Subjects: Foreign airlines in Australia; northern Australia aviation proposal
ALAN JONES: A major battle is looming between the Federal Government and Australian airlines. In what I regard as an almost unbelievable plan which surely the Federal Government won’t implement, based on ideological theory, not commercial practice, there’s talk that foreign airlines will be allowed to fly domestic routes in northern Australia.
That is, foreign airlines would be able to compete against Australian airlines like Virgin and Qantas to carry passengers and freight between airports in northern Australia. Now above the Tropic of Capricorn initially, which would include Cairns, Townsville, Broome and Port Headland but of course once this open door policy takes root it’ll finish up anywhere. It’s like the free trade agreement. No way in the world this would be allowed in America.
Can you imagine a Qantas plan landing in Los Angeles, deplaning, god I hate that word, but it means dumping passengers, dumping 250 passengers, in Los Angeles, that was as far as they were going, say there was 250 empty seats. But the Qantas plane is en route to New York so it picks up 250 American passengers who want to travel LA to New York. It would never be contemplated.
Well the Virgin boss John Borghetti warned that they would have to reconsider flying routes in Australia if this plan was put in place. I mean the areas we’re talking about there’s a lot of leisure travel. Cairns, Townsville, Darwin, Broome, Port Headland, they’re holiday destinations as well as commercial destinations, but as John Borghetti the Virgin boss said, and he’s very able, the price-conscious leisure market is very soft. So it’s variable is what he’s saying. It’s not guaranteed.
He said opening the door to foreign airlines would put pressure on existing players, that’s Qantas and Virgin, who have invested tens of millions of dollars in flying to these destinations. And they’re Australian.
This is the petrol argument, isn’t it. Allow Coles and Woolworths to take charge of petrol supplies and when they get total control, then there will be a whole range of areas that they won’t service for commercial reasons.
That’s what John Borghetti is saying when he expressed a doubt that foreign airlines would retain services on some of these routes in northern Australia but they will have already forced Virgin and Qantas out of the market. Many of these routes are loss making.
The former Qantas boss Geoff Dixon, who knows more about this than most people in Canberra, said the proposal was quote ‘a step too far even for northern Australia’. And a form of dumping that would seriously undermine local airlines. Now dumping basically means that you’re allowing product into Australia below the cost of production.
So what would happen here of course is they’d dump a few passengers at Townsville and say well, if you’re going to Cairns, thirty bucks will do. Well of course everyone will climb on for thirty bucks, and Virgin and Qantas will be left whistling.
Well somehow or other the Trade Minister Andrew Robb and the Treasurer Joe Hockey are quoted as saying ‘this will help boost economic development’. Cabinet is apparently going to consider the plan – forget it. Put it in the bin.
The Australian and International Pilots Association said the proposal threatens the local aviation industry and jobs. Virgin for example began services about a month ago, between Darwin and Alice Springs. Now given that we’re talking about international aircraft being given access to these markets, as John Borghetti said, do you think 777s or 747s or A380s are going to be flying to Broome and Townsville or these secondary ports?
He said, if all of a sudden the plane fill changes, you’d have to reconsider those positions, because you can’t sustain them. So these outfits will finish up having no services. How dumb’s that? One further concern has been raised by the Virgin Independent Pilots Association about whether the government would be able to make overseas airlines adhere to the same strict safety and licensing requirements as local airlines.
So if you open up domestic routes to overseas carriers, are they going to be able to ensure the safety of the Australian travelling public? Then of course the wages and working conditions of local pilots and cabin crew could be undermined by overseas carriers, sourcing a cheaper labour force and thousands of Australian jobs – I can’t believe we’re talking about this. There’s so much going on in Canberra I can’t believe the Government would waste their time even talking about this nonsense let alone planning to do something about it.
The Shadow Federal Transport Minister and the former Deputy Prime Minister and former Infrastructure Minister in the Labor Government Anthony Albanese, has called all this unilateral economic disarmament. Well in my opinion, he’s not far off the mark. Anthony Albanese, good morning.
ANTHONY ALBANESE: Good to be with you Alan.
JONES: Thank you for your time. I mean it’s axiomatic isn’t it that this will undermine local wages, threaten Australian airlines, potentially jeopardise safety, I mean, what are we on about?
ALBANESE: Well, this is a mad proposal. What happens throughout the world is that aviation is regulated by agreements between nations, ie, Australia says we’ll allow Singapore Airlines or Etihad or some other airline to fly to Australia and we will get reciprocal rights in return. This however, is unilateral economic disarmament.
There isn’t a single country in the world that allows foreign airlines to fly on its domestic routes. It is against the national interest, it’s against our economic interest.
In terms of Virgin and Qantas, they’ve made investment decisions. When you buy a plane, it’s not for a month or a year. It’s for a decade or more. They’ve made those investments. They’ve invested in the terminals. They’ve invested in their gates and their lounges and all the things that make up aviation.
And the government is saying ‘we’ll just change the rules on you’. They’ll allow foreign airlines and it would only be budget airlines, and they would only fly routes that were profitable in the short term. You would then have the potential of no one flying to some of the smaller routes like Cloncurry and Rockhampton. These are not places where you make a lot of money but our Australian airlines do fly there.
We have the best, most open domestic aviation system in the world that allows for foreign investment to come in. If you want to see the head of Rex Airlines you’ve got to fly to Singapore, because they’re owned and operated from Singapore. We have a very open system. But what we don’t do is say, we’ll have a free-for-all. Who’s going to fly to Darwin in the wet season? In the dry season you can make money. But in the wet season you don’t.
JONES: So they’ll get no services, I mean, I can’t believe we’re talking about this. Can you imagine America, as I said before, allowing Qantas or Virgin to top up their planes in Los Angeles on the way to New York?
ALBANESE: They’d be laughing at us, Alan. It is the logic that this Government has put towards shipping where they want to open up the coast, no preference at all for Australian ships. I mean, around the world when it comes to transport, nation states understand that it’s an important part of their national security, protecting their environment, protecting their national economic interests.
So in the US, if you want to operate in terms of domestic aviation, they don’t allow foreign investment in their domestic carriers. They’re all very much cross subsidised and protected. When it comes to a ship in America –
JONES: Well you’ve got some control over it Anthony, haven’t you, I mean when you say protected everyone’s says, oh, there he goes again. But you’re protecting it because we’re dealing with people’s safety here. And we can control those aspects of it. We’ve got no control over that in relation to international carriers.
ALBANESE: Oh, absolutely. And issues like training; there is a real national security issue when it comes to our transport sector, as well as a national economic interest. Everyone knows, what’s the problem they’re trying to solve here?
JONES: That’s a good question.
ALBANESE: Aviation is five times more affordable than it was 20 years ago. Five times more affordable. My son goes to the local high school. His friends have all been on planes and it has transformed the way that Australia functions.
JONES: It’s the thin edge of the wedge, isn’t it here? They say, oh, no, no, no, it’s only north of the Tropic of Capricorn. It’s only Cairns, Townsville, Darwin, Broome, Port Headland – hello! In the longer term this open door policy would then be applying to routes elsewhere in Australia and goodbye Qantas and goodbye Virgin!
ALBANESE: Of course. Step one would be to bring them in. Step two is for them to say, well we’re flying between Cairns and Darwin but in order to keep that route and to make it profitable we really need to also go down to Adelaide. And then the next step would be unless it goes through Sydney, it doesn’t work. That is precisely what would happen here.
JONES: And then they’d cherry pick. They’d cherry pick the routes. So then they’d say oh, well it’s not profitable, we’ll close it. So Qantas and Virgin are gone, so here are these people with no airline service.
ALBANESE: Absolutely and there’d be absolutely nothing to your Tamworths and to your Bundabergs, and to the Cloncurrys, to these smaller routes. Aviation is so vital for an island continent such as ours with such vast distances and relatively small populations. And Qantas and Virgin have both done a fantastic job of servicing the need in Australia. Smaller airlines as well, like Air North, would simply go out of business.
JONES: And you’ve made a very valid point there, because after the war they used to joke about John McEwen because they’d say, oh, I can feel an election coming on, he would be promising an airstrip at Moree or Quirindi or Cloncurry or whatever because aviation was the civilising factor then, the roads were bad, and it was the way of getting the pregnant mother from the outback Australia to the capital cities. Now, that’s still the truth today and if we have those closed down, these people are second class citizens.
ALBANESE: It is absolutely. When I was the Minister one of the great pleasures, and a privilege I had was going to places like Karumba, in the Gulf country, opening up a renovated strip that improves safety and improved access for those communities.
If you have a health crisis there’s no hospital in many of these communities. You need an airstrip. You need aviation. That’s why we have and the present Government’s continued a remote aviation service program.
Now if you don’t have a commercial basis for aviation in the north of Australia, then those smaller operators that fly between the islands like Bathurst and Melville, those indigenous communities in the Tiwis rely upon aviation. They’re the link between those smaller operators and the major players.
JONES: Exactly. And this is where ideological theory is miles removed from reality, isn’t it? I see the TWU has said ‘it’s declaring war on the Australian aviation industry’. Now it might sound exaggerated, but it’s not far from the truth.
ALBANESE: Well, it’s absurd. And that’s why I’ve said it’s unilateral economic disarmament because no other country in the world does it. And they’re trying to do it with shipping, now they’ve extended the logic to aviation. And it makes no sense. Just have a look at what our partners do. Our competitors, they certainly don’t do this.
JONES: But you’ve seen all of this, I mean when you were the Minister, I mean the argument is, oh, and people swallow this argument, sounds good doesn’t it, it’ll open up northern Australia to more tourism opportunities. How on earth can you open up northern Australia to more tourism opportunities? How on earth can you open up northern Australia to more tourism opportunities beyond what Qantas and Virgin are already doing?
ALBANESE: Well that’s exactly right. If you want to bring in international aviation, Darwin’s an international airport. Cairns is an international airport. They fly to Asian destinations in our region. That’s a great thing. We have that access now and in terms of budget airlines like Jetstar. Virgin have taken over Tiger.
We now have quite a good structure for a country of our size. Two major airlines offering full service with each of them having a Jetstar and a Tiger respectively to offer those budget services –
JONES: – correct. Put it within the pocket of everybody to be able to fly.
ALBANESE: Absolutely. As well as airlines like Air North.
JONES: But this is virtually allowing a foreign airline to operate as a de facto domestic airline. It wouldn’t happen anywhere else in the world.
ALBANESE: Absolutely. People will, if you said this at an international aviation conference they would laugh at you. They would say, what are you talking about? You would actually have to explain that this was a proposition. Because it’s completely against every single way that aviation operates in every country in the world.
JONES: Yeah, as if these foreign airlines are going to fly to destinations with low populations. Suddenly thousands of people will be wanting to fly to these destinations according to the proposal here, it’s absolute rubbish. I mean I see one aviation executive, Anthony saying it won’t kill the local industry overnight, but sure as hell it will kill it over time.
ALBANESE: Of course it will. And someone needs to tell Andrew Robb and Joe Hockey and all these people to go to Broome or some of these places in the off season. No one goes there.
JONES: We’ve got to go to the news, Anthony, good to talk to you. I’ll be talking to those people and I’m sure you will as well. Thank you for your time.
ALBANESE: Good to talk to you Alan.
JONES: There we are, talking to Anthony Albanese. I mean, it’s just ridiculous isn’t it? But it’s a very, very big issue. I don’t know where these ideas come from other than ideological theory.