Qantas flight credits: Albanese says customers should get another flight or their money back

The Australian government has defended its decision to block Qatar airways from almost doubling its flights to Australia, but has distanced itself from Qantas by insisting the national airline should compensate customers for pandemic flight credits.

On Tuesday Prime Minister Anthony Albanese responded to consumer anger about $470m of unclaimed Qantas and Jetstar flight credits, and the assistant minister for competition, Andrew Leigh, called for the introduction of more low-cost carriers to bring prices down.

Meanwhile, Qantas has acknowledged it has been scheduling more domestic flights than it can actually operate, but denied doing so deliberately, as critics allege. Its representatives were grilled at a parliamentary inquiry into promoting economic dynamism. That came a day after its outgoing chief executive, Alan Joyce, faced tough questioning at a separate Senate committee.

The transport minister Catherine King’s decision to reject a request from Qatar to fly an additional 21 services into Australia’s major airports has renewed interest in the political power of its corporate rival, Qantas.

The opposition leader, Peter Dutton, has targeted Labor, accusing it of “running a protection racket” for Qantas. The controversy was fuelled also by the assistant treasurer, Stephen Jones, arguing on Monday that Qantas’ financial viability was in the national interest.

Joyce faced questions at the parliament’s cost-of-living inquiry on Monday, revealing that although Qantas’ unclaimed flight credits had fallen from $500m to $370m, its subsidiary Jetstar owed about another $100m of flight credits to its customers.

On Tuesday Albanese told reporters in Adelaide: “Well, I think that when people have booked flights and paid money they should either get access to another flight at another time or they should get their money back.”

“Qatar can fly into Adelaide as many planes as they like as big as they like. They can fly in other planes which are bigger and bring in more people,” he said.

“There is nothing unusual about a nation state not having access to unlimited flights wherever they’d like to go, whenever they’d like to go.

“Australia has exactly the same situation – where Australian airlines are restricted from where they fly into and the former government made a very similar decision under minister [Michael] McCormack.”

At the National Press Club on Tuesday, Leigh backed King’s decision that although there was “no single decisive factor” in refusing Qatar’s request the decision was in the “national interest” – but was unable to explain the factors that led to that conclusion.

“I don’t think it’s appropriate for me to speculate on the factors … that were driving another minister’s decision under the national interest,” he said.

Leigh noted the “the level of complaints against Qantas from Australian consumers has been considerable”. Labor’s Canberra based MPs have raised constituent concerns that “it’s pretty frustrating for Canberrans when you catch a flight to or from Sydney, to have one-in-eight chance for that flight [to get] cancelled”.

Leigh said the government was “keen to see more competition”.

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“I look to Europe with its range of low-cost carriers and see what looks like an even more competitive ecosystem … moving us towards that, I think is a long-term goal.”

The competition inquiry had previously heard various airport chiefs as well as Rex Airlines repeat allegations that Qantas has been strategically scheduling, then cancelling flights out of Sydney airport to block competitors from launching rival services.

By spreading cancellations across all services, critics argue Qantas can ensure no one service is cancelled more than 20% of the time, a threshold forcing the carrier to forfeit a slot.

At Tuesday’s hearing, MPs repeatedly raised the high rates of cancellations out of Sydney, especially on the Sydney-Canberra route where almost one in 10 flights are cancelled, and questioned whether Qantas was hoarding the slots.

Andrew Finch, the general counsel and group executive at Qantas, said “we completely reject these assertions (slot hoarding) which are broadcast without a skerrick of evidence”.

Scott Zeglin, Qantas’ head of strategy and fleet, later acknowledged the airline had lost slots on Sydney-Canberra, and that the airline could soon hand back slots on the route. He said Qantas’ high cancellation rate out of Sydney was not due to deliberate cancellations, but because of operational issues such as weather, air traffic controller shortages and technical issues.

“It’s not been at acceptable levels in Sydney-Canberra, we’ve lost slots, we’ve not satisfied the 80-20 on that market. And so as we look towards our future schedules, it will likely require fewer flights, which is not necessarily a benefit to customers in terms of customer choice.”

Earlier on Tuesday, the Virgin Australia chief executive, Jayne Hrdlicka , who counts Qatar Airways as its partner airline, described as “a bit of nonsense” Joyce’s claim before a Senate committee on Monday that Qatar’s expanded air rights would distort the market. Virgin Australia counts Qatar Airways as a partner airline.

Hrdlicka also said she had been unable to secure meetings with the government to discuss the topic, and expressed dismay about assistant treasurer Stephen Jones’ comments about Qantas’ financial sustainability.

“I’m sure that every CEO in the country was disappointed to hear that there’s one company in the country that should be protected, and profit should be protected,” Hrdlicka told ABC Radio National.