Qantas blasts open skies plan
Qantas has reacted angrily to a plan to let foreign airlines fly domestic routes in Australia's north, warning it would have "unprecedented and damaging" consequences for the aviation industry.
_The West Australian _revealed yesterday the Abbott Government is mulling an "open skies" policy for the Top End so foreign carriers can compete with local airlines to carry passengers and freight.
Cabinet's razor gang, the expenditure review committee, has discussed allowing international carriers to fly to airports north of the Tropic of Capricorn and then freely between northern airports.
The move would potentially allow cut-price foreign carriers to fly tourists to Broome, Darwin, Cairns and Townsville and give Australians cheaper tropical holidays.
But the idea would also have a strong attraction for mining and agriculture companies who want to shift produce and workers into Asia more cheaply.
Karratha, the centre of iron ore and LNG activity, could benefit if northern Australian skies were open with foreign workers flown directly to the Pilbara rather than via Perth or Eastern States hubs.
It is understood Trade Minister Andrew Robb and Treasurer Joe Hockey backed the idea inside ERC.
Transport Minister Warren Truss is more sceptical.
Qantas, which stands to lose most from any increase in competition, warned foreign airlines could then operate as "de facto domestic airlines". A spokesman said this would have far-reaching, unprecedented and damaging consequences for Australian aviation.
"It would change the economics of already commercially marginal routes in some parts of northern Australia, which a number of regional carriers have been serving for decades," he said.
Virgin Australia said it had made "significant investments" in routes through northern Australia.
Prime Minister Tony Abbott is described as a "fence sitter" on the issue within Cabinet and ERC.
Shadow transport minister Anthony Albanese questioned the need for any new aviation rules for northern Australia.
He said reforms from the 2009 Aviation White Paper meant there were already incentives to fly into northern airports such as Darwin, Broome, Cairns and Townsville.
"Australia has the most open domestic aviation system in the world and any changes would need to be examined carefully as they may endanger the existing provision of air services," Mr Albanese said.
A major Government report into northern Australia development last year recommended opening air routes to international carriers.
The Northern Australia Green Paper found there was limited interstate transport across the north and it was virtually impossible to fly within the region without going to a major airport in the south.
The paper said restrictions meant foreign carriers had to carry extra emergency fuel, reducing the freight they could haul.
Northern Territory Chief Minister Adam Giles is said to be keen on allowing foreign carriers.
