Qantas cancelled flights partly to retain takeoff and landing slots at Sydney airport, ACCC claims

Qantas cancelled flights to retain takeoff and landing slots at Sydney airport, among a raft of other reasons that were “within its control”, an in-depth investigation conducted by Australia’s competition watchdog has alleged.

The allegation levelled by the Australian Competition and Consumer Commission chair, Gina Cass-Gottlieb, bolsters claims from critics that Qantas and its budget carrier Jetstar have been strategically scheduling then cancelling domestic flights out of Sydney airport to prevent competitors from introducing rival services.

The ACCC’s allegation, determined through an investigation into Qantas flight cancellations between May and July 2022, stands in stark contrast to denials of so-called “slot hoarding” by the airline’s executives before two separate parliamentary committee hearings this week.

On Tuesday, Qantas’s general counsel, Andrew Finch, said “we completely reject these assertions which are broadcast without a skerrick of evidence”.

Announcing the results of the ACCC investigation on Thursday, Cass-Gottlieb said: “We allege that Qantas made many of these cancellations for reasons that were within its control, such as network optimisation including in response to shifts in consumer demand, route withdrawals or retention of takeoff and landing slots at certain airports.”

The investigation – which saw Qantas serviced with compulsory information notices – also found the national carrier was advertising and selling tickets for more than 8,000 flights that it had already cancelled in its system during the three-month period in mid-2022. The ACCC is taking legal action against Qantas for its conduct after deciding to cancel the flights, but those alleged breaches do not relate to improper cancellation of flights.

In an interview with Guardian Australia, Cass-Gottlieb confirmed the alleged cancellations to retain slots involved Sydney airport, where legislation limits the airport to 80 movements an hour.

The ACCC has long supported reforms to the Sydney airport slot system, including those flagged by the government-ordered Harris review in 2021 calling for more thorough scrutiny of cancellation reasoning and easier access for new entrants. The review has not been acted upon by the current or former government.

Asked if the government should consider responding to the Harris review as a matter of urgency given the investigation’s findings, Cass-Gottlieb said “the ACCC definitely does think that”.

Critics, including Sydney airport, Rex Airlines and Bonza, point to stubbornly high cancellation rates out of Sydney – on average, almost one in 10 Sydney-Melbourne and Sydney-Canberra flights are cancelled – as proof of the practice. However, current rules allow an airline to retain its slot so long as it does not exceed a 20% cancellation threshold.

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Several sources who spoke to Guardian Australia on the condition of anonymity were buoyed by the investigation, and suggested Thursday’s revelation would bolster the case for urgent reforms of Sydney airport’s slot system.

Geoff Culbert, the CEO of Sydney airport, said the ACCC’s investigation vindicated what the airport had been calling out for six years.

“These allegations provide even more justification to implement the findings of the Harris review, including an immediate forensic audit into cancellations and slot misuse, a beefed-up compliance regime, and an enforcement process that punishes misbehaviour.

“Slots are owned by Australian taxpayers and they should be used to benefit the public, not incumbent airlines,” he said.

James Goodwin, the CEO of the Australian Airports Association, welcomed the action and said it “confirms what many have been raising for some time”.

“Scheduled and coordinated cancellations not only affect airline customers but disrupt airport operations. At airports where slots are at a premium this can have the effect of limiting other airlines from using those potential runway allocations,” Goodwin said.

Qantas said it “takes these allegations by the ACCC seriously”. Guardian Australia has contacted Qantas for comment related to the allegations of cancelling services to retain slots.

The transport minister, Catherine King, was also contacted for comment.