A lack of effective competition in Australia’s domestic airline industry has resulted in higher airfares and poorer service for consumers, according to a report from the Australian Competition and Consumer Commission (ACCC).
Chair of the ACCC, Gina Cass-Gottlieb said the final Airline competition in Australia found that reforming the legislative scheme that allocates take-off and landing slots at Sydney Airport would be the best way to promote competition in the industry.
“Access to peak time slots at Sydney Airport is critical for new and expanding airlines seeking to build an intercity network,” Ms Cass-Gottlieb said.
“Without legislative reform to the airport’s demand management scheme there will not be any material improvement in domestic airline competition in Australia in the foreseeable future,” she said.
“Sustained declining levels of customer service in the airline sector warrant the Government considering new regulatory incentives for airlines to invest in their customer service.
“There is a clear need for a truly independent and external dispute resolution ombuds scheme, which has the power to make binding decisions.”
Ms Cass-Gottlieb said the ACCC had also strongly advocated for reform to the consumer guarantees under the Australian Consumer Law, to make it illegal for businesses to fail to provide a remedy for consumer guarantees failures.
She said reform to the consumer guarantees to make them enforceable would dramatically improve incentives for all businesses, including airlines, to comply with their obligations and more effectively protect consumer rights.
Ms Cass-Gottlieb said the report also found that airlines’ service reliability had declined again and remained worse than long-term trends.
“The industry cancelled 3.9 per cent of all domestic flights in April 2023, which was higher than in January, and above the long-term average of 2.1 per cent,” she said.
“Nearly one-third of all domestic flights arrived more than 15 minutes late, compared to the long-term average of 18.5 per cent.”
The 30-page report can be accessed at this PS News link.
