An Australian Senate committee has suggested that a trial of allowing foreign carriers to fly on limited domestic routes from Darwin could occur, but stopped short of formally recommending it to government.
The final report by a Senate Standing Committee on rural air services explored cabotage - where a foreign carrier would be allowed to transport passengers solely on a domestic flight - in a chapter on competition on regional air services.
Several tourism bodies and local councils in northern Australia made submissions in favour of allowing cabotage between some cities in the region, such as Darwin and Broome, as a way of encouraging more international airlines to serve them.
Virgin Australia, Qantas and trade body Airlines for Australia and New Zealand made submissions against the suggestion, noting that it would undermine the economics of some of its services to northern Australia.
In its recommendations, the Committee stated that it does not support cabotage for passenger services in Australia, but notes that there is still merit in some of the arguments put forward by those seeking it.
"Should the government have any appetite to do so, the committee suggests that an appropriate route would have to be selected to trial the easing of cabotage restrictions, where suitable infrastructure already exists and where government underwriting of costs would not be required," it states.
"The proximity of Darwin to Asian markets and the fact that Darwin airport already receives international arrivals may make this location suitable for cabotage trials."
It is the second time that the issue of cabotage has been raised. In 2015, a competition policy review recommended that foreign carriers be allowed traffic rights to carry air cargo within Australia, and passengers in "specific geographic areas" where it may provide a net benefit.
At that time, Qantas and Virgin Australia strongly opposed the suggestion, and the government responded that it had "no immediate plans" to grant foreign carriers cabotage rights.