AAA Welcomes Moves To Reform Sydney Airport Slots

Plans to reform slot rules at Sydney Airport as part of efforts to boost competition have been welcomed by the Australian Airports Association (AAA).

The Australian government on Aug. 5 issued a competitive tender for a slot manager at Sydney Kingsford Smith Airport (SYD) to introduce rules to free up more takeoff and landing slots.

The move follows the voluntary administration of Rex on July 30 and the failure of Bonza earlier this year. Both airlines were unable to secure adequate peak-hour slots at Australia’s busiest airport.

“We’ve lost two airlines to financial collapse from the domestic sector in just three months—a clear sign we need to urgently take a different course and strengthen competitiveness in Australian aviation,” says AAA head of policy and advocacy, Natalie Heazlewood.

“Increasing transparency and compliance, including dealing with any potential conflict of interest in slot allocation, should boost competition and ultimately benefits consumers.”  She also called on the government to move swiftly to bring this legislation to parliament.

The government says the tender requires prospective slot managers to demonstrate how they will deliver on the proposed reforms, initially outlined in February, and mitigate conflicts of interest in a transparent way.

Canberra has already implemented several commitments, such as an independent audit of slot usage and reestablishing the Compliance Committee for Sydney Airport. Final reforms will be completed with upcoming legislation, which will include changes to the slot allocation process and the definition of “new entrant” to facilitate easier access for new carriers.

Other reforms include modernizing the compliance regime with penalties for anti-competitive behaviors, updating enforcement tools for the government to monitor airlines closely and take legal action when necessary and requiring airlines to regularly report slot usage details, including reasons for cancelations or major delays, which will be published regularly.

SYD handled 20.1 million passengers during the first six months of 2024, marking a rise of 10.4% compared with the same period in 2023. Domestic passengers accounted for 12.1 million—up by 5.6% year-on-year—while international passengers grew by 18.6% to 7.9 million.

According to OAG Schedules Analyser data, Qantas has a 36.1% capacity share of all departure seats from SYD during August 2024, while subsidiary Jetstar accounts for 17.2%. Virgin Australia has a 18.9% capacity share.