[A]t the end of the day the Senators can only make recommendations ...
Not correct.
Senators can also introduce legislation (other than legislation imposing tax) and vote to amend legislation.
The Bill changing the Civil Aviation Act to increase the size of the CASA Board is a
perfect opportunity for the Senators with strong opinions about aviation regulation to put their power and vote where their mouth is and amend the Bill and make real changes to aviation regulation. But you watch what they do.
That's why CASA and ATSB called their bluff.