Federal Government says it is considering allowing more carriers to fly across the Pacific.
A Sydney Morning Herald report by Matt O’Sullivan says that the desire Singapore Airlines to challenge Qantas’s stranglehold on the lucrative Australia-US route has received an unexpected fillip, the Federal Government revealing that it will consider allowing more carriers to fly across the Pacific.
The federal Transport Minister, Anthony Albanese, said during a visit to Singapore yesterday that the Government might consider opening up the route to other carriers once Virgin Blue’s long-haul carrier, V Australia, began services between Sydney and Los Angeles in February.
“Our position is to get the second carrier that will provide competition to Qantas directly on that route, and once that occurs, further liberalisation can be considered,” Mr Albanese told Bloomberg.
It is a departure from Mr Albanese’s stance early this year when he signed an open-skies treaty between Australia and the US, opening the way for V Australia’s entry on the route. Then, he said he had “no intention” of allowing Singapore Airlines and Air Canada on the route.
The two carriers had their requests to fly the route rejected in February last year, when the then transport minister, Warren Truss, ruled it was better to give V Australia time to establish itself. Qantas controls about 75 per cent of capacity on the route and United Airlines the rest.
The Victorian Government has also called on Canberra to grant Singapore Airlines and other airlines access.
Singapore Airlines welcomed Mr Albanese’s comments, saying “liberalisation of routes like the trans-Pacific maximise trade and tourism opportunities”.
It comes as the release of figures from the Airports Council International highlight the slowdown in travel.
Traffic at airports around the world fell 2 per cent in the third quarter, the first quarterly contraction since 2003. Traffic in the Asia-Pacific – the largest international passenger market – slumped 6 per cent last month, compared with the same month last year.
Consolidation in the industry has also gained pace with the Delta Air Lines-Northwest merger passing its final regulatory hurdle. The merger will create the world’s largest airline, a title presently held by American Airlines.
Delta said the new airline would have $US35 billion ($51 billion) in annual sales and 75,000 employees, and deliver $US2 billion in new revenue and cost savings.
Delta agreed to buy Northwest more than six months ago in an all-stock deal, and shareholders endorsed the plan last month.
In Europe, Germany’s flagship carrier Lufthansa is buying a controlling stake in Britain’s BMI – formerly British Midland – for €400 million ($768 million).
A Report by The Mole
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