne MP
Well one, and I don't mean to make it sound like it is just a Qantas issue but those, that data is interesting. And obviously they do have the absolute lion's share of the market. But some of the other solutions that have been put forward and some that have been recommended by the ACCC, include another issue that people might be surprised to find out, is there is no overall standard for entitlements for consumers relating to delays and cancellations. So there's no particular requirement on airlines to reimburse you or provide accommodation that obviously, they do that sometimes. But so introducing rules like that, but also a requirement for airlines to show cause and explain why delays are happening or cancellations and I think that's a really sensible idea, and one that's been put forward by Canberra Airport, as well, to address this issue, because if they don't have to show cause, they never have to explain it. And if they can hold on to the slots anyway, there's no real incentive to address the problem and it perpetuates this potential issue of hoarding the slots for the bigger airlines.

Anna Vidot
Do you feel like you've got as a committee a good sense of consumer feelings on this? Are you looking for public submissions or contributions?

Alicia Payne MP
Yeah, we have called, well submissions are probably closed now but we're still keen to hear from people and we have been talking not just to airlines and airports, but also competition experts from across the economy. And as I said, we have been looking at other areas of the economy as well. So we've talked to supermarkets, we've talked to the tech industry, we've talked, it's been a quite comprehensive inquiry that's ongoing.

Anna Vidot
One to watch for sure I think for many Canberrans. Thank you very much for your time.

Alicia Payne MP
Thanks for your interest.

Anna Vidot
Thank you, Alicia Payne is the Member for Canberra. And luckily, luckily on a non cancelled flight for us this afternoon. You're listening to ABC Radio, Canberra.