Opening up almost all major Australian airports to unlimited access for international airlines could help to drive prices down, the Productivity Commission has told senators in a push to liberalise the market.
The commission was one of several stakeholders to back easing restrictions in submissions to the Senate’s inquiry into the federal government’s decision to block Qatar Airways’ request for more flights into Sydney, Melbourne, Brisbane and Perth.
The move has been criticised by some as an attempt to protect Qantas at the expense of higher costs for Australian travellers and reduced spending by tourists.
Prime Minister Anthony Albanese and Transport Minister Catherine King have defended the decision as being in the national interest.
King also said the 2020 strip-searching of several Australian women at Qatar’s Doha Airport was “factor” in the decision, having previously said it was not.
In its submission, the Productivity Commission reiterated calls to eventually remove all restrictions on international flights into Brisbane, Melbourne and Perth.
“As in all markets, restrictions on access to aviation markets can impede competition between airlines, reducing the range and quality of services offered, discouraging innovation and increasing prices,” it argued.
“These effects are ultimately felt by the community, particularly passengers travelling abroad, tourism operators and users of international freight services.
“But the extent to which these effects are experienced depends on whether capacity limits are binding”.
The tourism chapter of the Australian Chamber of Commerce and Industry also backed opening up airports further, pointing to Tourism Australia analysis pegging flights to Europe as 49 per cent higher than before the pandemic.
The reduced airfares would likely reduce Qantas’ profits but, he argued, the drop would be “relatively minor”, with prejudices falling mostly on foreign airlines.
Forsyth cautioned the astronomical projections of potential losses from the Qatar decision should be taken with a grain of salt as actual “net” figures were likely 5-10 per cent of that gross spend.
Qantas did not make a submission to the inquiry, submissions to which closed on Monday ahead of upcoming hearings starting on Friday.
The Board of Airline Representatives Australia, which says it represents airlines operating about half of the international capacity to Australia, said it supported “open access wherever possible”.
(9 NEWS)
