Part 1 The Year in Review by the Chairperson, Ms Genevieve Butler
This annual report marks the thirtieth year of operations of the International Air Services Commission (the Commission). It is my pleasure to provide an overview of the activities for the last 12 months, my first as Chairperson of the Commission.
The Commission remained busy dealing with a total of 32 applications resulting in six decisions varying determinations (including five resolutions); 21 renewal of capacity allocations and five determinations allocating new capacity. Qantas applied for and was allocated capacity for services on the following routes: India, Italy, South Korea, Timor-Leste and Vietnam. Qantas also sought renewal of capacity allocations on the Fiji, France, Indonesia, Italy, South Korea, Papua New Guinea, Singapore, South Africa, Thailand and Vietnam routes. Virgin Australia sought the renewal of capacity allocations on the following routes: Fiji, Italy, Samoa, Singapore and Solomon Islands.
Eight applications were received but subsequently withdrawn - four from Pionair Australia Pty Ltd and another four applications from Transpac Express (Australia) Pty Ltd. At the time of writing of this report, the Commission was considering several complex submissions, including requests for variation of code share agreements and extensions of utilisation dates of capacity.
The Commission held a total of 18 meetings during the year. Meetings were conducted both in-person in Canberra and by videoconference. The Commission engaged closely with Australian carriers, holding multiple meetings with executive officers from Qantas and Virgin Australia.
While the financial year saw continued impacts of the COVID-19 pandemic on the aviation sector as international borders remained highly restricted, the year also marked the start of recovery, with many countries around the world easing travel restrictions and once again welcoming international travel. Overall, the resumption of international travel was fragmented as countries adjusted their border and travel restrictions in line with levels of vaccination and the perceived risk of further COVID-19 outbreaks. At the time of writing of this report, a range of COVID-19 related travel restrictions remain in place in many countries around the world, particularly in the Asia-Pacific region, as countries continue to respond to new COVID-19 variants.
Mindful of such restrictions, the Commission continued its flexible approach in its dealings with Australian airlines, and in monitoring the use of capacity entitlements. Throughout the year, the Commission continued to proactively engage with airlines given the dynamic nature of market circumstances to ensure that its decision-making reflected the contemporary commercial and operational challenges faced by Australian airlines in providing international services.
The reduced operation of international services to Australia, as a consequence of low passenger demand, continued to impact the carriage of freight, much of which is transported in the cargo hold of passenger aircraft. This saw unique responses by Australian airlines that sought to balance these pandemic-related circumstances, such as the operation by Qantas and Jetstar of passenger aircraft for dedicated freighter services between Australia and Vietnam.
While the COVID-19 pandemic has led to a decline in international passenger operations by Australian carriers compared to pre-COVID-19 levels, the easing of international border restrictions have seen them successfully expand their international services into new markets. For example, Qantas has launched services using its own aircraft to India (Melbourne-New Delhi), Timor-Leste (Darwin-Dili) and Italy (Perth-Rome). Qantas will shortly commence flights to another new city pair in India (Sydney-Bengalaru) and both Qantas and Jetstar will initiate services to South Korea in November and December 2022 respectively.
The easing of Australia’s border and travel restrictions from 1 November 2021 saw the recommencement of commercial scheduled services to a range of destinations and an associated rise in international passenger traffic since the start of the COVID-19 pandemic. The Bureau of Infrastructure, Transport and Regional Economics (BITRE) reported that 51 international airlines operated scheduled services to/from Australia during the month of June 2022 (including four dedicated freight airlines).
There were 6.515 million international passenger arrivals and departures recorded to/from Australia for the year ended June 2022, which represented a significant increase from June 2021, when there were only 1.123 million international passenger arrivals and departures recorded. However, this was still only 15.5 per cent of pre-COVID-19 travel seen in June 2019, when 42.121 million international passenger arrivals and departures were recorded.
Total seats available on international scheduled operations to/from Australia during the month of June 2022 were 1.981 million – a decrease of 53.1 per cent compared to June 2019. While the overall seat utilisation percentage was 80.7 per cent in the month of June 2019 and 26.4 per cent in June 2021, it had increased to 82.2 per cent in June 2022.
In terms of passenger carriage, Qantas Airways had the largest share of the international passenger market in June 2022 with 17.8 per cent, followed by Singapore Airlines with 15.6 per cent, Jetstar with 11.6 per cent, Emirates Airline with 9.4 per cent, Air New Zealand with 7.4 per cent.
The Qantas group – Qantas Airways, Jetstar and Jetstar Asia (0.2 per cent) accounted for 29.6 per cent of total passenger carriage in June 2022. The group’s share was 27.3 per cent in June 2021 and 26.3 per cent in June 2019. Australian designated airlines – Qantas Airways, Jetstar and Virgin Australia (1.3 per cent) accounted for 30.7 per cent of total passenger carriage in June 2022. Their share was 27.3 per cent in June 2021 and 32.6 per cent in June 2019.
International scheduled freight traffic in June 2022 decreased by 10.7 per cent over June 2021 to 68 906 tonnes.
Inbound freight traffic decreased by 5.7 per cent and outbound freight traffic decreased by 17.4 per cent compared to June 2021. International scheduled freight traffic in June 2019 was 84 683 tonnes.1
During the reporting period, I was appointed by the Governor-General as Chairperson of the Commission for a three-year term from 5 August 2021, assuming the role from Dr Ian Douglas.
On 16 December 2021, the Governor General appointed Ms Jane McKeon as Member of the Commission for a three-year term, following her initial appointment as Acting Member of the Commission by the Minister for Infrastructure, Transport and Regional Development in October 2021.
On 29 October 2021 we farewelled Commissioner Ms Karen Gosling.
In June 2022, we farewelled the Director of the Commission, Ms Marlene Tucker, who had held the role since October 2012, and welcomed Ms Jasmina Ackar as the new Director.
I would like to thank my fellow Commissioner, Ms McKeon, whose significant contribution is essential to the work of the Commission.
I would also like to thank Dr Douglas and Ms Gosling, whose expertise and experience contributed substantially to the Commission.
Finally, I would like to extend my gratitude to Ms Tucker for keeping the Commission functioning smoothly despite the complexities of lockdowns and industry disruption.
1 Data sourced from the Bureau of Infrastructure, Transport and Regional Economics.