Sydney Airport Slot Tender Comes Too Late for Rex

The Australian government has launched a competitive tender for a new slot manager at Sydney Kingsford Smith Airport, part of broader reforms aimed at addressing longstanding issues with the airport’s slot system. This move follows criticism of the current arrangements and the recent struggles of airlines like Rex – Regional Express and Bonza, which faced challenges securing peak hour slots at Australia’s busiest airport.

The government seeks proposals demonstrating how new slot management practices will improve transparency and competition, in line with recommendations from the Harris Review and the Australian Competition and Consumer Commission. Tender applicants must also address potential conflicts of interest.

Current slot management, handled by Airport Co-ordination Australia, is under scrutiny. This private company is majority-owned by Qantas and Virgin Australia, which together control about 90% of the Australian airline market. Sydney Airport allows 80 aircraft movements per hour, though this limit is rarely reached. Qantas and Virgin Australia dominate the slot allocations, with Qantas holding 103 slots and Virgin Australia 57, while Rex holds only seven. Bonza, which failed to secure slots and went bankrupt in April 2024, highlights the struggles faced by smaller carriers.

Rex, a consistent critic of the slot regime, recently filed for voluntary administration. The airline’s inability to secure sufficient peak-time slots was a significant factor in its financial troubles, exacerbated by its ill-fated B737-800 operations. Rex remains operational with turboprop flights, backed by a loan from PAG Asia Capital, which is reportedly considering converting the debt into equity.

Transport Minister Catherine King stated that the slot tender is part of a comprehensive reform plan designed to enhance the Sydney airport slot system. These reforms include changing the slot allocation process to increase availability and revising the definition of ‘new entrant’ to facilitate access for new airlines. King emphasized the government’s commitment to addressing aviation sector challenges that have persisted for years.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com