Australia’s recent decision to deny Qatar Airways additional landing rights has raised concerns about the potential economic consequences and diplomatic repercussions. According to Professor Rico Merkert from the University of Sydney Business School, this decision could lead to an estimated AUD $1 billion in annual economic damage. While this estimate is described as conservative, it highlights the far-reaching impact of the decision.
The most affected sector is Australia’s tourism industry, followed by business travel, cargo, and the visiting friends and relatives market. Under the existing bilateral flying services agreement, Qatar Airways is allowed up to 28 weekly flights between Doha and Australia’s major international airports. Despite maxing out this quota, their recent bid to increase it by 21 weekly flights was denied by Transport Minister Catherine King, potentially to protect the interests of Australian flag carrier Qantas.
However, Qatar Airways has found a partial loophole by adding tag flights to smaller airports like Adelaide, not covered by the agreement, to operate additional flights to restricted airports like Melbourne. While this approach has drawn some controversy due to a six-hour overnight layover in Melbourne, it provides a workaround for the airline.
A key challenge is that Qatar Airways lacks fifth freedom flying rights in Australia, preventing it from selling tickets for the domestic leg between Melbourne and Adelaide. Despite maintaining its presence in the Australian market during the pandemic when other airlines suspended international flights, Qatar Airways didn’t receive the expected additional flying rights.
Professor Merkert finds the decision inexplicable and suggests that it may harm Australia’s diplomatic relations. Additionally, it may lead to higher airfares as capacity on the Kangaroo Route between Australia and Europe is currently at 70% of pre-pandemic levels, allowing Qantas and its partner Emirates to charge more due to limited competition.
Despite the setback, Qatar Airways has maintained a dignified silence on the matter. However, it’s worth noting that in the past, the airline has faced disputes within the Oneworld alliance and alleged lobbying by Qantas to limit its landing slots in Australia.
In conclusion, Australia’s decision regarding Qatar Airways has raised concerns about economic losses, diplomatic implications, and potential impacts on consumers. It remains to be seen how this situation will develop and whether it will affect future aviation agreements between the two countries.
