Annual Reports

Annual Report 2014–2015

The year in review by the Commissioners

It is our pleasure to provide an overview of the activities of the International Air Services Commission (the Commission) for 2014–15, the twenty-third year of Commission operations.

In 2014–15, we saw a steady growth of international passenger movements into and out of Australia, with an increase of 4.6 % in passenger traffic compared with last year. Airlines increased their capacity in response to this growth by 1.3% and load factors increased to 79%.

The growth of passenger movements in the last year was sustained against a backdrop of a weakening Australian dollar and several high profile fatal accidents. Malaysia Airlines, which had two high profile incidents, has recently announced a reduction in services to several Australian cities.

A majority of the work of the Commission in 2014–15, involved the renewal of capacity allocations. Additionally, both major Australian carriers, Qantas and Virgin Australia, sought and were granted new capacity allocations.

Qantas was issued additional 364 seats per week of passenger capacity on the Chile route to enable it to operate another weekly B747 service between Sydney and Santiago. This brought Qantas' capacity allocation on the route to a total of 1,483 seats per week. The Commission also authorised Qantas to code share with the LATAM Group. In authorising the code sharing arrangements, the Commission considered that the Qantas-LATAM code share would likely support the viability of Qantas' services between Australia and Latin America and noted that Aerolineas Argentinas ended its Buenos Aires-Sydney services in April 2014.

Qantas was also allocated 1,092 seats of capacity per week on the Canada route to enable the airline to operate B747 services between Sydney and Vancouver. In its public announcement, Qantas stated it would operate six direct return services between Sydney and Vancouver in January during the peak of the North American winter holiday season.

In December 2014, Qantas was allocated seven frequencies of capacity each week on the Japan route to serve Haneda Airport in Tokyo. Qantas subsequently scheduled services between Sydney and Haneda Airport with operations to commence in August 2015. The existing Qantas service to Tokyo's Narita airport will operate from Brisbane rather than Sydney.

Qantas was also allocated unlimited passenger capacity between points in Australia (other than Sydney, Melbourne, Brisbane and Perth) and points in Fiji. Qantas' wholly-owned subsidiary, Jetstar Airways Pty Ltd, uses the capacity to operate services between the Gold Coast and Fiji that commenced in March 2015. Further, Qantas applied for and was granted renewal of one all-cargo frequency per week on the Hong Kong route.

During the reporting period, Qantas applied for and was granted renewal of capacity allocations on the Hong Kong, New Caledonia and Philippines routes.

In September 2014, Qantas was granted authority to code share with Sri Lankan Airlines beyond Singapore into Colombo. Virgin Australia was granted authority in 2013 to code share with Singapore Airlines on the same route enabling the airline to offer services to Colombo via Singapore.

Capacity allocations for Virgin Australia included additional capacity of 172 seats per week on the Papua New Guinea route. This additional capacity enabled the airline to expand its operations on the route offering supplementary services between Brisbane and Port Moresby at peak times. Virgin Australia was also granted renewal of certain capacity allocations on the Cook Islands, France (route 1), Thailand, Tonga and United Arab Emirates routes.

During the reporting period, Pacific Air Express continued to hold all-cargo capacity on certain Pacific routes enabling it to continue operating freight services between Australia and Papua New Guinea and Vanuatu. During the year, the airline returned two weekly services of freight capacity on the Nauru route, retaining one weekly service.

Tasman Cargo Airlines continued to hold unlimited all-cargo capacity on the Trans-Tasman route. The airline operates five freight services per week on that route.

Pionair continued to hold one all-cargo service per week with capacity up to 28 tonnes on the New Caledonia route and 18 tonnes of freight capacity on the Papua New Guinea route. The Commission issued these capacity entitlements in 2013 and the airline is yet to commence operations on the routes. During the year, the Commission issued two resolutions extending the dates of capacity utilisation by Pionair on these two routes as the airline completes the process of obtaining all regulatory approvals including an upgraded Air Operator's Certificate (AOC). Pionair is required to upgrade its current AOC to allow the airline to operate scheduled international services.

Government and stakeholder relations

The Commission values a positive relationship with its stakeholders. During the year, the Commission held open and productive meetings with senior executives of several airlines including Gareth Evans (Chief Executive Officer of Qantas International), Jane McKeon (Group Executive Government Relations of Virgin Australia) and Michael Lee (General Manager, Pionair/ Skyforce Australia Pty Ltd). Such meetings between the Commission and its stakeholders provide value both ways. It provides the Commission a valuable insight into the strategic thinking of the airlines and offers industry stakeholders to have an insight into the Commission's decision-making processes.

In the last 13 months, the Commission has provided neutral submissions to two inquiries: the inquiry by the Australian Parliament's Joint Standing Committee on Foreign Affairs, Defence and Trade into Australia's trade and investment relationships with Middle Eastern countries and the inquiry by the Australian Competition and Consumer Commission into the application by Qantas and China Eastern to authorise their proposed Joint Coordination Agreement.

Appointments and administrative issues

The term of Dr Jill Walker as Chairperson of the Commission ended on 11 August 2014. The current Commissioners alternate as Presiding Officer at Commission meetings.

In October 2014, the Commission conducted a review and, after consultation with airline stakeholders, updated its procedures for deciding applications for the allocation of capacity and for reviewing existing determinations. The procedures are designed to be consistent with the International Air Services Commission Act 1992, the regulations, the Minister's Policy Statement and principles of natural justice.

In mid-2014, consistent with the requirement to reduce costs across the Australian Public Service, the Commission Secretariat was moved from its office in 62 Northbourne Avenue to 111 Alinga Street co-locating with the Aviation and Airports Division on Level 4. The relocation was effected on the basis of arrangements to maintain the separate identity and independence of the Commission.

As we review our performance during the year, we would like to take this opportunity to thank the Executive Director, Ms Marlene Tucker, and her small team for their invaluable advice and assistance in ensuring that the Commission functions smoothly and efficiently.

Dr Ian Douglas
Commissioner

Mr John King
Commissioner


PDF Version

The Commission's Annual Report is available in PDF format for easy download and printing. The Annual Report is also available in hard copy by contacting the office, the details can be found under the “Other Information” tab on this website. The document reflects the information in the hardcopy of the annual report tabled in Parliament on 15 October 2015.

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Last Updated: 19 April, 2016