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Aviation History
1986
1986 - 0068.PDF
against GE and P&W to ensure that P&W never gets another Qantas order, and that GE does not get into future 747s. This is a blood-on-the-floor battle, with a lot at stake. The immediate question is whether Qantas will order the 747-400 or stay with the 747-300 it already operates. The pres sure comes from Qantas' old enemy, Sing apore Airlines, which seems certain to choose the -400. To sell the -400 to Qantas, Boeing must guarantee all-year all-weather capability for nonstop operations Singapore-London and return, as well as Los Angeles- Sydney. It must also meet the definitive Qantas policy of a three-man flight deck. Qantas will not consider the incompat ibility arising from two different flight- decks on the same route because there would be slipping problems. It is very unlikely now that Qantas will take any decision for or against the -400 before late 1986. Meanwhile, the entire international traffic situation in Australia is good. In 1983/4 the total passenger airlift by all airlines serving the country rose by 4-6 per cent. In 1984/5 the rise was 10 • 6 per cent. The domestic airlines have not done quite as well, the figures for the past three financial years being minus 8 • 2 per cent for 1982/3, plus 3 • 8 per cent in 1983/4 and 7-5 per cent in 1984/5. TAA and Ansett combined reported lower growth than the industry average in 1984/5—6 • 1 per cent —while the "other" airlines reported 18-2 per cent. The average passenger load- factor for the entire airline industry was a very cheery 74 per cent, the best since 1980/81. The entire atmosphere in which the international (Qantas) and domestic segments of the Australian regular air transport industry work is entirely differ ent. The Qantas monopoly needs only continued Government silence on the subject. Qantas wields such influence at Canberra that it has always succeeded in keeping such able would-be competitors as Swissair, SAS, Finnair, Aeroflot, and Korean out of the country on the premise that it does not want to operate into their countries. The 28 airlines flying into Australia (plus Flying Tiger for all-cargo) are enough. The two major domestic operators work in a controlled climate which is regarded by many here as a duopoly/monopoly that merely keeps fares up. In a sense this is right. The Two-Airline Policy ensures that there is stability in the industry through highly controlled competition. The Liberal and National Parties which currently form the parliamentary opposition have not clarified their ulti mate election policies for 1988, but they are under strong pressure within them selves to privatise TAA. The Labour Party (currently in power) is dedicated to preser vation of the status quo. The best that Labour would allow is a Third Airline, for it is already on record that it would never agree to all-out deregulation. The Independent Review of Economic Regulation of Domestic Aviation is never theless investigating the industry, without any Labour controls, and could well come up with a compromise between the various attitudes. The Government of the day cannot break the Two-Airline Agreement with Ansett and TAA overnight. It must give three years' notice. And the May Commit tee, as it is known for its chairman Tom May, who has a capitalist background, does not need to submit its findings before mid-1986. The Government would be will ing to wait even longer. The three airlines concerned today with the policy—Ansett, TAA and the would- be Third Airline, East-West—are united in their hatred of any degree of deregu lation, except that East-West wants that little relaxation. The proponents of deregulation in some form include the Commonwealth TAA is the state-owned half of the two-airline policy 62 Treasury, whose recent statement on the subject called for boots-and-all deregu lation; the opposition parties to some degree (they are united even within them selves); the travel industry, which in particular wants cheap domestic travel for foreign tourists; and finally, without doubt, the mass of public opinion which has only one idea about the Policy: it believes it is to blame for "high" fares. The airlines argue that stability, safety (Flight International last year described Australia as the safest country in which to fly), and quality of service have been maintained within the industry with sufficient competition to keep fares reasonable. Any comparison of Australian domestic tariffs with overseas fares is of limited relevance, just as the direct comparison of US deregulation with what is achievable within Europe has limited relevance. The continent has 15 million citizens scattered around three million square miles. It would be impossible to design a country in which the location of cities and towns was more hostile to the operation of a profit able airline system. The only big city pair is Melbourne-Sydney, where six or more million people are clustered in the south east of the country. Since 40 per cent of all Australian passengers fly between those two cities, anybody could organise half-a-dozen 150-200 seat aircraft for a low-fare service between them and make a fortune. The Governments of the day have always insisted that any change in the system should not lead to that end. The late, astute Sir Reginald Ansett summed up the whole situation when he said that he would be compelled, even tually, to buy out any Third Airline that was started. It is always in the industry's collective mind, and widely held outside the industry, that Australian deregulation would eventually lead to a capitalist monopoly by one major airline, plus a batch of little guys. The policy was evolved in the late 1950s specifically to prevent FLIGHT INTERNATIONAL, 4 January 1986
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