Debrief

Protectionsism’s ugly head

If a return to protectionism and government subsidies in Europe and the US becomes a fix to financial woes, we stand to lose. Australian companies exporting aircraft, vehicles and military hardware will be threatened, while offshore defence and airline procurements demanding local content as offsets will find the going tougher. But the grey area of codesharing may be wide open.

Codeshare deals have covered every imaginable formula, but could be threatened under ‘cooked’ protectionism rules. One Qantas/BA deal reportedly worked on a ‘first in, best dressed’ basis, and some aircraft ended up virtually full of the other airline’s passengers with the revenue split accordingly. More bizarre was a QF/JAL deal which saw the non-smoking half of the aircraft allocated to Qantas, with the other smoking half allocated to JAL. With most deals, one carrier buys a set block of seats (not necessarily half) on another’s aircraft. In all of the above each airline charged what they wished and on sold to retailers.