Singapore Airlines has 'no immediate plans' to return to Canberra as Qantas, Virgin hold 95% market share

As the federal government continues to come under fire over its decision to reject a bid by Qatar Airways for extra flights to the major capitals, SIA told The Canberra Times that it was not contemplating a return to Canberra flights in the short-term.

But the airline indicated that may change depending on developments in the Australian aviation market.

"We continue to monitor travel demand and will continue to be nimble and flexible in matching our capacity to meet demand for air travel," a spokesperson said.

The airline's stance underlines concerns that the nation's highly concentrated aviation market comes at a heavy cost to travellers in high airfares and poor service standards.

In its Aviation Green Paper released on Thursday the government acknowledged that reduced competition had hurt consumers.

According to the paper, Qantas has almost 62 per cent of the domestic market and Virgin Australia 33.4 per cent, giving them a combined 95.1 per cent dominance of the sector.

Not only is the market highly concentrated, but structural changes since the pandemic have meant the carriers do not compete directly with each other and instead focus on niche markets, the paper said.

"The [government] recognises a reduction in competitive tension could adversely impact consumers and businesses, potentially leading to higher prices and lower service outcomes," it said.

The Green Paper's warnings about the detrimental impact of a lack of competition sit awkwardly with the government's decision to reject the Qatar bid for 21 extra flights.

Transport Minister Catherine King told parliament on Thursday that the decision had been made in the national interest, but admitted at a media conference she also took into account the treatment of several women who were allegedly subject to invasive body searches while at Doha Airport in October 2020 in making her decision.

It was revealed the women, who have launched legal action over the matter, had written to Ms King asking her not to permit Qatar more flights.

Assistant Minister for Competition Andrew Leigh told The Briefing podcast that Qatar was "welcome to fly as many places as it wants to into Canberra".

But pressed on the government's decision to block Qatar from operating more flights to the major capitals, Dr Leigh said flight access was subject to international agreements: "Sometimes airlines will get what they ask for, other times they won't."

The Canberra-based MP said he did not "pretend that Qantas in any way has always been doing the right thing by the flying public".

"I've been very critical of Qantas, for example, over flight cancellations on the Sydney/Canberra leg ... or over the treatment of passengers who are owed flight credits from the COVID era," he said. "We are keen to see more competition".

But Opposition leader Peter Dutton earlier this week accused the government of running a "protection racket" for Qantas and said there were "more questions than answers" about the reasons for the government's decision.

Mr Dutton told the Today show the prime minister had a "very close personal friendship" with former Qantas chief executive Alan Joyce, who abruptly resigned on Tuesday.

Mr Joyce resigned days after the Australian Competition and Consumer Commission launched legal action against the airline, alleging it had sold tickets to more than 8000 flights even after they had been cancelled.

Qantas has also been accused of deliberately cancelling large numbers of flights between Canberra and Sydney to hoard landing slots.

Late last month Assistant Treasurer Stephen Jones said the government knocked back the extra Qatar flights because of concerns they would drive down fares to a level that would "make it unsustainable for the existing Australian-based carrier".

But Market Economics managing director Stephen Koukoulas rejected the argument and said more competition was needed in the aviation market.

Mr Koukoulas said there were mechanisms already in place to regulate dumping and other anti-competitive conduct.

"We know that airfares are considerably higher now than they were pre-pandemic," he said, and travellers overseas were benefiting from much cheaper flights than in Australia.

"More competition for sure, ramp it up, and allow that competitive pressure to deliver better services and cheaper fares," Mr Koukoulas said.