More competition the key to on-time flights from Sydney, says airport

Flight delays and cancellations at Sydney airport are unlikely to improve until slot hoarding is addressed, a parliamentary committee has heard.

Flight delays and cancellations at Sydney airport are set to get worse until changes are made to operational constraints on the gateway, a parliamentary committee has been told.

The Standing Committee on Economics examining economic dynamism and competition heard that the current slot management scheme and cap of 80 flights an hour had become a hindrance rather than a help.

Rex deputy chairman John Sharp, who oversaw the implementation of those measures as federal transport minister in 1996, said they had now become a “barrier to competition”.

“I would argue they’re in desperate need of reform,” Mr Sharp said.

“The slot system unfortunately has become quite different to the basic principles we set out, and airlines have started to game the system in order to hoard slots so other people can’t use them.”

Slots are the time windows allocated to airlines at Sydney airport, with Qantas and Virgin Australia holding the lion’s share.

Both airlines have previously been accused of holding onto more slots than they need in order to keep rival carriers out.

Virgin and Qantas deny the practice, attributing high cancellation rates to frequent weather disruptions in Sydney and air traffic control shortages.

But July data showed Rex’s cancellation rate on the busy Sydney-Melbourne route was 4.6 per cent, compared to Qantas’s 8.1 per cent and Virgin’s 10.9 per cent.

“That is clear evidence of an airline gaming slots,” Mr Sharp said. “Qantas (and Virgin) are operating the same plane as Rex, in the same weather conditions but with about twice the level of cancellations.”

He pointed to recommendations for change made by former Productivity Commission chair Peter Harris in a 2021 report that “was simply gathering dust”.

Sydney Airport has told a parliamentary committee on economics it doesn’t have a complete understanding of how the slot co-ordinator allocates spaces to airlines. Picture: NCA NewsWire/James Gourley

Concerns were also raised about the “independent” body tasked with allocating slots, known as Airport Coordination Australia.

Committee deputy chair Garth Hamilton said the ACA website listed no names on its board of directors, only that it included representatives of Qantas, Virgin and Sydney Airport.

“There are no annual reports, no meeting minutes. There’s a lack of transparency right from the get go,” Mr Hamilton said.

Sydney Airport head of aviation Rob Wood told the committee it did not have a complete understanding of how the slot co-ordinator made decisions.

“We think there needs to be a periodic tendering of the role of slot co-ordinator, and we think the slot co-ordinator needs to have very well-defined governance obligations and KPIs (key performance indicators) to underpin that,” Mr Wood said.

“We don’t think we should be on the board. It’s really important the slot co-ordinator is independent of all influence, and they’re making decisions following the rules and guidelines in place.”

He said slot allocation and the flight cap were the “root cause” of delays and cancellations.

The hearing came as Canberra Airport joined the chorus of concern about “slot hoarding” in ­Sydney. CEO Stephen Byron revealed he had written to Qantas Domestic chief executive Andrew David about high levels of cancellations on Canberra-Sydney, compared to other routes out of the national capital.

Since February more than 50 flights to Sydney had been axed every month, which Mr Byron said seemed “desperately unfair” to travellers.

Qantas is scheduled to come before the committee next Tuesday.

Originally published as More competition the key to on-time flights from Sydney, says airport