Qantas International Operations

19 September 2008

Qantas flies to 38 countries with more than 850 international flights per week. These operations are not only based on commercial decisions, but must also take into account regulatory and industry frameworks.

Aviation is still one of the most highly regulated industries in the world. In fact, globally there are over 3,500 Bilateral Air Service Agreements, each of which sets out the entitlements available to carriers of each country. The Australian government has over 65 Bilateral Air Services Agreements with foreign countries.

These agreements:

  • Prescribe the routes that may be operated - these are the points in each country that may be served by carriers, and the intermediate and beyond points on services between the two countries.
  • Attach traffic rights to those routes - these are the points at which carriers are able to uplift and discharge passengers and freight.
  • Stipulate the maximum capacity allowed on the routes - this may be the number of seats or frequencies per week, and sometimes aircraft types
  • Codesharing rights - these provide the right to work with other carriers to market services on flights operated by other airlines between the two countries
  • Designation - this is the basis on which airlines qualify to use the entitlements under the agreement. This is usually based on 'nationality criteria' which requires substantial ownership and effective control of airlines' equity capital by nationals of the country in which it is based, although this is progressively changing to 'principal place of business'.

When Qantas wants to fly to a new destination it applies for an allocation of capacity through the International Air Services Commission, which is an independent statutory authority. Applications for capacity allocations by Australian international carriers are judged on a set of public benefit criteria, which include considerations such as competition, consumer, trade and industry benefits. Where capacity is limited under a Bilateral Air Services Agreement, applications may be contested by other airlines.

Qantas is required to be designated as an Australian airline under each Bilateral Air Services Agreement. This is arranged by the Australian Government through diplomatic channels. In addition, Qantas usually has to secure an operating licence or permit from the aeronautical authorities in the country to which it intends to operate. This involves providing details in relation to technical aspects of Qantas' operations such as Air Operator's Certificates, safety, security and insurance.

Securing airport slots entails accessing runways or gates or both. With a number of airports having a high level of demand, such as London Heathrow, a slot allocation process is required so that the best use can be made of the limited resources. The process is governed by the International Air Transport Association (IATA) and the Worldwide Scheduling Guide (WSG) is a set of guidelines used to manage this process.

International airline schedules operate on two seasons, the Northern Summer and the Northern Winter. Airlines file for their slots twice a year and then attend the IATA scheduling conferences in June and November at which results of their requests are provided by coordinators.
Slots can be allocated on runway capacity; available gates or space at the terminal; terminal facilities such as baggage belts, check-in counters and airport facilities.

If Qantas applies for slots that are not available, representatives will negotiate with co-ordinators to access times that better match its schedule. For example, flying curfews at some Australian airports prohibit Qantas from landing before 6am which restricts the flexibility of its international departure times from the departure country.

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