[Peetwo]

SADM Amendment Bill 2024: Report released - status quo remains IE Red Rat rules...

The last post highlights how QF and the Albo Govt believe that this amendment bill will little to no impact on the bottom line of QF's profit and operational capacity for YSSY airport, The RRAT inquiry report totally backs this up...

Via the RRAT webpages: https://parlinfo.aph.gov.au/parlInfo/dow...ntBill2024[Provisions].pdf

Committee view

2.41 The Sydney Airport Demand Management Act 1997, enacted by the Howard Government, has played an essential role in balancing operational capacity at Sydney Airport with community concerns around aircraft noise, as well as ensuring critical access to regional NSW cities and towns. However, evidence received during the inquiry makes it clear that, over time, this framework has become too restrictive – after over 25 years this is to be expected.

2.42 This amendment bill proposes a suite of reforms which will deliver operational efficiencies, improve market competition, and better consumer outcomes, whilst maintaining the original commitments made to the community around limiting and sharing aircraft noise.

2.43 The introduction of a recovery period is overwhelmingly supported by the sector and stands to benefit the travelling public. The efficient functioning of Sydney Airport is essential to the operation of the entire domestic network. Being able to clear an additional ten flights after a major disruption at Sydney Airport will have positive flow-on effects that go beyond just those ten aircraft movements at Sydney Airport. The committee is also reassured that safety will remain the overarching consideration when determining if, and when, these additional flights are authorised.

2.44 The committee understands that a definition for 'disruption' and thresholds that trigger the recovery period are still being determined and will be outlined in subordinate legislation. The committee recommends that the department continues to engage with all interested stakeholders on the drafting of the regulations.

2.45 The committee supports the bill's strengthening of the compliance regime. The additional civil penalty provisions introduced in the bill will better enable the Government to manage slot misuse at Sydney Airport.

2.46 The committee also welcomes the additional transparency powers introduced in the bill. These powers and airline reporting requirements will help ensure that the public has better access to information about airline performance.

2.47 The committee notes that the full details of these additional reporting requirements will be laid out in the regulations. The committee recommends that the department continues to engage with stakeholders, particularly smaller regional airlines, to ensure these additional reporting requirements are fit-for-purpose and do not impose an unnecessary burden on these businesses.

2.48The committee is satisfied that the Sydney Airport Demand Management Amendment Bill 2024 will support the government's commitment to enhancing competition and productivity in Australia's aviation sector.

Recommendation 1

2.49The committee recommends that the Senate passes the bill.


Senator Glenn Sterle

Chair

In other words...'nothing to see here, move along!!'

The Coalition did have some 'additional comments'...

Coalition Senators' additional comments

1.1 The Coalition continues to advocate for a more affordable, reliable and competitive aviation sector for all Australians. The Sydney Airport Demand Management Amendment Bill 2024 is the most significant change to the rules governing Australia’s biggest airport in nearly 30 years. The Bill aims to improve transparency, reliability and compliance, but it falls significantly short of delivering a more competitive ecosystem for all airlines.

1.2 The Sydney Airport Demand Management Amendment Bill 2024 is in direct response to the former Coalition Government’s review of the demand management scheme by former chair of the Productivity Commission, Peter Harris AO (the Harris Review).[1] The review’s recommendations had been with the Albanese Government for nearly two years before the Minister for Infrastructure, Transport, Regional Development and Local Government, Catherine King, announced on 21 February 2024 the Government’s response to the review.[2] At the time of this report, that is nearly nine months ago.

1.3 It is noted by Coalition Senators that the Albanese Government chose to delay the implementation of its response to the Harris Review (the Bill) until very late in the life of this Parliament and had sought to rush the Bill through the Senate without an inquiry until the Senate insisted. Even then, the Government nominated an unachievable reporting date and had to push out the tabling of this report by almost a week. The Coalition is also disappointed that there was only one hearing held into this very important aviation Bill and that the hearing was held in Canberra and not in Sydney. It is also noted that evidence to this inquiry suggested the regulations that are critical for the Bill to have effect would not be published until as late as April 2025.

1.4 The Coalition also notes that the lack of community consultation is a broken promise by the Albanese Government in regards to the implementation of these intended reforms.

1.5 The committee also learned that in the nine months since the Minister issued a press release outlining the intended reforms to the Sydney Airport Demand Management Scheme, and specifically committing the ‘Government will be consulting with community and industry organisations on the best way to implement these reforms ahead of bringing forward legislation to Parliament’[3], the Department of Infrastructure, Transport, Regional Development, Communications and the Arts did not consult with the local community. The Albanese Government’s failure to conduct community consultation does not align with the Bill’s purported purpose of enhancing transparency around the Sydney Airport Demand Management Scheme.

1.6 The Coalition supports enhancing transparency measures in the Bill and the regulations that will underpin the scheme. Coalition Senators encourage the Albanese Government to ensure the regulations include provisions to report regularly on the use of the recovery period and that any declaration is published and available to the public on the day it is made. The evidence presented to the committee is that without seeing the regulations, it remains unclear what would constitute a ‘significant disruption’ and on what or who’s advice would a declaration be made. At the time of publication of the report, the Government has not yet made clear the timing of the regulations. It is therefore incumbent on the Minister, for absolute transparency, to ensure that the regulations include a requirement for Airservices Australia to provide a regular report to the Minister on the compliance with the cap and the ongoing use of the recovery period, and that the report be tabled in both houses of Parliament within 15 days of receipt by the Minister.

1.7 Finally, Coalition Senators would note that whilst the Bill, and the yet unknown regulations, will deliver some improvements to the scheme, they do not address the full recommendations of the Harris Review.

1.8 A significant element of the Harris Review recommendations was to improve the settings of the Sydney Airport Demand Management Scheme to promote competition within the domestic market. As was noted by the ACCC on the same day as this committee’s hearing, the market share of Qantas and Virgin has now reached 98.4 per cent under the Albanese Government.[4]

1.9 Management of Sydney Airport slots has been identified by the ACCC as important to promoting competition. The regulator warned the Albanese Government of the impact of restricted access to Sydney Airport slots on domestic competition:

Access to take-off and landing slots during peak times at Sydney Airport is critical for airlines seeking to build an intercity network. The most effective way that the Australian Government could enhance airline competition for the benefit of consumers would be to implement reforms to the way Sydney Airport slots are allocated to airlines. Without these slot changes, there will not be any material improvement in domestic airline competition in Australia in the foreseeable future.[5]

1.10 In its November 2024 report on Domestic airline competition in Australia, the ACCC stated:

One of the reasons behind the reforms was to make it harder for airlines to hold on to more take-off and landing slots at the airport than they needed, therefore making more slots available for new and expanding airlines.

...

The ACCC considers that the measures announced in February 2024, if implemented effectively, would help support greater airline competition, and therefore, improved consumer choice.[6]

1.11The committee heard in evidence from Qantas, Sydney Airport’s largest holder of slots, that they do not anticipate being required to hand back slots as a result of reforms in the Bill.

Senator McKENZIE: What slots do you hold today that you'll need to hand back when the changes are actually in force, under the 'use it or lose it' rule?

Mr Zeglin [Head Commercial Strategy and Performance, Qantas]: None ...

Senator McKENZIE: There won't be any change? This bill will effect no change? Is that what your evidence is here?

Mr Zeglin: The clarity is—in terms of our slot holdings—at HBD [hand-back date], we intend to operate all of those slots.[7]

1.12From the evidence to the inquiry and the reading of the Albanese Government’s intended changes to the regulations, Coalition Senators are not convinced the reform would lead to any substantial increase in availability of slots for a future third domestic airline to compete at scale. Combine this with the slot guidelines that rank ‘Historical Rights’ before new entrants, plus no proposed changes to the ‘use it or lose it’ rules and it would be logical to conclude the Government’s reforms will likely remain ineffective in creating a more competitive slot system, and that Australian travellers will continue to suffer higher airfares and less choice under the Albanese Government...

Really? Kind of like being slapped with a wet lettuce as far as the Red Rat and the Albosleaze Govt is concerned...

MTF...P2