Sydney Airport Slot Reforms to Boost Competition: The Travel Industry

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The Federal Government continues its commitment to fairer skies, launching a tender for the Sydney Airport Slot Manager role. This is part of broader reforms to the hub’s slot system management, which allocates daily time windows for aircraft to take off and land.

Addressing Anti-Competitive Behavior

The Sydney Airport slot system came under scrutiny last year for anti-competitive behavior that hindered smaller and new entrant airlines like Rex and Bonza. Following Bonza’s liquidation and Rex entering administration, these issues have taken center stage as reforms aim to optimize the 80 aircraft movements per hour cap at Australia’s busiest airport.

Prospective slot managers will need to demonstrate their ability to implement the reforms announced in February 2024, based on recommendations from the Harris Review and the Australian Competition & Consumer Commission (ACCC). Additionally, the competitive process will require applicants to manage and mitigate conflicts of interest transparently.

Upcoming legislation will include changes to the allocation process to free up more slots and redefine ‘new entrant’ to make it easier for new airlines to obtain slots.

Enhancing Compliance and Transparency

Aviation reforms already underway include an independent audit of slot usage and the re-establishment of the Compliance Committee for Sydney Airport to manage compliance with the slot system. Other reforms to the slot system demand management framework include:

• Modernizing the compliance regime with penalties addressing anti-competitive behaviors.
• Updating and strengthening enforcement tools.
• Requiring airlines to provide regular information on slot usage, such as reasons for cancellations or major delays, which will be regularly published.

Industry Reactions

The Australian Travel Industry Association (ATIA) has welcomed the government’s announcement on reforms to Sydney Airport slot management. “The reforms announced today by the Federal Government are a common-sense approach to improving competition in our aviation sector,” said ATIA CEO Dean Long.

“By opening up the process to appoint a new Slot Manager through a competitive tender, we are moving towards a more transparent and fair system that will benefit all airlines and, ultimately, consumers.”

However, Long noted that several previously announced reforms have yet to be implemented. “These include changing the allocation process to free up more slots and revising the definition of ‘new entrant’ to make it easier for new airlines to obtain slots,” he remarked. “We urge the Government to act on these reforms as soon as possible and call on parliament to support the necessary legislation.”

Supporting Competitive Growth

ATIA will continue to advocate for the 80-20 rule to deliver better outcomes for Australian travelers and the many travel businesses supporting them. “It is essential to modernize this benchmark to reflect current market conditions and support the growth of a competitive domestic aviation sector,” Long added.