Deputy Prime Minister Michael McCormack
Deputy Prime Minister Michael McCormack

Deal with Qantas rival shot down

A FEDERAL decision to give Queensland farmers a multimillion-dollar export deal and Brisbane passengers cheaper international flights was overidden after intense lobbying from Qantas, a former senior staff member of whom is now the chief-of-staff to the Deputy Prime Minister.

The decision by Deputy Prime Minister and Transport Minister Michael McCormack to accede to Qantas' concerns about competitor Qatar Airways has shocked some of his own staff, including some who have resigned or returned to the public service.

The lucrative freight and passenger deal for Qatar Airways and Brisbane Airport Corporation was given the go-ahead by Mr McCormack's predecessor as transport minister, Darren Chester, in 2017.

But Mr McCormack has put the deal on ice.

The decision was made after he hired Damian Callachor, Qantas' former head of industry affairs, part of the airline's government relations team.

Some staff internally questioned among themselves whether there could be a perceived conflict of interest when making decisions that affected Qantas, given Mr Callachor's previous job.

But Mr McCormack's office said the decision was made in accordance with procedure, and the office included an aviation policy adviser separate to Mr Callachor.

Alarm bells also rang for some staff when Mr McCormack asked his department to include Qantas' concerns about the Qatar deal in a ministerial submission, which Mr McCormack then signed.

The anti-dumping concerns that appeared in the submission were almost verbatim with Qantas' concerns, highly placed sources say. That ministerial briefing was said to be dramatically different to the original.


Deputy Prime Minister and Transport Minister Michael McCormack now has a former senior Qantas staffer as his chief of staff.
Deputy Prime Minister and Transport Minister Michael McCormack now has a former senior Qantas staffer as his chief of staff.


It can be revealed:

* Mr Chester in 2017 wrote to then trade minister Steve Ciobo and then foreign minister Julie Bishop to advise of his decision.

* When Mr Chester was moved from the portfolio, the Infrastructure Department asked then deputy prime minister and transport minister Barnaby Joyce to reaffirm the decision, but it was not signed.

* When Mr McCormack replaced Mr Joyce in both positions, he asked his department to include Qantas's concerns in a ministerial submission, which he then signed. The concerns appeared in the submission almost verbatim, highly placed sources say.

* Qantas heavily lobbied Mr McCormack and Mr Callachor, who both attended meetings with Qantas board meetings.

It is believed a decision could be made soon, but it is likely it will not be in the same form as what Mr Chester approved.

Qatar can still not fly into Queensland.

Qatar did not comment, but a Brisbane Airport Corporation spokeswoman said: "BAC has been working with Qatar for some time to bring a service to Brisbane, as we believe Queenslanders ought to have the same access to alternative routes and airlines as every other Australian.

"A daily service would deliver Queensland exporters more than 6000 tonnes of export capacity each year, or between 10 and 17 tonnes of cargo each flight.

"The freight opportunities for Queensland producers would predominantly be in the export of food, including beef and meat products, and perishables such as fruit and vegetables."


Qantas planes at Brisbane’s domestic airport.
Qantas planes at Brisbane’s domestic airport.


A spokesman for Mr McCormack said decisions about airlines' access to Australian airports were always made as part of air service agreement negotiations between the Australian Government and other nations bilaterally.

"Qatar Airways, like many airlines, has made requests seeking an opportunity to have further access to Australian airports," the spokesman said.

"The chief of staff did attend a meeting with the Qantas board, alongside a deputy secretary from the department and the Deputy Prime Minister."

Asked if there was a conflict of interest with Mr Callachor dealing with Qantas matters or probity processes in place, the spokesman said: "It was widely known Mr Callachor had worked for Qantas.

"I can assure the Australian public Mr Callachor is doing what he was employed to do, which is advise on a range of policy matters and manage the employment of my office staff, which also includes a dedicated Aviation policy adviser."

A Qantas spokesman said the Australian Government's decision in relation to traffic rights between Australia and Qatar was similar to the approach being taken by the US and EU.

"You would expect the national carrier to have regular dialogue with aviation ministers," the spokesman said.

Asked if it had unrivalled access to Mr McCormack because of its relationship with Mr Callachor, it said: "No, our relationship with the current aviation minister's office is consistent with how we have worked with each previous minister and shadow minister.

"It's important that the national carrier - Australia's largest international, domestic and regional operator, carrying 55 million passengers per year and employing over 30,000 people - has regular dialogue with both sides of politics."