International Air Services Commission Policy Statement 2018

The instrument contains several core concepts that determine how the Commission assesses allocations of international capacity. These are defined and then deployed as operational tests in Part 3 and constraints in Parts 4 and 5.

1. Reasonable capability criterion (s8)

   • Core definition: the extent to which all Australian carriers that are, or would be, permitted to use the capacity allocated under a determination are reasonably capable of obtaining any licences, permits or other approvals required to operate on and service the route and of using the capacity allocated.
   • The instrument clarifies that this criterion applies to carriers who would be entitled to use the capacity, including those entitled by conditions the Commission might impose (note following s8). The criterion therefore captures both direct operators and carriers benefiting through conditions such as permitted joint services.

2. Additional criteria (s9)

   • A non-exhaustive list grouped into categories:
     • Competition criteria (s9(a)-(g)): includes fostering competition between Australian and foreign carriers; number of carriers and existing capacity distribution; likely consumer impacts such as fares, choice, innovation, frequency; desirability of own aircraft operations over code share joint services; benefits of one applicant over another having regard to commercial arrangements; determinations or decisions by ACCC or the Australian Competition Tribunal; comparable foreign agency decisions or foreign aeronautical authority decisions.
     • Tourism and trade criteria (s9(h)-(j)): promotion, market development, investment proposed by applicants; beyond-point service possibilities; availability of low-cost, reliable air freight for trade.
     • Relevant information from government (s9(k)): any information the Commission has obtained from Australian government agencies or statutory authorities it considers relevant.
     • Any other relevant consideration (s9(l)): an explicit catch-all.

3. Route (s4 definition)

   • Route is defined as the full set of entitlements available under a particular bilateral arrangement, with all combinations of origin, destination, intermediate and beyond points constituting a single route. This aggregates entitlement analysis to the bilateral level.

4. Decision-path triggers (Part 3)

   • The instrument draws sharp distinctions based on whether available capacity is limited under the bilateral (s11), whether there is sufficient capacity for all applicants and no adverse submissions (s12(2)), and other cases such as multiple applicants with insufficient capacity or adverse submissions (s12(3), s13). Those triggers control whether the Commission need only consider reasonable capability, or whether it must or may have regard to additional criteria.

5. Renewal presumption (s14)

   • A presumption in favour of renewing an incumbent’s allocation: the Commission "must make the same allocation" unless satisfied the allocation is no longer of benefit to the public (note to s14 and application of paragraph 8(2)(a) of the Act). The instrument describes when an allocation is "generally" no longer of benefit (failed to service the route effectively, other applications exist, and a different allocation would be of greater benefit having regard to reasonable capability and relevant additional criteria) (s14(2)).

6. Transfer application scrutiny (s18)

   • For transfer applications, the Commission is to have regard to the reasonable capability criterion and specific matters including the undesirability of transfers that would permit speculative activity and an undesirability, except in exceptional cases, of approving transfers to carriers that have never exercised an allocation or have only done so for less than six months (s18(2)(b)(i)-(ii)).

7. Duration rules (s20)

   • For routes where capacity is not limited under the bilateral, the period "should" be fixed at 99 years. For other cases default periods apply: 3 years for interim, 5 years for non-interim determinations, unless the applicant has requested a shorter period (s20(2)-(4)).

8. Full-use conditions and review criteria (s24)

   • The Commission should specify as short a non-use period as reasonably possible; generally not more than two years except in exceptional circumstances (s24(1)). When reviewing for non-use, the Commission may consider a set of specific matters including whether other applicants exist, seasonal demand variations, unforeseeable circumstances preventing full use, and other relevant matters (s24(3)).

9. Joint services disclosure (s23)

   • When allowing joint international air services under paragraph 15(2)(e) of the Act, the Commission should include a condition requiring reasonable steps to inform passengers at booking that other carriers may operate the flight.

10. Application timing and transitional protection (s26)

• The instrument applies to applications received on or after its commencement; applications received earlier are to be decided under the repealed Policy Statement No.5 as if the repeal had not occurred (s26(1)-(2)).

These concepts interact to define both procedural default rules and discretionary pathways. The instrument repeatedly affirms that its criteria apply equally to allocations exercised through own aircraft, code share arrangements and other joint services (see notes in Parts 2 and 3), thereby aligning substantive assessment across different commercial implementations.

Primary obliged parties

• Australian carriers who apply for determinations allocating international capacity, including applications for initial allocations, renewals, variations, transfers and interim determinations. The definition of "applicant" in s4 covers any Australian carrier that has applied to the Commission for such determinations. These carriers bear the compliance cost of preparing applications that demonstrate the reasonable capability criterion and, where relevant, address additional criteria.

Decision-maker and administrative actors

• The International Air Services Commission is the decision-maker required to apply the policy guidance when exercising statutory discretion under the Act (s6(1)-(2)). The instrument also contemplates the Commission obtaining and having regard to information from other Australian government agencies and statutory authorities (s9(k)). The ACCC and the Australian Competition Tribunal are specified as sources of determinations/decisions the Commission may have regard to in competition assessments (s9(f)), while comparable foreign agencies and aeronautical authorities are also relevant (s9(g)).

Secondary affected parties

• Foreign carriers and code share partners. The instrument expressly treats allocations exercised through code share and other joint international air services equivalently to own aircraft operations (see notes in s7 and s10), so foreign carriers that would operate marketed seats on behalf of Australian carriers are implicated by conditions the Commission may impose and by the Commission’s consideration of competition, consumer and trade effects.
• Consumers, tourism interests and importers/exporters. The additional criteria expressly include likely consumer effects such as fares and choice (s9(c)), promotion and market development (s9(h)), beyond-point opportunities (s9(i)), and freight availability for trade (s9(j)). While these are categories for Commission consideration rather than statutory entitlements, they identify stakeholder groups whose interests the Commission is required to consider.
• Third parties seeking to oppose or support determinations. The instrument creates thresholds where the receipt of "adverse submissions" alters the criteria the Commission may or must consider (see ss12(2)-(3), 16(3)-(4), 17(2)-(3)). Interested parties who lodge timely submissions can change the Commission’s scope of consideration from merely the reasonable capability criterion to a broader assessment invoking additional criteria.
• Entities seeking to acquire allocations via transfer. The instrument heightens scrutiny of transfer applicants by instructing the Commission to consider whether approving a transfer would permit or encourage speculative activity and whether the transferee has previously exercised allocations for a meaningful period (s18(2)(b)(i)-(ii)). This affects potential secondary-market participants and intermediaries.

Who pays and who benefits

• Costs are primarily borne by applicants (preparing evidence of capability, compliance with conditions including passenger disclosure, operational readiness) and carriers who must implement conditions and meet full-use obligations. The instrument privileges incumbent carriers through a presumption favouring renewal (s14), which is a structural advantage received by existing allocation-holders. Government agencies supplying information to the Commission may incur information-preparation costs, though the instrument is framed as guidance rather than a statutory duty on those agencies.

Decisions and behavioural impact

• The Commission decides allocations, renewals and variations guided by the instrument’s criteria. Carriers will therefore be incentivised to prioritise documentary proof of licences, permits, approvals and operational readiness, to develop own-aircraft proposals where that is preferred by the instrument (s9(d)), to avoid speculative transfer strategies, and to commence operations within the periods the Commission is likely to expect, notably the two-year default for full-use carve-outs (s24). Applicants who wish to trigger a narrower assessment only under the reasonable capability criterion will benefit from ensuring either that capacity is unlimited under the bilateral (s11) or that there is sufficient available capacity and no adverse submissions (s12(2)).

Geographic and market scope

• The instrument applies to allocations of entitlements under bilateral international aviation arrangements. The definition of "route" groups entitlements under a single bilateral into a single assessment unit, which affects how applications that involve combinations of origins, destinations and beyond points are assessed (s4).

Transition and timing

• The instrument applies to applications received on or after commencement; applications received earlier remain governed by the prior Policy Statement No.5 (s26). The instrument commenced the day after registration per the commencement table at s2.

In sum, the principal, immediate effect is to structure how the Commission assesses benefit to the public and hence how Australian carriers and interested third parties prepare and contest applications for international route capacity.

This instrument does not itself create criminal or civil offences. It sets out duties of procedure and consideration for the Commission and prescribes operational expectations for applicants and carriers. The key duties and rights, as expressed in the instrument, are as follows.

Duties and obligations of the Commission (expressed as guidance)

• Perform functions so as to achieve the object of the Act, namely to promote economic efficiency through competition in the provision of international air services by fostering, encouraging and supporting competition among Australian carriers (s6(2)). The instrument frames the Commission’s role within that statutory object.
• Apply the reasonable capability criterion in all assessments of benefit to the public (repeated throughout Part 3, e.g. ss11(2)(a), 12(2)(c), 13(2)(a), 16(3)(a), 17(2)(a), 18(2)(a)). The Commission "is to have regard to" this criterion in most decision pathways.
• Apply additional criteria where the instrument prescribes or permits them. The Commission "may have regard to" or "is to have regard to" additional criteria depending on context (s9; see also ss12(3), 13(2)(b), 15(2)(b), 16(4), 17(3), 18(2)(c)).
• Limit consideration to the reasonable capability criterion alone in prescribed low-risk contexts: where capacity under the bilateral is unlimited (s11), or where there is sufficient capacity for all applicants and no adverse submissions (s12(2)), or where reviews are initiated and no adverse submissions are received (s16(3), s17(2)).
• Presume in favour of renewal for incumbents when considering renewals, subject to the test in paragraph 8(2)(a) of the Act and the factors in s14(2). The Commission must make the same allocation unless satisfied the allocation is no longer of benefit to the public (s14 and note).
• In transfer application reviews, consider the specified anti-speculation and minimum exercise period considerations (s18(2)(b)(i)-(ii)).
• When allowing joint international air services, include a condition that the Australian carrier take reasonable steps to inform passengers at booking if other carriers may operate the flight (s23).
• When specifying a period during which capacity need not be fully used, specify as short a period as reasonably possible and ordinarily not more than two years except in exceptional circumstances (s24(1)).

Applicants’ duties and implied obligations

• Applicants must supply evidence enabling the Commission to assess the reasonable capability criterion relevant to all carriers permitted to use the capacity, including compliance with licences, permits and approvals, and capacity to operate the route (s8).
• Applicants proposing joint international air services should expect a condition to require passenger disclosure at booking (s23).
• Applicants seeking transfers should anticipate additional scrutiny targeted at speculative behaviour and at transferees with minimal prior exercise of allocations (s18(2)(b)(i)-(ii)).

Rights and procedural implications for third parties

• Third parties have effectively a right to influence the scope of the Commission’s assessment by lodging submissions. The receipt of adverse submissions expands the criteria the Commission may consider (see ss12(2)-(3), 16(3)-(4), 17(2)-(3)). That gives stakeholders a procedural lever to broaden the Commission’s review from capability alone to include wider competition and consumer issues.
• Incumbent carriers have a procedural advantage via a presumption in favour of renewal (s14). That right is conditional: it can be displaced if the Commission is satisfied the allocation is no longer of benefit to the public using the articulated tests.

Discretionary elements

• The instrument contains several discretionary phrases permitting the Commission latitude: "may have regard to" additional criteria (s12(3), s13(2)(b) etc), "should" in some duration contexts (s20 uses "should"), and "exceptional circumstances" standards (s21, s24(1)). These leave the Commission with manoeuvring room to exercise judgment within policy parameters.

Interaction with statutory powers

• The instrument operates as the Commission’s policy under s11 of the Act. It does not itself alter statutory entitlements in the Act but constrains or guides the Commission’s exercise of statutory discretion by directing which criteria should be determinative in particular factual circumstances (see s3 Authority and s6(1)-(2)).

Record-keeping and evidentiary implications

• Because the instrument requires the Commission to have regard to inter-agency information, ACCC decisions and foreign agency decisions where relevant, applicants may need to assemble documentary material that addresses these points (s9(f)-(g), s9(k)). The Commission’s approach will be evidence-driven, particularly where additional criteria are invoked.

In summary, the key duties fall on the Commission to apply the specified criteria according to the decision pathway, and the main obligations fall on applicants to produce evidence on capability, readiness, and, where relevant, competition and trade effects. Third parties have procedural opportunities to expand the scope of enquiry via submissions. The instrument formalises these rights and duties without creating new statutory offences or private rights of action.

This policy statement does not itself create criminal penalties or civil enforcement mechanisms. It is a statement of policy and guidance for the International Air Services Commission in performing functions under the Act, rather than a statute that prescribes new offences or monetary penalties. However, the instrument interacts with the Commission’s statutory powers under the Act, which include the ability to make, vary, suspend, or revoke determinations allocating capacity. The enforcement and sanctioning mechanisms that can result from applying this instrument therefore operate through the Act’s existing administrative powers rather than through penalties specified in the policy statement.

Relevant enforcement mechanisms and consequential impacts under the Act, as guided by this instrument, include:

• Confirmation, variation, suspension or revocation of determinations (s24(2)(a) refers to the Commission deciding whether to confirm, vary, suspend or revoke a determination under subsection 23(1) of the Act). These are administrative actions with direct commercial and operational consequences for carriers, including loss of capacity rights.
• Refusal to renew a determination because an allocation is no longer of benefit to the public (paragraph 8(2)(a) of the Act as discussed in s14). Incumbents risk losing allocation if the Commission is satisfied renewal would not benefit the public, which is an administrative consequence rather than a statutory penalty.
• Increased scrutiny and potential refusal of transfer applications where the Commission considers approval would permit speculative trading or the transferee has not meaningfully exercised the allocation (s18(2)(b)). Denial of a transfer is a regulatory outcome that can affect commercial value.

How enforcement discretion is triggered

• Non-compliance with conditions included in a determination can trigger a review for cause under section 10 of the Act and subsequent action by the Commission under paragraph 23(1)(b) (see Division 4, s16). The instrument instructs that, where a review for cause concerns full-use conditions, the Commission may have regard only to the limited set of criteria in s24(3)(a)-(d) and need not consider other matters (s16(2)). The administrative outcome of such a review can be suspension, revocation, confirmation or variation of the determination (referenced in s24(2)(a)).

Administrative burden and practical enforcement

• The instrument raises the practical enforcement burden on carriers through operational conditions. For joint international air services, carriers are to take reasonable steps to inform passengers at the time of booking if other carriers may operate the flight (s23). Failure to implement such a condition may be treated as non-compliance with the determination, which can lead to review for cause leading to administrative variation or revocation.
• For full-use conditions, the Commission should ordinarily impose a short period for commencement and full use, generally not more than two years absent exceptional circumstances (s24(1)). Failure to meet the full-use condition within that period may expose the allocation to revocation or reallocation, which has commercial enforcement effect.

No specified pecuniary penalties within the instrument

• The instrument does not specify fines, civil penalties, or criminal offences. Rather, enforcement is effected through the Commission’s statutory remedial powers under the Act. Any pecuniary or other legal enforcement consequences would need to be sourced from the Act itself or other relevant statutes; this policy statement simply guides how the Commission exercises its discretion under the Act.

Implications for carriers of administrative enforcement

• The practical risk for carriers is administrative: loss or variation of capacity, which can affect commercial plans, network schedules, investment and partnership arrangements. Carriers should therefore treat conditions in determinations as binding operational obligations subject to review under the Act, and plan to evidence compliance proactively to avoid triggering review for cause.

In short, enforcement under this instrument is administrative rather than penal in form. The instrument constrains decision-making and sets expectations for the exercise of administrative powers under the Act, with the primary enforcement tool being the Commission’s ability to confirm, vary, suspend or revoke determinations.

This policy statement is an instrument made under section 11 of the International Air Services Commission Act 1992 and operates as guidance for the Commission’s exercise of functions under that Act (s3). Its interaction with other laws and regulatory bodies is structured primarily by the additional criteria it lists and by references to other decision-making bodies. The instrument creates formal pathways for cross-referencing, and it thereby imports external regulatory considerations into the Commission’s assessment.

Key interactions expressly provided for in the instrument

• Competition regulation (s9(f))

  • The Commission is directed to have regard to any determinations, decisions or notifications made by the Australian Competition and Consumer Commission (ACCC) or determinations made by the Australian Competition Tribunal in relation to an Australian carrier using capacity on the route. This integrates the ACCC’s competition assessments into the Commission’s consideration of "benefit to the public", making ACCC activity a relevant input to capacity allocation decisions.

• Foreign regulatory decisions and aeronautical authorities (s9(g))

  • The instrument requires the Commission to have regard to determinations, decisions or notifications made by foreign agencies performing comparable functions to the ACCC, or by foreign aeronautical authorities, in relation to carriers using entitlements under the bilateral. This embeds the regulatory context on the foreign side of bilateral arrangements into the Commission’s evaluation.

• Information from Australian government agencies (s9(k))

  • The Commission may have regard to any information obtained from Australian government agencies or statutory authorities that it considers relevant. This increases administrative interdependence and means that other agencies’ analyses and data can materially influence capacity decisions.

• Interaction with the Act’s own procedures (Parts 3-5)

  • The policy statement is designed to be read as an interpretation of how the statutory "benefit to the public" test and the Act’s renewals, variations, transfers and reviews should be applied. It references statutory provisions directly (for example, paragraph 15(2)(c) permitting conditions that capacity be fully used and paragraph 15(2)(e) permitting joint international air services) and instructs the Commission how to structure reviews and determinations in light of those statutory powers (see Division 3 and Division 4).

Areas where the policy statement interacts indirectly with other legal regimes

• Consumer law and disclosure obligations

  • The instrument requires a booking-time passenger disclosure condition where joint services are permitted (s23). This interacts with consumer protection expectations and potentially with the Australian Consumer Law where misleading or deceptive conduct could be relevant to representations made at booking. The policy statement does not specify legal liability under consumer law, but carriers should be mindful that disclosure obligations imposed by determinations sit alongside statutory consumer protection obligations.

• Aviation safety and licencing regimes

  • The reasonable capability criterion explicitly requires assessment of the carrier’s ability to obtain licences, permits and other approvals required to operate on the route (s8). Those approvals are typically governed by aviation safety and regulatory regimes administered by CASA or foreign aeronautical authorities. The instrument therefore ties Commission decision-making to compliance with licensing and safety regimes without specifying the standards of those regimes.

• Contract and code share arrangements

  • The instrument signals a preference for fostering own aircraft operations over code share or other joint arrangements (s9(d)). That policy preference may influence the enforceable conditions the Commission imposes on allocations and thereby indirectly affect commercial contract structures between Australian carriers and foreign operators.

Implementation and administrative coordination

• Because the Commission may rely on government agency information and ACCC determinations, applicants will need to consider coordinating with those agencies where relevant. For example, if an applicant has a pending ACCC matter or a cooperation arrangement with a foreign carrier that is contingent on foreign regulatory approval, those interactions will be relevant to the Commission’s additional criteria assessment (s9(f)-(g), s9(k)).

Limitations on the policy statement’s legal force

• The instrument is guidance under the Act. It does not amend other statutes, create new offences, or alter the substantive jurisdiction of other regulatory bodies. Its legal effect is to direct how the Commission is to exercise discretion under the Act; other bodies retain their independent statutory functions and powers.

In summary, the policy statement formalises an integration of the Commission’s capacity allocation exercise with competition regulation, foreign aeronautical regulation, aviation licencing regimes and governmental advice. Carriers should plan applications with those intersecting regimes in mind, and expect the Commission to weigh outcomes and materials from those other legal domains in its decision-making.

The instrument itself contains limited explicit amendment history. What the text records is:

• The instrument was made on 20 March 2018 and commences the day after it is registered, for the whole instrument (s2 commencement table).
• The instrument is made under section 11 of the International Air Services Commission Act 1992 (s3).
• Schedule 1 records the repeal of the whole of International Air Services Policy Statement No.5. The effect is that the 2018 Policy Statement replaces Policy Statement No.5 for applications falling on or after its commencement, while s26(2) preserves the application of Policy Statement No.5 to applications received before commencement.

What the instrument does not record

• The instrument text does not include earlier amendment items, incremental changes or any later amending provisions. There is no recorded amending history within this document beyond the direct repeal of the prior Policy Statement No.5 and the transitional saving for pre-commencement applications (see s26(2) and Schedule 1).
• The instrument does not record any subsequent reissues, revocations, or further amendments within the text provided.

Implications for practitioners

• Because the instrument replaced Policy Statement No.5, practitioners must treat the 2018 instrument as the controlling policy for applications received on or after its commencement. For legacy applications received before commencement, Policy Statement No.5 remains applicable as if not repealed (s26(2)). Practitioners must therefore check application receipt dates carefully when advising clients and preparing submissions.
• The instrument sets a new set of policy benchmarks, such as the 99-year default for unlimited bilateral capacity (s20(2)), the two-year guideline for non-use periods (s24(1)), and the booking disclosure requirement for joint services (s23). These changes are operationally significant even though they are policy guidance rather than statutory amendments.

Record of origin and authority

• The instrument is signed or made by the Deputy Prime Minister and Minister for Infrastructure and Transport, Michael McCormack, and expressly identifies the statutory authority under which it is made (s3). That identifies the political and administrative provenance of the policy statement.

No later amendments recorded in the source so cannot list post-2018 changes

• The provided instrument text contains no subsequent amendments or version history beyond the replacement of Policy Statement No.5. If a practitioner requires information about any subsequent changes after the date on the instrument, they must consult the official legislative database or the Commission for up-to-date amendment records.

For compliance and historical tracking, practitioners should record the date of the instrument’s commencement and verify whether any further instruments or statutory amendments have been made to either the Act or subsequent policy statements since 20 March 2018.

The policy statement text provided does not include, reference, or summarise any litigation concerning the instrument or its provisions. It does not name any cases, nor does it recount judicial interpretation of the policy statement. The instrument functions as administrative guidance; whether its prescriptions have been subject to judicial review, statutory interpretation cases, or tribunal proceedings is not documented in the text supplied.

Consequences of absent litigation history in the source

• Lack of reported litigation in the instrument means that, within the instrument itself, there is no judicially settled construction of its terms. The provisions that use discretionary language, such as "may have regard to", "need not have regard to" and "exceptional circumstances", remain untested and open to administrative interpretation and judicial review if challenged.
• Key provisions that present practical significance for carriers and third parties, for example the 99-year duration recommendation (s20(2)), the presumption in favour of incumbent renewal (s14), the default two-year maximum for non-use carve-outs (s24(1)), and the anti-speculative transfer considerations (s18(2)(b)(i)-(ii)), have not been judicially explained in the instrument itself. Whether courts or tribunals would defer to or limit the Commission’s application of those policies remains an open question on the basis of this instrument alone.

What to expect if litigation arises

• If an affected party sought judicial review of a Commission decision said to depart from or misapply the policy statement, the court or tribunal would likely examine the Act’s statutory text and the policy statement’s guidance to determine whether the Commission acted within the scope of statutory power and followed lawful administrative process. The instrument’s repeated framing of the Commission’s duties as matters it "is to have regard to" would be relevant to arguments about whether the Commission gave relevant considerations proper weight or omitted to consider required matters.
• Challenges are most likely to arise where the Commission exercises broad discretion,such as in renewals where incumbency is at issue (s14), in decisions to revoke allocations for non-use (s24(2)), or in refusing transfers on anti-speculation grounds (s18). Any litigation would illuminate how courts balance deference to administrative expertise with legal standards for considering statutory criteria.

Practical note for advisers

• In the absence of reported litigation in the instrument, practitioners must treat the policy statement as persuasive administrative guidance for the Commission’s decision-making process. They should anticipate that the Commission will adopt the guidance but also prepare to make submissions on interpretation where the instrument leaves room for judgement, for example what counts as "exceptional circumstances", how the Commission weighs competition and consumer effects, and the meaning of "reasonably capable" under the reasonable capability criterion (s8).

In summary, the source contains no litigation history. This creates an evidentiary blank for those wanting settled legal precedents about interpretation and judicial review of the policy statement; practitioners must therefore anticipate interpretative uncertainty and prepare application materials robustly to address the policy’s discretionary elements.

This instrument contains several operational and interpretive features that can catch applicants, incumbents, and interested third parties if they do not plan carefully. The following are concrete pitfalls, each cited to the relevant provision in the instrument and explained in practical terms.

1. Presumption in favour of incumbents but not an absolute shield (s14)

   • Gotcha: Incumbents might assume renewal is automatic. The instrument sets a presumption in favour of making the same allocation, but the Commission must still be satisfied that the allocation remains of benefit to the public. If the incumbent has "failed to service the route effectively" and there are competing applications, renewal can be refused (s14(2)). Practitioners should not rely on incumbency as absolute protection; incumbents need to maintain evidence of effective servicing and responsiveness to competition and consumer considerations.

2. "Reasonable capability" extends to all carriers permitted to use the capacity, including those entitled via conditions (s8)

   • Gotcha: An applicant’s capability evidence must cover not only the named applicant but any carriers that would be permitted to use the capacity under conditions imposed by the Commission (note to s8). If a determination allows code sharing or the carrier intends to sublicense seats, the Commission will assess whether those parties can obtain licences and use the capacity. Applicants relying on third-party partners must therefore provide evidence of their partners’ capability.

3. Adverse submissions change the scope of review (ss12(2)-(3), 16(3)-(4), 17(2)-(3))

   • Gotcha: The Commission’s burden of inquiry expands when it receives adverse submissions. In the presence of an adverse submission, the Commission may consider additional criteria beyond capability. Timing is therefore critical. Interested parties can broaden the Commission’s analysis by lodging material within the consultation period; applicants should monitor for and respond promptly to adverse submissions.

4. 99-year default for unlimited bilateral capacity (s20(2))

   • Gotcha: Where capacity is not limited under the relevant bilateral, the instrument says the period "should" be fixed at 99 years. Applicants and advisers must read this as a strong policy preference. This can have long-term commercial consequences, such as locking in terms and reducing reallocation opportunities. Practitioners should consider whether a long tenure is commercially desirable and prepare to request shorter terms if that better suits business strategy (s20(3)).

5. Interim determinations only in "exceptional circumstances" and the limited default periods (s21, s20(3)-(4))

   • Gotcha: The Commission should make interim determinations only in exceptional circumstances (s21), and default non-interim terms are five years (s20(4)(b)). Applicants seeking temporary allocations should be prepared to justify "exceptional circumstances" and cannot rely on interim protection as routine.

6. Transfers scrutinised for speculative activity and practical exercise (s18(2)(b))

   • Gotcha: Transfer applicants face explicit scrutiny focused on speculative trading and on whether a transferee has ever exercised an allocation for at least six months. Carriers attempting to buy or sell allocations as a commercial asset without a bona fide operational plan may be refused. Transfers for secondary-market monetisation are likely to be examined closely.

7. Full-use conditions and the practical two-year cap (s24(1))

   • Gotcha: When the Commission specifies a period during which capacity need not be fully used, it should be "as short as reasonably possible" and generally not exceed two years. Start-up carriers that expect lengthy set-up times must either demonstrate exceptional circumstances that justify a longer non-use period or risk revocation if they fail to commence operations within a short timeframe.

8. Joint services require booking-time passenger disclosure (s23)

   • Gotcha: If a determination permits joint international air services, the carrier should expect a condition that requires reasonable steps to inform passengers at booking that other carriers may operate the flight. Carriers must ensure booking systems and agent communications can implement this disclosure; failure to do so may be treated as non-compliance.

9. Route aggregation under bilateral entitlements (s4)

   • Gotcha: The definition of route aggregates all entitlements under a bilateral into a single "route". Applications that attempt to segment offerings within a bilateral may be assessed together, which affects allocation strategy. Practitioners must structure applications with the bilateral-level aggregation in mind.

10. Commission's reliance on other agencies and foreign decisions (s9(f)-(g), s9(k))

    • Gotcha: The Commission may have regard to ACCC or foreign agency decisions and to information from government agencies. Applicants should not assume that a favourable application to the Commission will be insulated from competition or foreign regulatory concerns; parallel regulatory approvals or clearances may be relevant and should be managed proactively.

11. The instrument is guidance under the Act rather than a statute creating private rights (s6(1))

    • Gotcha: The policy statement is framed as guidance. Applicants who assume that the instrument creates enforceable private rights against the Commission or third parties will be incorrect. Disputes will turn on the Act and administrative law principles when decisions are made.

12. Transitional treatment for pre-commencement applications (s26)

    • Gotcha: Applications received before the instrument’s commencement remain governed by the repealed Policy Statement No.5. Filing close to the instrument’s commencement date without careful timing could mean differing policy tests apply. Practitioners must check the commission’s receipt date and applicable policy.

13. Vagueness in "exceptional circumstances" and "as short as reasonably possible" standards

    • Gotcha: Terms such as "exceptional circumstances" and "as short as reasonably possible" are open-textured. Applicants should prepare granular factual evidence to support claims that a longer non-use period or an interim determination is warranted.

14. The instrument’s "need not have regard to any other matter" language in certain pathways (for example s11(2)(b), s12(2)(d))

    • Gotcha: In limited contexts the Commission is guided to focus only on reasonable capability. Parties who want broader issues considered must either ensure the factual circumstances do not trigger those narrower pathways or ensure an adverse submission is lodged to expand the Commission’s remit.

These practical pitfalls can be addressed by careful drafting of applications, early engagement with the Commission and other relevant regulators, prompt responses to submissions, and assembling evidence on licences, permits, commercial arrangements and operational readiness.

This section sets out practical, source-grounded steps for applicants, incumbents and interested third parties to align with the policy statement’s expectations. Each step maps to the specific provisions of the instrument and highlights documentary and operational actions that reduce the risk of adverse administrative outcomes.

1. Prepare a robust reasonable capability submission (s8)

   • What to present: documentary evidence showing the carrier and any carriers that would be permitted to use the capacity can obtain necessary licences, permits and approvals, and have the operational capacity to use the allocation.
   • Examples of evidence: certified copies of existing aviation licences, evidence of applications for necessary foreign permits, aircraft lease or ownership agreements, crew training and rostering plans, ground handling contracts, slot approvals where relevant, financing arrangements demonstrating funding for aircraft and operations, and a clear timetable to commence services.
   • Why: the reasonable capability criterion is applied in virtually every pathway and is a threshold consideration (ss11-13, 16-18).

2. Address potential third-party capability when proposing joint services or code shares (s8, s23)

   • Action: If proposals involve code sharing or joint international air services, include evidence of the foreign operating carrier’s regulatory standing, safety records, contractual commitments, and any requisite foreign approvals.
   • Operational requirement: Plan booking systems and agent scripts to implement the passenger disclosure at time of booking that other carriers may operate the flight, because the Commission should include such a condition where joint services are allowed (s23).

3. Anticipate competition and consumer criteria (s9(a)-(g))

   • Action: Where there is a realistic prospect of competition-based scrutiny, prepare analysis addressing likely consumer impacts: expected fare levels, proposed frequencies, product differentiation, innovation plans, and freight capacity. Provide market analysis, demand forecasts and proposed frequency schedules.
   • Inter-agency coordination: If there are ACCC matters or past determinations, include relevant documentation and responses (s9(f)). If stable commercial arrangements depend on foreign regulatory approvals, include the foreign agency material (s9(g)).

4. Engage early with government agencies likely to supply relevant information (s9(k))

   • Action: Notify and, where appropriate, engage the ACCC and any relevant Australian government agencies early in the application process to obtain any determinations, clearances or statements of position that could assist the Commission’s decision-making. Document these contacts and provide the Commission with copies of relevant correspondence.

5. Manage timing and submissions to control the scope of assessment (ss12(2)-(3), 16(3)-(4), 17(2)-(3))

   • Strategy: If an applicant wants the Commission to assess only reasonable capability, attempt to ensure the factual pathway applies: either capacity is unlimited under the bilateral (s11) or there is sufficient capacity for all applicants with no adverse submissions (s12(2)). Conversely, interested third parties who want a broader assessment should lodge adverse submissions within the Commission’s consultation period to trigger consideration of the additional criteria.
   • Procedural vigilance: Track consultation windows and be ready to lodge timely evidence.

6. Plan for commencement and full use periods (s24)

   • Short-term planning: If an applicant anticipates difficulty commencing operations within a short period, provide evidence of reasonable lead times and document any factors that justify exceptional circumstances to obtain a longer commencement period.
   • Evidence to show excusable non-use: If non-use may be attributable to unforeseeable circumstances (s24(3)(c)), collect contemporaneous evidence (for example, regulatory delays, supplier failures, force majeure events, public health restrictions) to support the claim at review.

7. Address transfer application scrutiny (s18)

   • For sellers: If seeking to transfer allocations, prepare documentation showing the transferee’s bona fide commercial plan, evidence that the transfer will not facilitate speculative trading, and evidence that the transferee has exercised allocations meaningfully where applicable.
   • For buyers: Be prepared to show past exercise history where relevant and at least six months’ prior exercise if possible, or provide compelling reasons why the transferee should be treated as an exception (s18(2)(b)(ii)).

8. Consider duration requests strategically (s20)

   • If a shorter determination term is desirable, request one in the application. The instrument provides that, if an applicant requests a period less than default thresholds (interim <3 years, non-interim <5 years), the Commission should fix the period at the requested term (s20(3)). Applicants should set the requested period deliberately to achieve commercial aims.

9. Design contracts and commercial arrangements with an eye to the Commission’s preference for own aircraft operations (s9(d))

   • Where feasible, prepare and present own-aircraft proposals; when reliance on code shares is necessary, provide supportive analysis showing why own operations are not realistic and how code sharing will benefit consumers and competition, because the instrument expresses a desirability for own aircraft operations over marketing seats on foreign operators.

10. Where joint services are proposed, ensure booking and communications systems can deliver the disclosure (s23)

    • Practical steps: Update booking engine text, agent scripts and marketing material to meet a "reasonable steps" standard of informing passengers at booking that other carriers may operate the flight. Keep audit trails demonstrating the steps taken.

11. Maintain contemporaneous records to meet review for cause (s16, s24)

    • Record keeping: Document operational attempts to commence services, reasons for any delays, communications with suppliers and regulators, and marketing and investment plans. This documentation will be crucial if the Commission initiates a review for cause about full use.

12. Prepare to rebut claims of speculative activity (s18(2)(b)(i))

    • Evidence: Transaction documents, commercial rationale, operating plans, employment and infrastructure commitments, and financing arrangements can demonstrate that transfers or proposed transfers are not speculative.

13. Seek legal and regulatory advice early

    • Given the interplay with ACCC considerations, foreign regulatory regimes, and aviation licencing, engage counsel or regulatory advisers early in the process to map out likely evidence needs and to coordinate applications across agencies.

14. Check application receipt date in transitional situations (s26)

    • Procedural check: If filing around the instrument’s commencement date, verify whether the application will be governed by the new 2018 Policy Statement or the prior Policy Statement No.5. Filing date on the Commission’s receipt stamp will determine which policy applies (s26).

15. Monitor for "exceptional circumstances" precedent and Commission practice

    • Because the instrument leaves "exceptional circumstances" undefined, applicants should monitor Commission decisions for examples and adjust application strategy accordingly. If uncertain, applicants should set out a granular factual case that maps to likely interpretations of exceptional circumstances.

Summary of compliance practicalities

• Evidence focus: Primary compliance is documentary and operational: licences, permits, partner capabilities, financing, and operational readiness.
• Timing: Control over whether the Commission uses a narrow or broad assessment turns on whether adverse submissions are received and whether capacity under the bilateral is limited.
• Operational changes: Implement booking disclosures where joint services are proposed; be prepared to commence operations within short commencement periods unless exceptional circumstances are supported by evidence.
• Transfer strategy: Avoid pure trading strategies; buyers and sellers should prepare substantial business rationale documentation.

Following these steps will align applicants and interested parties with the policy statement’s criteria and procedural expectations, and reduce the risk of adverse administrative outcomes under the Act as guided by this instrument.