Australians would be better served if international airlines were granted greater access to the nation’s capital cities, as more competition could drop prices, the productivity commission says.
Acting chair Alex Robson said while the current arrangements had served Australia well, there was room for improvement.
“There would be benefits from further liberalising air services. And second, for quite some time now, there has been a need for more transparent cost benefit analysis in decision making in this area,” he told a parliamentary committee on Tuesday.
A snap Senate inquiry was formed in the wake of revelations the government knocked back Qatar Airways’ request to double capacity to Australia’s capital cities.
The committee is examining the role Qantas’ lobbying played in the decision and Australia’s bilateral air agreements.
Dr Robson declined to comment on what else could be done to bring down prices for Aussies given the productivity commission had not been tasked to look at the issue.
But less competition from international carriers can result in consumers paying “higher prices for worse service”, he said.
“Restrictions on access to aviation markets can impede competition between airlines, which matters because it can harm the community in many ways,” Dr Robson said.
“Less competition can mean that airlines offer fewer or lower quality services and charge higher prices. As a result, Australians may pay higher prices for worse service.
“Inbound tourism may also suffer, which harms Australian tourism operators and the broader economy.”
Asked how long it would take the government to run a cost-benefit analysis every time it considers landing rights applications, he estimated it would take less than six months.
“The more transparent you can be, the better,” he said.
Transport Minister Catherine King has defended her decision to knock back Qatar, insisting it was made within the national interest.
In a submission to the inquiry, the Qatar Civil Aviation Authority revealed it had requested consultations with the federal government last month.
But a meeting, which the QCAA said would help it “better understand the reasons for the decision” and to “build a road map” for the future, has yet to be locked in.
“On 25 August 2023, the Department informed us that our request for consultations was under consideration and indicated that they would respond as soon as possible,” it said.
“We sincerely hope that the Department will agree to schedule consultations as a matter of urgency and priority.”
The QCAA also lashed Qantas and partner airline Emirates for lobbying against Qatar’s push for additional 28 flights into Sydney, Melbourne, Brisbane and Perth.
“Qantas has no reason for making such negative statements, except for the benefit of their commercial relationship with Emirates,” it said.
“Unfortunately, it is evident that both airlines are interested in blocking Qatar Airways’ growth in Australia.”
The comments were included in the submission but were made in a November 2022 pitch to the government which was not for public circulation.
It said Qatar’s 28 weekly flights compared to Emirates’ 84 and Etihad’s 63 flights, and the airline was subjected to stricter competition requirements.