ATIA supports the continued policy of negotiating bilateral air service agreements that provide ‘capacity ahead of demand’, as current capacity constraints on routes with strong demand have resulted in higher prices for Australian consumers. The most effective option to increase capacity and allow it to adapt to demand variation over time is the negotiation of adequate capacity limits that offer significant margin for growth.
A clear framework for the process of air service agreement application/negotiation and an unambiguous written decision outlining the weighting of factors considered is required to ensure that investments can be made to efficiently deliver benefits to the Australian economy and community.
We make 9 recommendations:
Recommendation 1: The factors pertaining to a consideration of the national interest should be clearly defined. National interest should not be a reason in its own right. The decision and rationale cannot be withheld from the public and the approving authority must justify the reasons why they agree or disagree with the expert advice.
Recommendation 2: The ACCC must review and publicly release its assessment of the consumer benefit of each bilateral application. It is the only government agency which can assess competition settings and ultimate consumer impacts.
Recommendation 3: The travel and tourism industry, airports and airlines and other export sensitive industries as relevant, must be provided equal opportunity to review each bilateral request and make recommendations.
Recommendation 4: Australia should seek to increase the number of open skies arrangements with likeminded Indo-Pacific countries to increase competition to lower prices for Australians and international travellers who wish to visit Australia.
Recommendation 5: Globally, consumer rights have been strengthened following the performance of airlines regarding cancellations and credits during COVID. Reform is needed to simplify refund rights where a flight is cancelled and passengers are not accommodated on the same day.
Recommendation 6: A review of domestic aviation market and contracts between airlines and agents. This review will seek to identify any unfair trading practices which are not prohibited by existing provisions of Australia’s consumer laws but which can nevertheless distort competition.
Recommendation 7: ATIA maintains that authorisations of airline coordination agreements should be conditioned upon robust analysis of the benefits and detriments of the agreements.
Recommendation 8: ATIA supports a competitive market for airport slots that allows entry for increased capacity to put downward pressure on the prices of air tickets. Consideration should be given to increasing threshold for domestic slot use to 90% within 2 years and 95% within 5 years.
Recommendation 9: ATIA maintains that quarterly reporting by the ACCC is of critical importance to tracking the overall health of the domestic aviation sector. Reporting should be immediately re-established and should also include slot usage rate for airlines at all airports operating slot management systems.
View Submission
The Minister for Trade and Tourism, Senator the Hon Don Farrell, requested the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT), through its Trade Subcommittee, to inquire into Australia’s tourism and international education sectors.
AFTA members play an important role in facilitating bookings of inbound and outbound travel, accommodation and related services, which contribute to the tourism industry in Australia. As the peak body for a broad array of Australian travel professionals, AFTA is uniquely placed to comment on the challenges and opportunities for growth in tourism. AFTA strives to promote competition across the entire tourism sector, alongside world-leading practices to ensure an efficient and positive traveller experience.
Our submission brings together AFTA’s established and long-term policy positions as well as our recent positions on the key areas of:
- Importance of outbound travel,
- Taxation (PMC),
- Requirements for additional skills funding,
- Importance of ATAS,
- Support of Smartraveller,
- Passenger facilitation,
- Airline carrier coordination,
- Airport slot usage,
- Importance of business travel,
- Climate change.
AFTA has submitted to the ACCC this submission seeking clarification on a number of issues regarding ultimate outcomes for consumers.
Information about the application:
Qantas Airways Limited (Qantas), its related bodies corporate and Jetstar Airways Pty Limited (Jetstar) (together, the Applicants) seek revocation of authorisation AA1000395 and substitution for a new authorisation AA1000626 for the continuation of coordination involving Qantas and Jetstar branded low cost carriers and, in certain circumstances its full service airline shareholder, Japan Airlines Co. Limited, in the Asia-Pacific region.
AFTA has submitted to the ACCC this submission seeking clarification on a number of issues regarding ultimate outcomes for consumers.
Information about the application:
Qantas Airways Limited (Qantas) & China Eastern Airlines Corporation Limited (China Eastern) (together, the Applicants) and their related bodies corporate seek revocation of authorisation AA1000526 and substitution for a new authorisation AA1000624 for similar conduct, administered through an Extended Joint Coordination Agreement. The Extended Joint Coordination Agreement would permit Qantas and China Eastern to continue their alliance and coordinate on operations between Australia and mainland China beyond 31 March 2023 when the current authorisation is due to expire.
AFTA has submitted to the ACCC this submission seeking clarification on a number of issues regarding ultimate outcomes for consumers.
Information about the application:
The Applicants also seek interim authorisation on the basis that the existing authorisation will expire on 31 March 2023, such that the Applicants can continue to discuss and plan while the substantive application for re-authorisation is being assessed by the ACCC.
Under the Restated MCA, Qantas and Emirates propose to cooperate for a further period of five years across their global networks, including in relation to:
- planning, scheduling, operating and capacity
- sales, marketing, advertising, promotion, distribution strategies, reservation priority and pricing for passengers, freight customers and agents
- connectivity and integration of certain routes
- codeshare and interline arrangements
- control of inventories and yield management functions
- frequent flyer programs
- all passenger-related aspects of service to customers, including ground services and lounge access
- harmonising service and product standards in order to provide a seamless product to passengers
- harmonising IT systems
- joint airport facilities
- joint offices for sales activities
- potentially other aspects of operations including ground handling, joint procurement and flight operations
- where appropriate and mutually agreed, making joint submissions to authorities on operational matters
- services and activities that are required to facilitate any of the matters referred to above.
Re-authorisation is sought until at least 31 March 2028.
AFTA's 2022-2023 Pre-Budget Submission calls for a Travel Sector Skills Retention and Impaired Recover package of $190 million to support the continued recovery of the travel sector.
The Submission highlights the fact that the travel industry remains in a stage of significantly impaired recovery due to the ongoing effects of COVID-19.
AFTA's 2020-21 Pre-Budget Submission with Treasury, urgently calls for a Sector Specific Support Package of $125 million as a result of COVID-19.
The Submission highlights the fact that travel agents, tour operators and travel wholesalers are on the pandemic frontline supporting consumers while being among the worst hit of Australian businesses with 90%-plus revenue drops and little sign of real recovery without the resumption of international travel.
On Thursday 19th March AFTA lodged AFTA’s Travel Industry Emergency Package COVID-19 Response with the Coronavirus Business Liaison Unit within Federal Treasury. AFTA is working with lobbyists to brief key decision makers within Government and the Opposition including the PM, Treasurer, Finance Minister, Opposition Leader and Treasury.
The submission outlines 8 key measures which the Government must enact to provide immediate relief to struggling businesses in desperate need of cashflow.
We are also making sure they understand the unique challenges the travel sector faces in terms of the purchase cycle, and the fact that the sector is more than just airlines.
AFTA’s 2020-21 Commonwealth Pre-Budget Submission details initiatives that will support the growth of the travel and tourism sector, while also supporting the Government’s plan to bring the budget back to surplus.
The submission calls for the continuation of a freeze on the Passenger Movement Charge (PMC), along with supporting current levels of Government appropriation and support for the Department of Foreign Affairs, Consular Services and passenger facilitation.
In light of the recent devastating Australian bushfires, AFTA urges to Government to ensure the appropriation of funds from the National Bushfire Recovery Fund include ATAS accredited Australian based travel agency businesses for distribution arrangements, who are committed to advocating for the benefits of domestic tourism.
In the 2018-19 Budget, the Government announced it would introduce an economy-wide cash payment limit of $10,000 for payments made or accepted by businesses for goods and services. Transactions equal to, or in excess of this amount would need to be made using the electronic payment system or by cheque. The Black Economy Taskforce recommended this action to tackle tax evasion and other criminal activities.
The Government released for public consultation exposure draft legislation and accompanying explanatory material to implement the economy-wide cash payment limit from 1 January 2020 and for certain AUSTRAC reporting entities from 1 January 2021.
You can read the exposure draft legislation here: https://www.treasury.gov.au/consultation/c2019-t395788
In February 2018, the Australian Government established the Beyond Tourism 2020 Steering Committee to shape Australia’s next long-term tourism strategy to commence in January 2021.
The Beyond Tourism 2020 Steering Committee submitted its report to Government in December 2018, and in February 2019 a consultation processes was launched to seek industry and governments’ views on the report.
AFTA continues to maintain a strong position on not lifting the PMC, reforming the Tourist Refund Scheme and ensuring holistic approach is undertaken to market development.