The now-19-year-old is accused of bringing a firearm and fake bomb onto an aircraft at Avalon Airport, southwest of Melbourne, in March 2025.
About 160 passengers were on board the Jetstar plane, which was due to fly to Sydney.
The teen, who was 17 at the time, appeared in a children's court via video link on Wednesday as prosecutors applied for his case to be heard in either the county or supreme courts.
The prosecutor argued the penalties available in the children's court - a maximum sentence of a two-year supervision order - were inadequate to reflect the seriousness of the alleged crime.
"It could not be said that it would be sufficient ... to protect the community," the prosecutor said.
There was an ideological or political motivation for the teen's acts, the magistrate heard, although the details of the alleged motive were not discussed in open court.
The teen's lawyer argued the purported motive was still unclear as he opposed the prosecution's uplift application and flagged a potential mental impairment defence.
The lawyer argued the teen's mental health had deteriorated in the lead-up to the alleged offending, with reports he was hearing voices and had distanced himself from others.
A psychiatrist had raised a probable delusional disorder diagnosis and the teen already had autism spectrum disorder, anxiety and symptoms of post-traumatic stress disorder, he said.
"We do say this case presents an unusual combination of difficulties for a jury to decide this case impartially," the lawyer said.
The defence also rejected claims the teen started planning the alleged hijacking in October 2024, after prosecutors claimed the teen made multiple online searches for Syrian airports and the shooting down of military aircraft.
"It's plain through his internet history he had an interest in aviation," the lawyer said.
The defence lawyer argued the teen's case should remain in the children's court, where a magistrate could fairly and impartially decide on the facts.
Given the teen's mental conditions, the lawyer argued the children's court also had the scope to hand down an appropriate sentence.
But the prosecutor argued the case should be uplifted and decided by a jury, noting a judge could give directions to avoid any prejudice.
"Directions will not prevent a jury properly instructed from performing their task in an objective and unbiased manner," the prosecutor said.
The magistrate told the teen he would need some time to consider all of the material before making a decision.
The case is due to return to a children's court in June.
Lifeline 13 11 14
beyondblue 1300 22 4636
16°C