Pressure to let foreign airlines fly domestic

[Justin L]

This one will be interesting...

http://www.smh.com.au/news/news/let-...560645337.html

Pressure to let foreign airlines fly domestic
Mark Davis Political Correspondent
November 3, 2008

FOREIGN airlines would be allowed to fly domestic passengers between Australia's big capital cities to improve competition in the aviation industry under reforms being pushed by the Federal Government's Department of Foreign Affairs and Trade.

In a submission to a Government review of aviation policy, the department is arguing for a significant freeing up of the complex web of trade agreements and local regulations which limit competition on international and domestic air routes.

It wants the Government to negotiate deals with other countries by which their carriers would be allowed to carry domestic passengers inside Australia, in return for Qantas and other Australian carriers being given the same rights in other countries.

But the proposal is being strenuously resisted by Qantas and Virgin Blue, which have warned it would allow international airlines to "cherry pick" busy routes like Sydney to Melbourne and Sydney to Brisbane, undermining the viability of less profitable regional services.

The debate has been triggered by a Government policy review on everything from regulation of international air services to tackling shortages of skilled workers.

The Transport Minister, Anthony Albanese, is about to release an aviation green paper and wants a white paper by the middle of next year to set out a long-term policy framework for the future of the industry.

The DFAT submission to the review adopts an unusually strong pro-competition position on international and domestic passenger air services, a stance which is likely to be at odds with that of Mr Albanese's own department.

In the Canberra bureaucracy, DFAT is responsible for trade policy and for negotiating almost all of Australia's multilateral, regional and bilateral international trade agreements.

But Mr Albanese's department is in charge of the complex agreements with other countries that determine which airlines can fly to and from Australia, where Australian airlines can fly internationally, and how much competition is allowed on international and domestic routes.

DFAT's submission says removing restrictions on flights between countries provides benefits for consumers and industries which rely on the aviation sector by allowing competition among airlines on price, convenience, destinations and service quality.

It says that even though Australia had negotiated so-called "open skies" agreements with countries like the US, Britain and Singapore, these still contained restrictions on airline services.

The submission also calls for other reforms, including:

- Allowing more foreign airlines to operate on the Australia-US route which is currently effectively restricted to Qantas, Virgin's V Australia international carrier and United Airlines.

- Lifting the 49 per cent foreign ownership cap on Qantas.

-Allowing foreign-owned but Australian-based airlines to fly on international routes in competition with Qantas.

[Jon Harris]

UA does not have full traffic rights on the SYD-MEL tag - it can only carry pax that will continue their journey on UA's services to LAX and SFO however they can stop in SYD and it doesn't have to be an immediate connection. TG has the same set up for their SYD-BNE. MH has no traffic rights at all on the SYD-BNE.

QF's traffic rights on the LAX-JFK tag is the same as UA's on SYD-MEL.

For a while just after AN's collapse in 2001, UA had full traffic rights on the SYD-MEL - I remember their $50.00 fares in Y and $150 in C and $200 in F.

[Justin L]

Originally Posted by Jon Harris

UA does not have full traffic rights on the SYD-MEL tag - it can only carry pax that will continue their journey on UA's services to LAX and SFO however they can stop in SYD and it doesn't have to be an immediate connection. TG has the same set up for their SYD-BNE. MH has no traffic rights at all on the SYD-BNE.

QF's traffic rights on the LAX-JFK tag is the same as UA's on SYD-MEL.

For a while just after AN's collapse in 2001, UA had full traffic rights on the SYD-MEL - I remember their $50.00 fares in Y and $150 in C and $200 in F.

I believe PR also has similar rights to UA and TG for SYD-MEL vv.

[Jack B]

Have foreign airlines operated domestic flights out of Sydney before

if so, what ones?

[James R]

The BA9 and BA10 used to continue on to/from Melbourne.

I'd assume you could previously purchase domestic tickets on these sectors?

[Nigel C]

I think if you searched for which airlines operated here during the pilot strike days, you'd find a host of foreigners doing domestics.

Air Canada is one that I think was here...

[Andrew P]

CX also has limited rights ADL-MEL & CNS-BNE

Banjo

[NickN]

Sounds like allowing this to happen could open a real can of worms and set a dangerous precedent. If this ever happened there would be no going back.

[Andrew McLaughlin]

Originally Posted by NickN

Sounds like allowing this to happen could open a real can of worms and set a dangerous precedent. If this ever happened there would be no going back.

What's "dangerous" about it Nick?

[NickN]

Setting a precedent such as this is dangerous. If everything goes to the dogs and foreign carriers take over the domestic market you can't just turn around and tell them to go. Once they are in, they are in.

There has to be some sort of protection offered by this government for Australian business. Something the Rudd government has a lacklustre history in. The Australian marketplace is constantly under attack from overseas interests, in almost every sector. The last thing we should be supporting is yet another way for foreign companies to muscle in on Australia.

I find it very un-Australian to be supporting and assisting overseas business to profit from Australian customers when we could be promoting a home grown business instead. Personally I always prefer to choose a home grown business to deal with over one that is under foreign ownership to help support Australian business.