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Australian Government to Introduce Slot Reforms at Sydney Airport to Boost Competition

By  |  August 6, 2024

The Australian government announced on Monday its intention to introduce new rules to free up more takeoff and landing slots at Sydney Airport. The initiative aims to make it easier for new airlines to secure slots, thereby boosting competition at the country’s busiest airport.

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    This announcement comes approximately a week after Regional Express Holdings, a regional airline, cut hundreds of jobs and entered voluntary administration. This marks the second small airline to face such a fate this year, further consolidating Australia’s aviation market.

    According to Reuters, the tender process for the Sydney Airport Slot Manager will commence on Monday. Prospective firms must demonstrate their ability to manage and mitigate conflicts of interest transparently, Transport Minister Catherine King stated. “Once appointed, they must comply with a statement of expectations including governance and transparency requirements,” King said in a statement.

    Australia’s competition regulator has been advocating for reforms in how airlines are allocated flight slots, particularly on busy domestic routes. Critics argue that Qantas and Virgin control these routes, effectively barring new entrants. Currently, the company administering flight slots at Sydney Airport is majority-owned by Qantas and Virgin, who reject these accusations.

    Qantas and Virgin Australia together dominate approximately 90% of Australia’s airline market. In April, budget airline Bonza collapsed, and its fleet was repossessed by creditors, further tightening the duopoly.

    Per Reuters, the Sydney Airport slot reforms were initially proposed by the government in February. Legislation to finalize these reforms is expected to be introduced in Parliament soon, King added.

    Source: Reuters