Ghost Planes: A clever business strategy? Or a waste of time and resources?

Sascha: [00:00:02] Welcome to The Dive, the podcast that asks who said business news needs to be all business. Earlier this week I read that the skies above Melbourne and Adelaide have ghost flights overhead every single day. No, that is not planes piloted by Casper or Poltergeists. It's the term for near empty planes operating on a regular basis. The Guardian has reported that Qatar Airways has been exploiting a legal loophole, operating these ghost flights to run extra services in Australia. These 350 seater Boeings sometimes fly with no passengers at all. All two managed to get an extra flight underneath a complex bilateral agreement. So it got me looking at what this means for Australia's aviation laws, especially in the competitive landscape of international airlines. And why is the Australian Government allowing this to continue? Despite rejecting Qatar's formal request to increase their flights. It's Friday, the 18th of August. And today I want to know, are these ghost flights a clever business strategy or a blatant disregard for our regulations and sustainability? To talk about this today, I'm joined by Elias Visontay from The Guardian. He's the transport and urban affairs reporter Elias. Welcome to the dive. 

Elias: [00:01:21] Thanks for having me.

Sascha: [00:01:22] So can you start at the beginning and explain the loophole that Qatar Airways are exploiting by flying these near empty planes between Melbourne and Adelaide? 

Elias: [00:01:31] Sure. So there's a bit of a back story, but basically Qatar Airways had been currently flying 28 services each week return into Australia's four major airports, which are Sydney, Melbourne, Brisbane and Perth. Now to do that, it's not so straightforward. A government actually needs to strike a bilateral deal, they call it, for air rights. And so those 28 services, the maximum that are allowed under the current bilateral air rights agreement between Australia and Qatar. But the loophole is basically that within that agreement it's limited to 28 services just to the four major airports, but it's actually got no limit when it comes to other airports in Australia. Now, most international carriers are obviously wanting to fly in to our major airports, the biggest population centres. And this is not only where most Australian tourists want to be flying out from, but most foreign tourists want to fly into. Hmm. But it does mean that there are some relatively large airports around Australia that are often not part of that cap that airlines face. And Adelaide is one example which currently has quite a few international flights and is capable of accepting pretty large jumbo jets. And so what Qatar has done here is said, look, we're currently limited to 28 flights to those four major airports. That's one flight per day to somewhere like Melbourne. But they obviously had demand for more flights. So what they did was they said, let's fly a second flight each day, except its final stop won't be Melbourne. It'll then go on to Adelaide. Hmm. And that's purely just so on paper. This is a flight between Doha and Adelaide. And just by including that final leg, it means it doesn't hit that limit of 28 flights into Australia's four major airports per week. 

Sascha: [00:03:19] Yeah, because Adelaide is such a specific example, because it's close enough to Melbourne. But I was just there last week. It is definitely a sizeable airport that you could get planes of that size into no problem and it wouldn't be out of place. 

Elias: [00:03:34] Yeah, it's just a small little hop that while it might not make money on, it doesn't take up that much fuel and that much time. 

Sascha: [00:03:42] Yeah. So I just want to focus on the passenger experience on these flights because as you said on paper, it's a direct flight from Doha to Adelaide. But in practicality, that's not necessarily the case. What does it look like in practice when people are booking the second flight to Melbourne? 

Elias: [00:04:02] Exactly. So from a zinder perspective, this could really serve people living in Adelaide and that's part of why the laws exist in the way they do to encourage services, international flights to places that might otherwise not get them. But when you look at the details of these flights, the second daily flight to Melbourne that ends in Adelaide quickly kind of becomes clear who it's mostly going to appeal to. So the inbound flight each day lands very late at night about 11:30 p.m.. And this means that if it lands in Melbourne at that time, it can actually travel on to Adelaide that night because there's a curfew at that airport. So anyone booked to travel between Doha and Adelaide on this flight is going to have to spend about 6 hours in an overnight layover inside Melbourne's airport. They can't leave the airport and then get up for that about 5:30 a.m. flight to Adelaide. And the other key part about how the laws work here is that they can't actually sell tickets on this flight to domestic passengers either. So really the only people who are going to be boarding that flight at five today, Melbourne going to Adelaide, are people who put up with a six hour layover in an international airport. And the other thing is you've got to consider that Qatar also run a separate flight to Adelaide. So if you're someone who lives in Adelaide and you're looking to travel internationally and you pick to go with Qatar Airways, it's kind of hard to see a benefit in choosing this flight over the direct non-stop service between Doha in Adelaide.

Sascha: [00:05:36] Let's take a quick break, but when I come back, I ask Elias, Well, if Qatar is so determined to exploit this loophole, why don't they just ask to run more flights? Welcome back to The Dive. Today, I've been joined by Elias Visontay from The Guardian to talk about ghost planes. Let's get back into our conversation. So earlier you said that Qatar operates under a bilateral agreement that's capped at 28 flights per week to the four major airports. Have they tried to increase this? Obviously, they are exploiting this loophole. They think there's more demand than just 28 flights a week.

Elias: [00:06:19] Yeah, this is a huge point of contention at the moment in Australian aviation and it's really spilling over into the political realm too. Qatar they'd actually made a formal request to introduce a further 21 weekly services into our four major airports, which is an almost doubling of capacity. Pretty significant. And part of why that's so significant in Australia at the moment is we're facing record high airfares. It's a combination of things, partly due to big demand for what they're calling revenge travel still lingering. But also airlines are really constrained in terms of how many flights they can run, whether that's due to staff shortages or issues with parts for planes that they've had to get back into service. And we've got a situation where Qatar is one of the few airlines in the world really that is in a position that has the capability to increase services to Australia. And if there's more seats available, you know, the laws in the market say that should bring down prices. But so Qatar has had that push to run more flights for a few months. They've been quietly kind of trying to work with the government to boost that bilateral agreement. What's transpired basically is that the Albanese government has pushed back and rejected that application. Quite a few people in the aviation and tourism spaces are pretty angry because, you know, this request for more flights would have brought in more tourists. It was supported by state premiers, travel agents, airports. You know, this is an industry that's still kind of recovering after COVID and long border closures. And I know this only sounds like 21 flights, but it's quite significant, as I said, given all those given the limitations affecting global aviation at the moment.

Sascha: [00:08:07] So I think it's important to, like you said, the Albanese government has pushed back. We are a business podcast, not necessarily a political one, but the two are so intertwined, I think, when it comes to this, because obviously, as you said, there's this market need to want to have lower costs and want to get the tourism industry up and going. But there's obviously other factors at play as well here that are influencing that. 

Elias: [00:08:30] Definitely. And I think this is why it's become such a controversial topic at the moment. The government almost seems at pains to not talk about this issue. The transport minister, Catherine King, has given a few different reasons for why she rejected Qatar Airways requests, ranging from not being in the national interest to wanting to support local jobs. And I think she's even mentioned the importance of getting planes out of the skies to reduce emissions. She's also mentioned the fact that Qantas have invested a lot in their own aircraft, new aircraft that will be coming online soon, and they kind of want to get a return for that investment. And so on the other side of this argument, the people who were opposing it. It's certainly been pointed out that Qantas has lobbied the government to kind of reject Qatar Airways expansion. And I guess the other key part of this is an ongoing lawsuit against Qatar Airways, which centres around an incident that happened in 2020 affecting some Australian women. It actually affected every woman flying in and out of Doha's airport when a baby was found in a bathroom at the airport. And authorities there basically paused all operations and proceeded with basically doing bodily inspections of all the women there to check who the mother was. And that was a huge scandal. And some Australian women, there's a group of five who are now taking that case to Qatar Airways and the Qatar Civil Aviation Authority. And that's before courts in Australia at the moment. And I guess, you know, people looking for an insight into why the government rejected Qatar Airways. While some point to Qantas and the fact that's a big Australian business. Others are pointing to the fact that Catherine King, the Transport Minister, actually first putting in writing that this request for more flights had been rejected through a letter that she sent to these five women expressing support for them and their ongoing struggle. So it's really tough at the moment to pinpoint exactly what's happened here. And Qatar Airways is certainly one of the few airlines in a position to put more seats into the Australian market and they're coming up against. Resistance. But you don't hear that resistance when the government talks about moves from other places like Emirates wanting to introduce more flights to Australia and Singapore Airways, for example. The difference being, though, with those countries, the UAE and Singapore, we've already got agreements in place that mean they're able to expand services without renegotiating our bilateral air rights. 

Sascha: [00:11:14] And it's interesting that you're saying that, of course, there's other factors, you know, staffing shortages, just actual capacity to increase that Qatar is in a position to take advantage of, and these are the factors that are stopping them. There's one other aspect that I just want to pick up on that you answered is that the Transport Minister pointed to the fact that emissions are adding extra planes into the sky flying into Australia. But of course we can't ignore the fact that this ghost plane, so to speak, know a plane that has very, very few passengers is flying between Melbourne and Adelaide for seemingly no reason at all other than to appear like Adelaide's the final destination on paper. So what are the sustainability considerations there? 

Elias: [00:11:57] I mean, that's the great irony of it. All right. Given that one of the concerns that the Government's expressed is about emissions, they can't do much to really stop this flight happening given it's already been given permission. But you're right, while this is a short flight, these planes are huge fuel guzzlers, essentially. And we know that aviation is really in the grips of a struggle looking at its future, how it can reduce its emissions footprint. Sustainable aviation fuel is probably one of the things on the horizon, but we know that that's never going to really reach a capability in the short term to allow our existing appetite for air travel to continue. And so when you look at the prospects of a flight like this continuing, I think it's really got some not even climate activists, but just, you know, the average person kind of trying to do their bit to reduce their emissions and businesses really trying to get on board. It's kind of galling looking at a service like this continuing. You know, I kind of crunched a lot of numbers and spoken to a few people behind the scenes on the East Coast flights. And it's really we're talking planes capable of seating 350 people, carrying as few as two, three passengers, sometimes sometimes no passengers would have booked on it, but they still have to run the flight to take off that loophole that 's gone to Adelaide. So I think that's going to be a big part of the future question of aviation. These guys' flights exist and they're really kind of tough to kick out. Often a lot of work is done to hide them. There's no doubt other ones existing and happening in Australia and all around the world now. So I certainly think as the aviation industry kind of moves towards decarbonising as best as it can, the existence of these cars flights is really going to come under the spotlight and I wonder how governments will really consolidate their obligations really in managing their own aviation sector and their transport needs is, as our government says, in matters concerning a national interest with without climate obligations to. 

Sascha: [00:14:00] I'm really curious now, Elias, where are the other? Do you know of any other ghost routes that are famous that have been unveiled or is this something that you're looking for at the moment?

Elias: [00:14:10] Look, they're really hard to pin down. So what defines a ghost flight is normally a plane that runs routinely with zero or below 10% capacity, but is sometimes really quirky. And, you know, the loopholes aren't always just to allow an airline to run more flights. So, for instance, there was a famous ghost flight running between Cairo and Tel Aviv once a day, and that frequently had no no passengers at all. But the reason it was flying was because of a peace agreement that stipulated that there had to be daily flights between Israel and Egypt, despite there being very little demand. And so the Egyptian government set up an airline that didn't exist before and it purely served just as one route that it would fly once a day. So, you know, this example between Melbourne and Adelaide is certainly one of the more, I guess from a climate perspective, one of the more egregious examples because it's such a huge plane. But I guess that other example between Israel and Egypt just goes to show the kind of quirkiness and the different reasons that airlines might have, countries might have for allowing these ghost flights to continue. 

Sascha: [00:15:23] Elias, this has been a fascinating conversation. I never thought I would learn so much about aviation and ghost flights in one week, but it's been an absolute pleasure. Thank you so much for joining us on the Dive today. 

Elias: [00:15:35] Thanks for having me. 

Sascha: [00:15:37] Thank you so much for joining me today. A quick reminder, I know I do it every episode, but if you could send this to a friend, if you could send it to someone who you think would just love to know about ghost flight. That is the best thing you can do for us as a small independent media outlet. I really appreciate it. A huge thank you again to the Guardian, Elias for coming on the show today. And I will be back in your feeds next week. Until then.