Virgin’s share of Sydney Airport slots under fire

A spokesman for Rex declined to comment.

Industry sources say the country airline – which has leased a fleet of Boeing 737s to challenge Qantas and Virgin on major city routes – has not been able to secure permanent slots at Sydney Airport and is instead using slots temporarily vacated by international airlines.

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Meanwhile, another budget airline challenger called Bonza, backed by US private investment firm 777 Partners, is planning to launch in Australia by mid-2022, with access to Sydney Airport slots considered essential to its success.

The Australian Competition and Consumer Commission has previously said that access to landing slots at Sydney Airport is a key barrier to new airlines setting up in Australia to challenge the existing Qantas-Virgin duopoly, and called for slots to be given to whichever airline can use them regardless of historical allocations.

Slots at Sydney Airport are managed by an independent body, the Airport Coordination Australia, which allocates landing rights to airlines with a goal of maximising services under the airport’s 80-movements-per-hour cap. It declined to comment for this story.

A review of demand management at Sydney Airport by former Productivity Commission chair Peter Harris, which was delivered to government in January, recommended a number of changes to make it harder for airlines to hold more slots than they can use, including stronger enforcement of the “use-it-or-lose-it” rule.

The “use-it-or-lose-it” rules have been suspended during the pandemic.

A Sydney Airport spokesman would not comment directly on the allocation of slots between different airlines. However, he said its slot regime was “more than 20 years old and no longer fit for purpose, and we are supportive of the comprehensive review that’s underway that includes all stakeholders.”

The airport’s submission to the Harris Review said that slots should only be allocated to an airline that “actually has the ability to operate the number of services and types of services filed for”.

“In addition, it is important that fair competition is encouraged and that unused slots are not blocked from new or expanding airlines, particularly as the aviation sector recovers from the impact for COVID-19,” the submission said.

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