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Major airlines are playing by the rules at Sydney Airport, a government-commissioned audit has found, though are still using the system to their advantage.
The independent audit of domestic slots found that airlines are not scheduling more flights than they can service with their existing fleets, and that slot usage in Sydney has dramatically improved since the pandemic, with non-utilisation going from 17.8 per cent in 2022 to 8.1 per cent this year.
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The report also found, however, that the 80/20 rule, which requires airlines to use a take-off slot at least 80 per cent of the time or lose it, is “less effective” outside peak hours, and that airlines that already hold slots have a significant advantage in the allocation process as they have first preference when changing the times of their own slots.
According to Transport Minister Catherine King, airlines are asking for more slots than end up being used, making slots seem “more limited than they really are”, and busier routes like Sydney–Melbourne are more vulnerable to cancellations as airlines can re-accommodate passengers sooner – a phenomenon noted last year by then-Qantas CEO Alan Joyce.
“The report found that while there has been improvement in slot use following the pandemic, under the current guidelines, there was evidence airlines utilised the slot system to maintain their existing slots and optimise schedules,” Minister King said.
“The report concluded more effective regulatory oversight is required to ensure slot allocation is fair, efficient, and transparent.”
In particular, the report found that airlines could “tactically” spread out their non-utilisation of slots over different series in peak times – a series being “a set of at least five slots at approximately the same time on the same day of the week over a season” – to stay compliant with the 80/20 rule.
“The audit observed patterns of non-utilisation clustered around the 80 per cent ‘use it or lose it’ utilisation threshold on high-frequency routes, especially during peak periods,” the report read.
“This ‘spreading out’ of unused slots across different series ensures they still meet the minimum usage requirement overall, allowing them to keep control of their slots in the long term while gaining some operational flexibility.
“This can help them adjust their schedules to current demand without losing their rights to valuable slots in future seasons.”
The government has called on the opposition and the Senate crossbench to pass its slot reform bill, which cleared the House of Representatives last week and is due for a vote on Thursday.
“The Albanese Government last week passed the Sydney Airport slots legislation in the lower house, which would introduce stronger compliance and stricter penalties to crack down on slot misuse, with direct penalties for the behaviour found in the report,” Minister King said.
“The reforms were a key recommendation of the Harris Review, which was handed to the previous Government in 2021 and never acted upon.”
Qantas Group has held up the report as evidence that it is not hoarding slots, a charge both it and rival Virgin Australia have repeatedly denied, saying Qantas and Jetstar used more slots than Virgin and Rex in peak periods over the 18-month audit period.
“The slot audit provides welcome transparency around slot usage at Sydney Airport and clearly shows that Qantas and Jetstar comply with the rules and have not been hoarding slots,” a Qantas spokesperson said.
“Qantas and Jetstar only request slots and schedule flights which we have the aircraft and crew to operate.
“We have welcomed the legislative reforms from the Government, which increase transparency and better align Sydney Airport’s slot management system with international best practice.”
Virgin Australia has also said there is no evidence to support slot-hoarding allegations.
“Virgin Australia has always been committed to a fair slot allocation process and we are pleased to see our compliance with the scheme rules is reflected in the findings of the independent slot audit,” a spokesperson said.
“As the only scaled competitor to Australia’s two other national airlines, Qantas and Jetstar, we support greater transparency and processes that improve competition across the aviation sector.
“That is why we have welcomed the Government’s important review of slot operations for Sydney Airport, including closer alignment to international guidelines.”
