Sydney Airport’s call for Qantas and Virgin Australia to make room for rivals at the gateway

Sydney Airport’s boss wants Qantas and Virgin Australia to give up precious slots to allow other airlines to fly out of the gateway.

Sydney Airport has called for Qantas and Virgin Australia to make room for other airlines at the gateway by giving up precious slots.

Airport boss Geoff Culbert issued the call on the back of new passenger data, showing numbers on key domestic routes such as Sydney-Melbourne are still well down on 2019 levels.

Mr Culbert said if incumbent airlines were flying less on those routes, they should give up their slots to other domestic carriers or international airlines seeking to operate out of Australia’s biggest gateway.

Slots are allocated to airlines at capacity constrained airports like Sydney, allowing them a specific period for takeoffs and landings. Under current rules, airlines must use their slots in Sydney at least 80 per cent of the time in order to keep them.

Mr Culbert has previously accused the major domestic airlines of “slot hoarding” in order to stop new carriers such as Bonza and Rex from gaining a foothold in Sydney.

June passenger traffic released by Sydney Airport on Thursday, showed a mere 1.2 per cent increase in domestic travellers compared to June 2022.

At the same time, international passenger numbers jumped 66.7 per cent.

Overall airport traffic was at 89.9 per cent of 2019 levels, with domestic at 90.6 per cent and international at 88.8 per cent. Just over 3 million people passed through the three terminals in June, compared to 2.84 million in the same month last year.

“The international passenger recovery is now close to surpassing the domestic recovery, which has remained largely stagnant over the last year,” said Mr Culbert.

“Steep airfares and high cancellation rates on popular domestic routes are suppressing demand.”

Mr Culbert noted that in “the 12 months to June, passenger numbers on the Sydney to Melbourne route were just 81 per cent recovered compared to pre-pandemic levels, while numbers between Sydney and Canberra were only 64 per cent recovered”.

“It will be interesting to see if this is a long-term trend,” Mr Culbert said.

“If incumbent airlines have decided to fly less between key domestic markets, then they should relinquish slots to domestic and international carriers who want to operate out of Sydney Airport and provide more choice for customers.”

Despite huge crowds in holiday periods, Sydney Airport is still seeing about 10 per cent fewer passengers than before Covid-19. Picture: Justin Lloyd

The surge in international travellers was being aided by the strong return of Chinese travellers, who were already back to 69 per cent of pre-Covid-19 numbers just six months after borders reopened.

Mr Culbert said that was a “phenomenal result”.

“As demand grows, the seven Chinese carriers operating out of Sydney are continuing to add capacity, with 51 return services now flying weekly,” he said.

As of Wednesday, China Eastern had resumed non-stop flights from Sydney to Nanjing and Wuhan, and Qantas was set to restart daily Sydney-Shanghai services in October.

Prior to the pandemic, Chinese travellers were Australia’s biggest source of inbound visitors and the most valuable, spending more than $12bn annually.

According to Bureau of Statistics data for May, Chinese visitors now ranked fifth overall behind short-term arrivals from New Zealand, the US, India and Singapore.

Tourism Australia’s $125m “Come and Say G’Day” campaign was only launched in China last month, in the hope of further accelerating the return of Chinese visitors down under.

Originally published as Sydney Airport’s call for Qantas and Virgin Australia to make room for rivals at the gateway