THE PRESS FRIDAY, OCTOBER 9, 1987. Protecting Australian skies

Press, 9 October 1987, Page 12

THE PRESS FRIDAY, OCTOBER 9, 1987. Protecting Australian skies

The Australian Government's decision against opening its domestic air routes to foreign competition comes as no surprise. Any Government which denies its own national airline — in this instance, Qantas — unfettered access to the internal market can hardly be expected to throw open the door to international airlines of other countries. The policy announced in Canberra this week has effectively ended Air New Zealand's chances of flying domestically in Australia, something the airline sees as the quid pro quo for Ansett’s entry to domestic routes in New Zealand. Air New Zealand has been pressing strongly for the right to fly in competition with Ansett and Australian Airlines in Australia ever since the New Zealand Government changed its policy last year to allow up to 50 per cent investment here by foreign airlines. Air New Zealand’s argument, in response to the Ansett invasion, may seem on the surface to have an air of getting a fair go. Below the surface, the argument is more complicated and the consequences of getting Air New Zealand accepted as an Australian domestic carrier would certainly lead to problems for both Air New Zealand and Qantas on at least the Tasman run. Under Canberra’s existing two-airline policy, domestic competition on Australia’s main trunk routes is restricted to Ansett and Australian Airlines (formerly T.A.A.). This will change in 1990 when all internal routes will be opened up to any Australian-owned carrier. International airlines will be restricted to no more than a 15 per cent investment in Australian airline companies. This barrier is clearly erected to prevent domination by the big United States airlines

such as United and Continental. Air New Zealand could, like others, including Qantas, take a 15 per cent interest in an Australian airline, but no more. Even Qantas’s ability to carry passengers on the domestic sectors it flies will continue to be severely restricted. At present, Qantas is permitted to carry internally only those passengers it brings into or takes out of Australia. The airline, which claims to have 10,000 empty seats a month on the domestic sectors linking the 10 international gateways it serves, has argued long and vigorously for domestic rights so that these seats can be filled. It has not succeeded. The new policy offers only a crumb: permission to carry within Australia those passengers who have international tickets that include an Australian sector in their travel. In setting the new policy, Australia’s Minister of Transport, Senator Gareth Evans, has ruled out any extension of C.E.R. to allow open skies between /Australia and New Zealand. As he observes, this extension would enable the existing Australian domestic airlines (and those in New Zealand) to fly across the Tasman. Such a daunting prospect for both Air New Zealand and Qantas, not to mention other international airlines that have trans-Tasman rights, ensures powerful opposition to an open-skies policy between the two countries. Senator Evans has respected this. When the price of Air New Zealand’s entry to the Australian scene would be, first, the logical extension of the same right to Qantas and, second, the inevitable claim by domestic airlines to trans-Tasman traffic, the Air New Zealand hopes must look very thin.