Reece

The Report says it perfectly – “Results of the Review’s survey of trunk passengers suggest that there is widespread dissatisfaction with the TAP; in particular, this dissatisfaction involves perceptions of restricted competition, high fare levels, and parallel services. ” The Report also made fitting testimony to the ideology of submissions received – “Of those submissions to the Review that offered comments about the TAP as a whole, the overwhelming majority were critical of the present regulatory arrangements. In general, supporting comment was only to be found in the submissions of Arisett Airlines, Australian Airlines, and certain unions. ” Need we say more!

What the Report recommends are five courses of action.

These range from virtually leaving things as they are; the Status Quo, opting for Revised Regulation, Modified Regulation, Partial Deregulation or going all out for full Deregulation. At the Canberra press conference launching the release of the Report it was interesting to hear both Aviation Minister, Mr Peter Morris, and Mr Tom May acknowledge that the first and last options were considered unlikely to be acceptable.

What occurs now is that the airlines, and a myriad group of other vested interests, will present their responses to the Government by the end of March so that Peter Morris can hopefully hand down his definitive TAP replacement in Parliament by early June. By mutual agreement with the airlines, this new aviation policy will then become effective January 27th, 1990 though many of its more subtle suggestions will no doubt be introduced sooner.

Apart from option one, all the options allow for an enhanced level of competition with airlines offering a greater range of discount fares. There is scope for embattled East-West Airlines (the popular ‘hero’ of the Report) to finally spread its wings, for Qantas to regain its interline rights and for both majors to be able to move away from the insanity of capacity controls on individual routes. From talking with those in the industry it would appear that the eventual TAP replacement will most probably be. Something akin to a mixture of the third and fourth options.

The feedback from the major players, the airlines themselves, was to say the least mixed. Ansett, the long time stalwart of the TAP and all it stood for, surprised everybody a week after the Report was issued by announcing that it wanted either things left exactly as they were or otherwise demanded nothing short of full-blooded deregulation.

While this was initially stunning to most observers it does reek with logic. Ansett is happy with the TAP and at the same time if deregulation ever were introduced then its already massive airline network, supported by a large surface transport and accommodation/tourism sector backed up by its aircraft leasing divisions would allow it to steamroll its competitors with relative ease. Ansett’s concern though is that it quite rightly should not be expected to have to compete with a government-owned carrier in a deregulated environment. In this context, it is unlikely that the ALP are likely to be interested in parting with ‘their’ airline though this is, of course, stated Coalition policy. And with the Coalition likely to be in power this time next year, then who knows what the long-term future holds for Australia. Therefore, Ansett’s call for total deregulation, with the proviso that Australians firstly be sold, rings a little hollow when it is realised that its final submission must be with Peter Morris no later than March 31 . :. . . a light year away from the real-life possibility of a privatized Australian Airlines! It is also interesting to note that Ansett has at last bit the discount fare bullet and has launched into a massive advertising campaign promoting some 37,000 discount seats that are now available each week. If nothing else happens at least the May Enquiry has stimulated some new found, if somewhat enforced, enthusiasm from the majors for discount travel!

Australian Airlines is opting for. a mix of the softer options to enable it to compete against Ansett more effectively and to be able to take on an expansive East-West. Australia would also like greater access to the intrastate networks, particularly NSW, and would perhaps see an expanded role for Air Queensland.

East West, of course, are the biggest winner irrespective of which option is chosen. After all, they have literally nothing to lose and a lot to gain by any change in the existing legislation. There is the very real possibility though that if options four or five were accepted EWA would have to grow very fast or risk being literally consumed by either a privatized Australian or an already expanding Ansett.

The May Enquiry was a long time in coming, and indeed it may be optimistic to expect Peter Morris to be able to meet his midyear deadline as there is just so much in the Report to digest. Whatever happens though, whichever option is finally chosen, the Australian airline environment will be changed forever – and most definitely for the better.