The Qantas Group has released its response to the Federal Government’s Aviation Green Paper as part of a process to help shape a 30-year strategy for the Australian aviation industry.

The detailed submission recommends a number of reforms and gives the national carrier’s view on a range of questions posed by government – including on customer rights, decarbonisation, noise, future skilled workforce and airport regulation.

The full submission can be found here, with key highlights summarised below.

COMMENTS

Chief Corporate Affairs Officer for the Qantas Group, Andrew McGinnes, said: “Australian aviation faces some big questions over the next few decades and long-term thinking is needed to answer them. We welcome the Government’s willingness to do this work and seek a wide range of views in the process.

“Our submission makes a number of recommendations about reform, including the need for a local sustainable aviation fuel industry, guardrails for airport price setting and more efficient regulation.

“Qantas’ own service standards have improved a lot since the post-COVID restart and we know there is still more work to do. Our submission calls for careful thought around permanent policy changes in response to what was an unprecedented and temporary shock for the aviation industry as it came through the pandemic.

“Aviation globally will continue to grow and that means we need a local skills pipeline to support it. The Qantas Group already has a pilot academy and we’re building an engineering academy as part of this, and are keen to work with government on policies that encourage more people, and especially more women, to choose these careers.”

SUSTAINABILITY

Decarbonising aviation is critical to Australia’s broader emissions reduction targets. As the global community shifts, our ability to fly to several key offshore markets will start to be restricted from 2030[1] without significant action.

With zero emissions technology such as electric aircraft or green hydrogen still decades away, sustainable aviation fuel (SAF) remains the key tool that airlines have for decarbonising aviation and achieving net zero emissions by 2050.

Deliberate policy steps are required to create a SAF industry and a number of countries (including in the United States, United Kingdom and Europe) have introduced a mix of mandates for airlines and subsidies for producers in recent years.

The Qantas Group is investing to help develop a domestic sustainable aviation fuel industry, which has the potential to ultimately create tens of thousands of jobs and investment, particularly in regional Australia, and increase Australia’s domestic fuel security.

Key policy recommendations are:

Setting sustainable aviation fuel mandates for the domestic jet fuel supply, including 5 per cent by 2030 rising to 28 per cent by 2040.
Providing capital support to kickstart new production facilities.
Implementing a production incentive linked to carbon reduction from fuel to allow domestic producers to compete with overseas markets.
Providing tax incentives and credits to SAF producers, similar to what occurs in other government programs.

While the Group’s fleet renewal program will drive a material reduction in emissions in the years ahead, immediate improvements could be unlocked through relatively small changes to air traffic control and airspace management. For example, if Qantas Group flights between Brisbane and Melbourne, and Brisbane and Sydney, were each reduced by one minute, this would reduce emissions by over three million kilograms each year.

IMPROVING CUSTOMER EXPERIENCE

Qantas recognises the impact that delays, cancellations and a range of other operational issues had on travellers during the post-COVID restart. Service levels during this time were a far cry from the standards the Group traditionally delivered. While there is still work to do, there has been a significant improvement to operational performance. In addition, Qantas has made changes to its complaint handling process and there is a pipeline of further investment in service delivery (see here).

Separately, the Airline Customer Advocate (which is jointly funded by domestic carriers) is being overhauled through an increase in resourcing and other enhancements.

The Qantas Group believes that making permanent changes to the industry in light of a temporary and unprecedented set of circumstances (namely, post-COVID service failures) risks a range of unintended consequences.

The proposal to introduce a mandatory compensation scheme doesn’t address the core drivers of delays and cancellations (which already represent a significant cost to airlines) and is likely to lead to higher fares and make marginal routes less sustainable. A similar scheme in place in Europe hasn’t led to a reduction in disruptions, with recent on-time-performance below Australia’s[2].

AIRPORT REFORM

Australian airports are effectively unregulated monopoly infrastructure. While their owners deserve to make a reasonable financial return, the Group’s submission highlights examples of ‘Airports Behaving Badly’ due to the lack of checks and balances on their conduct around contract negotiation.

Modest reform within the existing light-handed regulatory framework will unlock immediate benefits and place downward pressure on fares.

After airports rejected a mutual code of conduct with airlines in 2022, the Qantas Group calls for access to an independent and binding dispute resolution to deliver meaningful reform and mandating the Aeronautical Pricing Principles (which are non-binding and routinely ignored) across all airports.

The Qantas Group has again confirmed its broad support for reforms to the slot system at Sydney Airport as recommended by the Harris Review, and rejected suggestions it is hoarding slots. A one page explanation can be found here.

NOISE

The Qantas Group believes a more balanced approach is required to aircraft noise at airports.

The most effective way to reduce aircraft noise is by operating modern aircraft which can have a 50 per cent reduction in noise footprint. We support incentives such as a noise dividend whereby flying quieter aircraft could facilitate increased movements and avoid operating restrictions.

Efforts to reduce noise at some airports currently results in inefficient flight paths that lead to higher emissions and a worse environmental impact – a dynamic that needs to be balanced. For example, Air Services estimates that manoeuvring aircraft over water at Brisbane Airport to minimise noise adds 37 nautical miles and creates an additional 700 kilograms of carbon emissions per flight.

Current regulations on overnight freight operations at Sydney Airport that date back to 1995 specify two aircraft types that are allowed to operate these services – the BAE-146 and DC9. The more modern of the two, the BAe146, was designed in the 1970s, ceased production in 1993 and have been overtaken by newer, quieter aircraft that are already in Qantas Freight’s fleet. Modernisation of these regulations would deliver better noise and emissions outcomes, particularly ahead of the curfew-free Western Sydney Airport opening in late 2026.

[1] SAF mandate in place in the European Union with SAF mandates proposed in the UK, Japan and India.

[2] Based on narrow-body operations within Europe compared with domestic Australian operations; see page 14 of submission.