Air N.Z. shut out of Aust, routes

Press, 8 October 1987, Page 3

Air N.Z. shut out of Aust, routes

ROBERT LOWE

Of NZPA

Sydney The Australian Government yesterday moved to deregulate the aviation industry, but blocked Air New Zealand’s bid to fly on domestic routes. It also restricted Air New Zealand to holding less than 15 per cent equity in any Australian carrier. The Government’s new policy, announced in Canberra by the Minister of Transport and Communications, Senator Gareth Evans, will see the end of the 35-year-old two-airline agreement in 1990. The agreement has given Ansett and the State-owned Australian Airlines a privileged position on the domestic market

Controls on airfares, routes, importing of aircraft and flight capacity will also be removed, and new entrants will be assured access to terminals. To affow Australian Airlines;■<- better chance of competing, it will become a public company with a corporate structure and

day-to-day control over its own activities. The Government’s new policy was aimed at producing benefits to consumers by promoting increased competition and greater economic ‘ efficiency, while maintaining Australia’s aviation safety record, Mr Evans said. However, the “open skies” policy will not extend to foreign airlines. International airlines, Qantas included, would hot be allowed to carry domestic passengers or freight on regular services within Australia, Mr Evans said. Qantas would, remain Australia’s sole designated international carrier, he said. As an interim measure to encourage competition before the deregulation came into effect, Qantas* “interlining rights” would be. restored from July 1, 1988. c This would allow the airline to carry passengers on domestic routes if they had international tickets. In a statement tabled in Parliament, J Senator;

Evans said arguments had been put that there should be an open skies policy, at least between Australia and New Zealand, as an extension of the Closer Economic Relations agreement However, this would place the international airlines of both countries in direct competition with the domestic carriers, leading to pressure from the domestic carriers to be granted full international rights, he said. “The Australian international market- is not large enough, and already has competitive pressures such that multiple designation of Australian international carriers is not warranted. “The New Zealand international market is even smaller' than Australia’s and is similarly served by a number of international carriers.” . It was difficult to see any rational, solution short of the possible designation of a single international carrier to service both Australia and New Zealand’s international markets, Mr Evans said.