Australian Federal Police deputy commissioner Michael Phelan says police will allege the plot to bring down a passenger jet included a failed attempt to place an improvised explosive device on an Etihad flight out of Sydney on July the 15th.
Forty-nine year-old Khaled Mahmoud Khayat allegedly accompanied his brother to Sydney's international airport ahead of an Etihad flight to Abu Dhabi, knowing his luggage contained a military-grade explosive.
He and a 32 year-old man, both from south-west Sydney, are each charged with two counts of acting in preparation for, or planning, a terrorist attack.
Commissioner Phelan says the alleged plan was one of the most sophisticated ever attempted on Australian soil and was prepared with the support of IS.
"The charges that we are alleging relate to two specific events. The first related to an aborted attempt to place an IED on an Etihad flight out of Sydney on 15 July this year. At no stage did the IED breach airline security. Components of this IED were sent through international air cargo by ISIL operatives through to the accused men in Australia. With assistance from the ISIL commander, the accused assembled the IED, so the components of the IED, into what we believe was a functioning IED to be placed on that flight."
Authorities allege a second attack was planned after the first plot failed.
It involved an attempt to build an improvised chemical dispersion device to release colourless toxic gas.
Justice Minister Michael Keenan says there will be extra screening for air cargo, and the federal government will continue to assess what's been learned from the alleged conspiracy.
He says if proven, it would be one of most serious plots ever planned on Australian soil.
"The idea that we have people in the community that would commit an atrocity like this, that they would be thinking about doing something like this, is really quite confronting and indeed very sobering."
The Justice Minister claims it's the 13th time law enforcement agencies have prevented an attack occurring in Australia.
The two men have appeared at Parramatta Local Court in Sydney and the matter has been adjourned until November 14.
Their lawyer is Michael Coroneos.
"At the moment all I can say is they are entitled to the presumption of innocence. Once the brief of evidence is served we can assess their legal position. I really can't say anything more at the moment. "
A third man remains behind bars, held under special anti-terrorism laws, and can be detained until the weekend.
As Muslims gathered for Friday prayers, the community has again been asked to speak out against extremism.
Dr Jamal Rifi is a prominent figure in the Sydney Muslim community working to promote anti-radicalisation and social cohesion.
He says the community has worked tirelessly over the last few years to combat radicalisation and will continue to do so.
"I have seen in the last couple of years a mass interaction between members of our communities, about delegitimising ISIS propaganda, and we hope we have reached the majority of targeted community members. Unfortunately if one slips through the net that is one too many. But we need to keep our effort into educating our community that our members are targets and they are the victims of such an ideology and our community needs to step up the effort to further delegitimise every aspect of their hateful ideology."
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