Qatar turbulence worsens as Anthony Albanese washes his hands of flights decision

The decision to deny Qatar Airways more flights was not taken by cabinet and key ministers were not consulted on the ruling by Transport Minister Catherine King.

Prime Minister Anthony Albanese at the launch of the Qantas 'Yes' Campaign in Sydney. Picture: NCA Newswire / Gaye Gerard

The decision to deny Qatar Airways more flights into Australia was not taken by cabinet and key ministers were not consulted on the decision, with ANZ boss Shayne Elliott saying he was ­“disturbed” by the government’s protection of Qantas profits.

The Australian has been told 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.

“Well, it’s not up to me. It’s up to the Transport Minister, who’s made the decision,” the Prime Minister said.

“But there are decisions like this all the time. I can state there is nothing unusual about this.

“There is nothing unusual about a nation state not having ­access to unlimited flights where- ever they like to go.

“Australian airlines are restricted from where they fly into. And the former government made a very similar decision under minister (Michael) McCormack exactly as Minister King has.”

Decisions on air traffic rights between Australia and other ­nations do not usually go to cabinet. But Treasurer Jim Chalmers, Trade Minister Don Farrell, Home Affairs Minister Clare O’Neil and Foreign Affairs Minister Penny Wong were all unable to confirm by deadline on Tuesday that they were consulted over the decision taken by Ms King.

Ms King’s office instead said that she “consults with relevant colleagues on all matters, as ­appropriate”, but did not identify which colleagues she kept informed about the Qatar decision.

Internal frustration within Labor is growing over the political fallout from the rejection of the Qatar Airways bid and a failure to provide a clear explanation for it, given it was not a commercial decision. Ms King said on Monday it was “a decision that I have made as Minister for Transport in the ­national interest”.

Assistant Minister for Competition Andrew Leigh said that ­“national interest” was “one of those terms which is typically not defined in legislation that allows the decision maker to take a broad view right across the economy and right across society”.

The aviation sector will not be a key focus of a new competition taskforce established within Treasury, with Dr Leigh saying the “issue of airline competition is one that we explored in the forthcoming aviation green paper” to be released soon. Speaking at the QUT Business Leaders Forum in Brisbane on Tuesday, Mr Elliott said he was “disturbed” by reports the government knocked back Qatar’s request for additional flights in order to protect Qantas profits. His remarks follow comments by Assistant Treasurer Stephen Jones, who said the government did not want to drive airfares down to a level where it was unsustainable for the existing Australia-based carrier.

“I think that’s really disturbing and I don’t understand why one company is given that support,” Mr Elliott said. “This is a privately held, private enterprise company.”

While regulation was necessary, Qatar was a “safe, well-run airline” and Mr Elliott found it “a bit troubling to understand why they were blocked”.

Virgin chief executive Jayne Hrdlicka said airfares could come down by up to 40 per cent if Qatar Airways was allowed to schedule more flights into Australia and more capacity was returned.

“Airfares are about 50 per cent higher today than they were pre-Covid,” she told ABC radio.

“Airfares are abnormally high today … The statistics say that two thirds of the seats that we are flying in and out of Australia are back and one third of seats are not yet back.

“If we get those seats back, airfares will be as low as they possibly could be. You know, I guess that would be a reduction of at least a third, maybe a 40 per cent reduction in airfares.”

Ms Hrdlicka said it was a “nonsense” for Qantas to have argued the Qatar bid represented a distortion of the market when there was “such little capacity that’s ­recovered”.

Qantas chief executive Alan Joyce told parliament’s cost-of-living committee on Monday that allowing Qatar Airways extra flights into the country could have discouraged other carriers from increasing their capacity.

Qantas general secretary Andrew Finch repeated the claim on Tuesday before the House of Representatives standing committee on economics, saying that the significant capacity increases announced by Singapore Airlines and China Southern may not have happened if Qatar had been granted more flights.

“It’s quite possible those other airlines may not have been able to get their growth and capacity,” Mr Finch said, adding there was no guarantee more Qatar Airways flights would have cut airfares, adding that extra capacity by other airlines “more than compensated for those services”.

Nationals MP and former deputy prime minister Michael McCormack agreed with Mr Albanese that he did put “on hold” a bid by Qatar to “get more flights into Australia” when he became transport minister in 2018. But it was not because he concluded the proposal went against the national interest – it was because he was new to the job. “I was new to the role and I thought I needed to consult widely,” he said. “I’d gone from the outer ministry to deputy prime minister. I wanted to make the right decision. Eventually I made the decision to allow Qatar into Australia. They didn’t get everything they wanted. But we opened up more flights.”

Mr McCormack also said he would have expected Ms King to have discussed the Qatar Airways bid with the Prime Minister before making her decision, revealing that he often consulted with Mr Albanese when he was the minister. “I consulted the now Prime Minister a few times about aviation matters because he had a deep knowledge,” he said. “I respected his judgment.”

Opposition transport spokeswoman Bridget McKenzie took aim at Mr Albanese’s claim that he did not make the Qatar decision, arguing leaders should “take responsibility for their actions”.

During Mr Joyce’s appearance before a parliamentary hearing into the cost of living on Monday, it also emerged that the value of money held by Qantas in unclaimed travel credits for flights cancelled during the pandemic was not the $370m reported in the airline’s results.

Jetstar chief executive Steph Tully said it didn’t include $100m in travel credits yet to be claimed by passengers of the low-fares airline or overseas customers.