By Paul Sakkal
The stranglehold that Qantas holds over the $250 million market for politicians, staffers and public servants is costing taxpayers tens of millions of dollars a year while the rules to take the cheapest available flight are being broken, according to competitor Virgin.
Prime Minister Anthony Albanese and former Qantas chief Alan Joyce.Credit: Getty
Virgin made the claim in January in a submission to the government’s Aviation White Paper, which sets out a course for the industry for the next 25 years, and provided figures to back its claims.
The Coalition is now demanding the cheapest-fare rule be adhered to, pushing more MPs and staff onto the flights of Virgin, which likewise has been stressing the importance of the rule, which is now being reviewed by the Finance Department.
Flying in the face of the policy, more than 90 per cent of the nearly $30 million spent by MPs and their staff on travel last year went to Qantas and its subsidiary Jetstar, according to the Independent Parliamentary Expenses Authority. That figure is an increase on the 75 per cent share Qantas had in the previous decade.
Peter Dutton says his office asked to use Gina Rinehart’s private jet.Credit: Hancock Prospecting
When public servants are counted, Virgin said in its submission to the government’s Aviation White Paper that it wins only 23 per cent of the estimated annual spend of $250 million in government flights, despite its flights being up to 30 per cent cheaper. It further argued that the political class taking work flights should not be eligible for so-called Qantas “status credits” – which are basically a points system giving frequent flyers access to better travel benefits and services.
The move comes after a week in which Prime Minister Anthony Albanese has battled daily questions about his 22 flight upgrades over the years on Qantas and his relationship with former Qantas chief executive Alan Joyce.
Although virtually all MPs get Qantas upgrades free and many are members of its Chairman’s Lounge, Opposition Leader Peter Dutton said Albanese was different in that he personally called Joyce for upgrades. Albanese denied calling, texting or emailing Joyce for upgrades, or getting a staffer to do so, and pointed to Dutton asking to fly on the private jet of billionaire Gina Rinehart.
Coalition transport spokeswoman Bridget McKenzie said on Saturday that Labor had done nothing to make sure public officials were following the travel policy and selecting the lowest fare.
“The prime minister just wants to protect his favoured, dominant airline,” she said. “Labor has allowed the government’s contracted travel provider to consistently favour Qantas.”
Nationals senator Bridget McKenzie (centre) questions Qantas chief Vanessa Hudson (left) and then-chairman Richard Goyder last year.Credit: Alex Ellinghausen
McKenzie was dragged into the story herself this week when she denied taking an upgrade, then had to admit she had.
McKenzie argued the review into travel rules being conducted by the Finance Department was unnecessary because the problem was obvious and easily fixable. This travel rule review was announced in September in response to the Aviation White Paper, which was released in August.
“They just need to act to ensure the government’s travel provider offers public servants the lowest-cost practical fare the first time, rather than offering Qantas as the default,” McKenzie said.
A Finance Department spokesman said the review should be completed by year’s end.
Debate about Qantas’ influence over government decision-making, which featured the denial last year of flight rights to Qatar Aiways (to the benefit of Qantas and its partner Emirates), flared last week when a book by journalist Joe Aston, formerly of The Australian Financial Review, alleged Albanese repeatedly sought upgrades from former Qantas boss Alan Joyce for personal overseas holidays.
Virgin, which competes against Qantas and its subsidiary Jetstar, said in that January submission that its fares were approximately 30 per cent cheaper on average, meaning the lowest-fare policy was being breached and the government was overspending on flights by tens of millions of dollars.
“These spending patterns serve to entrench Qantas’ dominance and deny Virgin Australia a real opportunity to attract government and corporate passengers,” its submission said.
“The pervasiveness of Qantas Chairman’s Lounge Membership amongst Australians of influence, including politicians, also sheds light on these decisions.”
When MPs or their staff want to book flights they use a private travel service, which provides flight options and then books the flight. Several MPs said the travel agency often gave no option other than Qantas flights, even though they were not the cheapest and other flights were available at a similar time.
Special Minister of State Don Farrell, who is responsible for parliamentary expenditure, has said previously that flights are booked through a service run by Corporate Travel Management, The Australian Financial Review reported last month.
“Parliamentarians are personally responsible and accountable for their use of public resources and should be prepared to publicly explain and support their decisions to use public resources, including airfares,” Senator Farrell wrote in response to questions from Tasmanian Senator Jacqui Lambie, who had requested the Independent Parliamentary Expenses Authority figures from the government.
“Staff of parliamentarians travel as directed by their employing parliamentarian and must travel in accordance with the conditions as outlined in their employment framework.”
The government policy allows a higher fare to be picked if no other appropriate flights are available. Qantas is the only carrier for some less-travelled routes such as Canberra to Perth.
While the $250 million yearly government spend is a small segment of Australia’s overall aviation market, the profit margin on corporate travel is high and filling out the business class section is financially important to airlines.
Virgin added in its submission: “Over and above that, these spending patterns serve to entrench Qantas’ dominance and deny Virgin Australia a real opportunity to attract government and corporate passengers, with flow-on effects for leisure services and the attractiveness of the Velocity program.”
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