Sydney Airport runway
Sydney Airport Wikimedia Commons

In a bid to increase and improve competition at the Sydney airport, the Australian government has announced it would introduce rules to schedule more take off and landing slots for flights, especially those belonging to new airlines.

The government on Monday opened up a tender process for the Sydney Airport Slot Manager, which would require the firms that apply to display their ability to manage and settle conflicts more transparently, Reuters reported.

"Once appointed, they must comply with a statement of expectations including governance and transparency requirements," Transport Minister Catherine King said.

The move is seen as a bid to quash allegations of slot hoarding by Australia's two biggest airliners, Qantas and Virgin. At present, the two carriers are majority stakeholders in the company that manages flight slots.

The two companies have been accused of holding the slots even when their flights were not scheduled, as a tactic to keep out competitors, according to ABC News.

Sydney Airport follows an "80/20 rule," which means the airline companies should use 80% of the allocated slots and are allowed to cancel 20% of their flights, without losing the slots.

Last year, the regional airlines, Regional Express Holdings (Rex), had submitted before a Senate inquiry that it was denied the slots it had applied for, and that it was allocated only 20 of the 800 daily peak slots.

Rex entered into administration last week, and slashed hundreds of jobs citing financial loss. It is the second regional airline company to fold in 2024 after Bonza collapsed in April.

About 90% of the country's aviation is controlled by Qantas and Virgin Australia, even though both the companies have rejected allegations of slot hoarding.

"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," Virgin Australia stated.

Australia's competition regulator has been urging the government to reform slot allocation. However, Rod Sims, a former head of the competition watchdog, warned the government to exclude the airline companies from slot management.

"Make it arms-length from all the players," Sims said. "Whether it's Qatar or British Airways, but certainly not Qantas, Virgin or Rex, they should have no say in it. You can't have competition without a better system of slot management at Sydney."

The government is expected to finalize more policies this year.