Qantas is ‘most powerful’ player in Canberra: Peter Costello

Peter Costello says the airline puts a lot of effort into lobbying and he can’t fathom the Albanese government decision to restrict Qatar from increasing its flights.

Former treasurer Peter Costello says Qantas is one of the most powerful players in Canberra and can’t fathom why a decision was made by the Albanese government to restrict rival international carrier Qatar from increasing flights into Australia.

“(Qantas) has a very strong brand and puts a lot of effort into advertising and lobbying … And I would say as a company it is one of the most powerful players in Canberra,” Mr Costello said.

The former treasurer was speaking in capacity as chairman of the Future Fund at a briefing.

“It is hard to fathom why the government would not allow more flights into Australia at a time when fares are so high and volumes still down on pre-Covid levels. And of course by not allowing further international flights into Australia you’ll have less competition, you’ll have higher fares, you’ll have higher inflation,” Mr Costello said.

“So it’s very hard to fathom what the thinking behind that was.

“The suggestion that the government somehow had a responsibility to protect (Qantas’) profit? I just can’t understand — the government is not there to protect anybody’s profit.”

Future Fund chairman Peter Costello says private companies are supposed to compete. Picture: Josie Hayden

He said the private sector companies were supposed to compete with each other.

“It’s up to them to protect their own profits within the framework that’s been set by the government and regulatory authorities.”

Mr Costello demanded the government come clean on why it made the decision to knock back the international carrier.

“I think we need a much clearer explanation of those comments,” he said.

The federal government knocked back Qatar’s application for more traffic rights in July, following Qantas’ objection.

Transport Minister Catherine King told parliament this month that the government considered the extra 28 flights a week sought by Qatar were “not in the national interest” but refused to elaborate.

But the Australian on Wednesday revealed that senior members of the government were not informed of the decision taken by Transport Minister Catherine King, with ­Anthony Albanese saying on Tues­day he was not responsible for knocking back the Qatari bid.

Last week Qantas boss Alan Joyce told investors the argument to restrict capacity was made in a submission to the Department of Transport last October that was weighing up the Qatar application. 

Qantas CEO Alan Joyce during a senate hearing into the cost of living on August 28. Picture NCA NewsWire / Aaron Francis

Mr Joyce said that at the time Qantas had feared the additional flights “could actually distort the market”. 

“That’s proven to be correct, because capacity has essentially doubled in that period of time,” the Qantas boss told investors.

“From July 1 this year to June 30 next year 6.4 million seats will be added to international capacity”.

”In fact in the last few months, China Southern and Singapore Airlines have announced additions to capacity that are way above what Qatar was asking for”.

At the same time capacity between countries with “open skies” agreements including the US and Japan has also increased sharply. Mr Joyce added.

The Qantas boss said flight access rights between countries are dictated by governments and bilateral discussions and governments take in a lot of considerations and ask for submissions in different forms. 

“There’s a lot of reasons why the government can consider granting or not,” Mr Joyce said.

Originally published as Qantas is ‘most powerful’ player in Canberra: Peter Costello