Federal Government decision to deny Qatar Airways extra flights to protect Qantas costing $400 extra in airfares

Queenslanders could be paying as much as $400 more for a return flight to Europe due to the federal Government’s rejection of Qatar Airways extra flights into Australia, a Senate probe has been told.

Queenslanders could be paying as much as $400 more for a return flight to Europe due to the federal Government’s rejection of Qatar Airways extra flights into Australia.

A Senate inquiry was told yesterday that allowing the flights could have made airfares 10 per cent lower.

Airline Intelligence and Research chief executive Tony Webber told a Sydney hearing on Tuesday that ticket prices would have dropped “between 7 and 10 per cent” if Transport Minister Catherine King had granted Qatar Airways an extra 21 flight services.

He estimated the July move cost Australia’s tourism ­industry $1bn and drove up ­aggressive competition between airlines.

“There is a material amount of market dominance from Qantas,” Dr Webber said.

The Senate inquiry examined the government's decision to knock back Qatar Airways’ application.

The inquiry heard there is ”a material amount of market dominance from Qantas”. NCA Newswire / Gaye Gerard

Brisbane-based Flight Centre CEO Graham Turner flagged skyrocketing air prices, with tickets to Greece 90 per cent higher than in 2019, and flyers to the UK facing a 75 per cent increase.

“Airlines are certainly taking advantage that demand is exceeding supply, and that’s very much been the case for the past 12 months,” Mr Turner said.

Another industry insider told The Courier-Mail earlier this month: “You can’t get a return flight to Europe out of Brissie for anything under $4000 – it was $2000 (pre-pandemic).

“Business-class seats are up about 60 per cent.”

The inquiry heard from Sydney Airport boss Geoff Culbert, who urged intervention on “slot hoarding”, a process where airlines bid for all unallocated slots and deliberately do not fly as a tactic to block competitors looking to introduce a rival service.

He said that 40 aeroplane slots were wasted per day due to outdated air services agreements, causing rampant flight delays and cancellations.

“Cancellation rates are too high, access to slots are way too low, and the travelling public are the ones who are paying the price,” Mr Culbert said.

Qatar Airways was denied the opportunity to increase the number of international flights to Australia. (Photo by Karim JAAFAR / AFP)

The airport chief told senators aviation was a cutthroat industry that bred a tough culture in organisations and that this was particularly evident in his interactions with Qantas.

“We don’t always see eye-to-eye on every issue,” Mr Culbert said.

“It’s no surprise to anyone if I said that they always had a strong presence in Canberra … and they are a robust counter party for us to negotiate with.”

Mr Culbert also flagged that he had raised Qatar’s request for extra flight services into Sydney when he met with Transport Minister Catherine King in March.

Commenting on the “muscularity” of Qantas lobbying efforts, inquiry chair Senator Bridget McKenzie said that it was “inconceivable” that Ms King was unaware of Qantas’ motivation to protect its market shares when blocking the application.

The committee will hold hearings in Sydney, Perth, Brisbane and Canberra, with a final report due by October 9.

Originally published as Federal Government decision to deny Qatar Airways extra flights to protect Qantas costing $400 extra in airfares