Navigating Turbulence: Major Issues Reshaping Australian Corporate Aviation

The Australian aviation sector is experiencing a period of deceptive calm, facing structural challenges that will inevitably ripple through corporate travel strategies. That was the central message delivered by Peter Harbison, founder of Greener Airlines, during his recent presentation at FACTS in Sydney. Harbison dissected six critical issues, from existential regulatory threats to emerging technological disruptions, all of which demand immediate attention from business travel professionals. The underlying theme is clear: the age of emissions-blind flying is ending, and strategic adjustments are now mandatory for corporations balancing cost control with escalating ESG commitments.

According to Harbison, the most significant threat hanging over Australian aviation is the intense pressure to decarbonise, driven by governments, investors, corporate buyers, employees, and the public. "For Australian aviation, this really is the calm before the storm," Harbison cautioned.

Sustainable Aviation Fuel (SAF) is central to the decarbonisation strategy, yet domestic supply remains "minimal," with current government moves focused on "pilots and prototypes, not industrial scale”. Harbison stressed that without industrial-scale production and blending infrastructure, SAF remains a "high-cost, long-term problem" that airlines cannot solve alone. The key missing ingredient from the government is certainty - specifically, "firm, legislated targets or mandates to send a signal to investors". This regulatory clarity, combined with tighter carbon reporting and ESG disclosure rules, will force airlines and their corporate customers to act.

For corporate travel, the implications are profound: "If airlines can’t cut emissions, corporates can’t meet their own climate targets," he stated. Harbison suggested that travel managers must pivot their strategy, balancing cost against ESG commitments by embracing more intra-regional travel, hybrid substitution of travel, and more selective long-haul flying.

Harbison identified a lack of supply as a critical structural issue, noting that airlines are constrained by severe supply chain bottlenecks, unable to procure "aircraft, engines, widgets or even seats fast enough." Airbus and Boeing have a combined order backlog of approximately 15,000 aircraft, a backlog expected to take the rest of the decade to clear.

This squeeze impacts airlines on three fronts: cost (older, less efficient fleets stay flying longer, requiring more maintenance), emissions (higher carbon output is locked in by older fleets), and network flexibility (airlines cannot grow to meet demand). Harbison highlighted that Qantas's average fleet age is about 16.4 years, significantly older than competitors like Singapore Airlines (around 8.1 years).

Layered over this is a workforce crisis, with global shortages of pilots, engineers and air traffic controllers. In Australia, the maintenance workforce is ageing, and the training pipeline isn't keeping pace. Harbison asserted that this tight, unionised labour market increases both staffing costs and operational risk, meaning "without skilled people, the metal doesn’t fly".

Another challenge, he indicated, stems from Australia operating one of the most concentrated domestic aviation markets globally, with the Qantas and Virgin Australia jet groups controlling about 98% of capacity. Harbison described the duopoly as limiting "real choice", leading to higher fares, dampened innovation, and weaker incentives for customer service improvement.

He argued that government policy must focus on ensuring low barriers to entry and aggressively monitoring the majors' competitive responses. The primary choke point is Sydney Kingsford Smith Airport. "If you can’t get into Sydney, you don’t have a serious airline," Harbison stated. He called for a review of the "ridiculous 15-minute slot rule" and the curfew, noting that modern aircraft are much quieter.

The long-term solution lies in Western Sydney’s Nancy Bird International Airport, which Harbison views as a "once in a lifetime, clean-sheet opportunity" to enable a genuine third competitor.

The structure of Australia’s international market is being fundamentally reshaped by the rise of long-haul Low-Cost Carriers (LCCs), which now operate as much as 20% of international seats at major Australian airports. Carriers like AirAsia X, Scoot, and VietJet are driving this shift. He noted that these carriers are rapidly penetrating the SME and cost-conscious business segment, many now offering premium economy products and bundled flexibility, making them increasingly viable for corporate accounts focused on cost efficiency. These carriers LCCs are not just changing leisure travel; they are "reshaping how Australia connects internationally - and how business travel will operate over the next decade".

Harbison ended on an optimistic, if critical, note regarding regional aviation. He argued that Australia has a severe regional connectivity problem, and the solution is Advanced Aerial Mobility (AAM), or electric flying. Harbison boldly predicted that by 2035, most professionals will have flown on a "real, commercial service" electric aircraft, citing Air New Zealand's current electric cargo trials as evidence.

Harbison’s final call to action was for Australia to implement clear policy, serious funding, and fleet transition support, or else "we’ll watch this revolution take off somewhere else" and end up importing the technology.