The Albanese Government's first independent audit report into the domestic slot system at Sydney Airport has been released today, underscoring the need for the passage of the Sydney Airport Demand Management Amendment bill.
The Government announced the audit earlier this year, as part of sweeping reforms to build a more competitive aviation industry in Australia.
The report found that while there has been improvement in slot use following the pandemic, under the current guidelines, there was evidence airlines utilised the slot system to maintain their existing slots and optimise schedules.
The report concluded more effective regulatory oversight is required to ensure slot allocation is fair, efficient and transparent.
The Albanese Government last week passed the Sydney Airport slots legislation in the lower house, which would introduce stronger compliance and stricter penalties to crack down on slot misuse, with direct penalties for the behaviour found in the report.
The reforms were a key recommendation of the Harris Review which was handed to the previous Government in 2021 and never acted upon.
The Government urges the Opposition and the Greens to support the passage of the bill in the Senate to strengthen competition into the Sydney basin, a critical gateway for Australia's aviation market.
Other findings of the report include:
- The 80/20 'use it or lose it' rule (which incentivises airlines to use their slot at least 80 per cent of the time or lose the right to keep it) is less effective outside of peak hours.
- Slot allocations may appear more limited than they really are because more slots are being sought than end up being used.
- Airlines are not scheduling more flights than their existing aircraft fleet can service to safely meet demand.
- Routes with more flights, such as Sydney-Canberra, Adelaide, Melbourne and Brisbane see higher rates of cancellations, with airlines stating that cancelling on high-frequency routes is more effective for restoring network stability and minimising customer inconvenience.
- Airlines with existing slot holdings have an advantage in the slot allocation process, as they get first preference to change the time of their slots.
- Slot utilisation on domestic routes is improving as operating conditions return to normal post-pandemic, with non-utilisation halving from 17.8% to 8.1% (from October 2022 to March 2024).
This is the first time an audit of this nature is being made public, which is part of our Government's efforts to bring transparency into aviation competition.
The Bill now before the Senate increases the transparency around slot allocation and usage, introducing powers to enforce airline reporting and civil penalties for slot misuse.
We're making air travel work for passengers with the most significant competition and consumer protection reforms in aviation for over a decade.
The full audit report can be viewed at www.infrastructure.gov.au/infrastructure-transport-vehicles/aviation/airports/reforms-sydney-airport-demand-management-framework.
