Airline economics 100

The ambitious new airline was allocated arguable the worst airport gates, in the least attractive sections of domestic terminals across the country. The Keating Government saw that Compass would operate from the international terminal at Perth airport, thereby inconveniencing the bulk of its passengers.

Due to constant problems, the government's airline safety watchdog, the Civil Aviation Authority effectively forced the airline to cease trading on the 20^th of December 1991; just days before the revenue rich Christmas holiday season. In the process, the government delivered a great deal of pre-Christmas cheer at Coward Street Mascot.

You could be forgiven for thinking Keating worked for Qantas as his behaviour was not in the interest of the Australian flying public. (As an aside it is worth noting that the National Leader for a period in John Howard's government, John Anderson, was too so one eyed one could be forgiven for thinking he was the Member for Qantas, and not for Gwydir, NSW).

Unable to stay airborne given many government made hurdles, Compass I and later Compass II were soon enough dead and buried, leaving Ansett and Australian as the sole remaining players. In effect, the industry was flying back in time.

The Two Airline policy was in force once again.

In 1992, for reasons best known to themselves, the economic vandals in the Keating government decided to fold 100 percent of TAA now rebranded Australian Airlines into Qantas. Thereby granting Australia's international carrier a domestic pawprint overnight and allowing it to leverage its huge bulk against the far smaller Ansett. A true David versus Goliath struggle. Qantas outspent and out-marketed Ansett on both domestic and international routes, using every tool a dominant player can muster. I clearly recall flying to Shanghai on one of Ansett's few long haul jets, just before the airline closed down. The flight was memorable for the exceptional service and sadly the very few passengers.

Then Treasurer Keating proceeded to offload 25 percent of Qantas to British Airways before selling the balance of Qantas to the public. By the spring of 1993, Qantas and Australian were operationally merged into the near monopolistic colossus it remains today.

Ansett's collapse soon after 9/11 only suspended the Two Airlines Policy for a short time, until Sir Richard Branson's Virgin Blue shocked Qantas from its joyful monopolistic position by fast tracking its operations, which began a year earlier in 2000.

Why Keating didn't put the public interest first by selling Australian Airlines to a well-managed and robust foreign carrier like Singapore Airlines and then allowing both Qantas to enter the domestic market and granting Ansett international rights, in order to maximise competitive aviation tension both within and without Australia is just one more of Paul Keating's long list of unexplained misdeeds.

The longer Tiger sits grounded, the higher the stock prices of Qantas and Virgin Australia will soar, in the knowledge that domestic fares will rise in proportion to the erasing of competition.

Let there be no mistake: the incapacity or the death of Tiger means a boon to Virgin Australia and Qantas (as well as its subsidiary Jetstar) and a king hit to travellers who should expect airfares to rise and load factors to improve (for you and me that means a more crowded jet).

What we really need is a commitment for someone in the Labor/Green Coalition to come out and defend the interests of consumers by encouraging competition in air services. Maybe Sen. Brown is up to the task; given Labor's Chris Bowen's history in defending consumer rights is a disappointment to say the least.