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The assistant treasurer has walked back comments that the federal government was protecting Qantas' record profit margins when it moved to block Qatar Airways from expanding its services in Australia.
Key points:
- Stephen Jones says it is not controversial to say Qantas must remain profitable
- The government is defending a move to block Qatar Airways adding more flights at Australian airports
- Mr Jones says his comments suggesting the government intervened to protect Qantas' profits were misconstrued
The government is defending its decision to prevent Qatar from adding 21 extra flights each week into Sydney, Melbourne and Brisbane, which it said was done in the "national interest", as challenges against the move mount.
Former head of the competition watchdog Rod Sims has criticised the government's decision, saying allowing the Qatar flights would have improved competition in a highly concentrated market, and the boss of Virgin Australia has said it would have also forced down ticket prices.
Assistant Treasurer Stephen Jones told the Australian Financial Review on Monday that Qatar was blocked because cheaper fares could be "unsustainable for the existing Australian-based carrier", and the government wanted to ensure Qantas' viability.
Shadow Transport Minister Bridget McKenzie has accused the government of "running protection" for Qantas, saying the government was deliberately keeping the cost of flying "artificially high" during a cost of living crisis.
But speaking on Sky News, Mr Jones said his comments had been "misconstrued".
"I made the completely uncontroversial statement that the Australian government wants to ensure our airline industry is viable and competitive, that it's delivering good services to customers," he said.
"A viable airline industry requires a profitable airline industry."
The outgoing Qantas CEO Alan Joyce was called to appear before a parliamentary committee this week to face a grilling from senators of all stripes after the airline posted a $2.5 billion pre-tax profit, while facing accusations that its services had worsened.
Mr Jones said he did believe Qantas had fallen short of its obligations to workers and customers in recent times.
Jones says Qatar decision made by minister, not cabinet
Qantas has lobbied the government not to allow Qatar to add more flights, saying it would "distort" the market.
Mr Jones reasserted that airlines must be profitable, because "we have seen in our history what happens when they are not".
But he distanced himself from the decision to block Qatar, saying it was made at Transport Minister Catherine King's discretion and was not a decision taken by cabinet.
"This is a decision of the minister," he said.
"The delegation lies with the minister and the minister alone."
Prime Minister Anthony Albanese said the minister's decision was not "unusual", and that Australia's aviation market was strong.
"We have the most open aviation market in the world, bar none," Mr Albanese said.
"Qatar or anyone else, for example, has unlimited flights into all of the non-gateway airports around Australia … we have the most competitive system."
The Senate is expected to use next week's sitting to demand the government produce documents between the minister and her department surrounding the decision to block Qatar Airways.
Some crossbenchers have also questioned why the aviation industry was left out of the government's wideranging competition review, which is examining highly concentrated markets to find ways to improve productivity, reduce the cost of living and improve wages by increasing competition.
Mr Jones said a separate aviation industry "green paper" examining that issue would be released later this year.