The Review Process Aviation Had To Have?

For now that’s an unrealistic expectation, but at least Minister Albanese’s announcement of a green paper/white paper policy development process that will result in a ‘National Aviation Policy Statement’ is a welcome development. In calling for industry submissions towards the process, the minister has released an issues paper which discusses many of the challenges facing aviation. It’s a good starting point as it’s welcome to see the government has identified several key challenges that industry has long voiced concerns over, particularly the decline in some sectors of general aviation, charging regimes at secondary airports, and what are appropriate security and safety measures for regional airline operations, to pick just a handful.

But it is easy to highlight the challenges and problems, much harder to identify effective solutions. So, without doing the government’s job for it, AA would advocate all interested industry bodies, organisations, companies and individuals to respond to the call for submissions to the review process.

This process should result in the first national aviation policy in living memory, so we should take full advantage of it. We want to avoid the computer software programmers’ warning of “garbage in, garbage out”, so industry should embrace the process.

The flipside of course is that it will be another 12 months before aviation policy guidelines are in place, and no doubt months, perhaps years, after that before policy changes are enacted.

At least this process promises that those challenges will be addressed. The new minister and government are to be praised for starting this process, but will be measured by the quality of the outcomes it produces.

Jetstar Pacific

For an airline that makes over a billion dollars a year, a $50 million investment for a minority stake in a small Vietnamese airline may not sound a big deal. But Qantas’s investment, through Jetstar, in Pacific Airlines might just herald a new chapter in the growth of the world’s longest continually operating airline.

In Jetstar, Qantas defied the sceptics in creating what has undeniably become the most successful low cost airline owned by a ‘legacy’ airline. Now Jetstar is taking part in what shapes to be a great race against AirAsia and Tiger Airways to establish itself as a leading low cost airline in Asia. No doubt Qantas executives would privately admit that the airline’s involvement in Singapore based Jetstar Asia has not been as successful as hoped, but higher expectations are held for its investment in tiny Pacific Airlines.

In the newly renamed Jetstar Pacific, Qantas/Jetstar gains a foothold in one of Asia’s most populous countries. Still a fully functioning communist country, the Socialist Republic of Vietnam is embracing capitalism and enjoys a rapidly growing economy and a booming tourism industry. It has great potential both for domestic and international airline travel. But beyond that, Jetstar is well placed to take advantage of any liberalisation of air travel within Asia – Vietnam is centrally positioned within Asia and enjoys low labour costs. So the growth potential for Jetstar Pacific (outlined in more detail from p28) could be enormous.

Beyond its Jetstar Pacific involvement, it will be interesting to see what further investments in Asia the Qantas Group makes. For now Qantas and Jetstar senior executives say there are no plans to invest in other Asian airlines – but it’s probably safe to assume that they are looking.

Jetstar will want to catch up to AirAsia and thwart Tiger and any other planned low cost Asian start-ups – something that a network of Jetstar branded carriers based not just in Singapore and Vietnam but perhaps one or two other Asian nations would allow.

Watch this space.