Fresh call for Qantas to share lucrative LA route

A Sydney Morning Herald report says that stranglehold of Qantas on the Australia-US route faces a fresh challenge after the Victorian Government called on its federal counterpart to grant Singapore Airlines and other “third country” airlines access on the lucrative route.

Despite the signing of an open skies treaty between Australia and the US early this year, which has paved the way for Virgin Blue offshoot V Australia’s entry on the route this December, the Victorian Government has argued not enough has been done to open up what is considered one of the world’s least competitive long-haul air routes.

In its submission to the National Aviation Policy white paper of the Transport Minister, Anthony Albanese, the Victorian Government said: “Despite the recent open skies agreement concluded between the Australian and US governments, the establishment of new services to Australia are not a high commercial priority for most United States airlines, which are largely focused on other regions (such as North Asia and the Atlantic).”

The State Government said the new agreement had not yet resulted in any new flights coming into Melbourne, noting V Australia had so far only committed itself to the Brisbane-LA and Sydney-LA routes. It said the extra services would only “further increase the diversion of traffic through Sydney”, where 37 per cent of Victorian passengers had to travel through to fly to the US.

“The Victorian Government believes it would now be appropriate for the Commonwealth Government to set a timetable to allow Singapore Airlines (or other third country carriers) entry to the Pacific route,” the submission said.

Singapore Airlines and Air Canada had their requests to fly the route rejected in February last year, when the then transport minister, Warren Truss, ruled it was better to provide V Australia time to establish itself. Qantas controls about 75 per cent of the capacity on the route; United Airlines the rest.

“There is a concern that the previous government’s air services policy may have over-emphasised strategic negotiating priorities and national carrier interests to the detriment of whole-of-economy benefits,” the submission said.

The Victorian Government has long pushed for Australia to open up itself more to foreign carriers, especially with the exit of several airlines from Melbourne such as British Airways and, more recently, Japan Airlines.

Victoria’s Labor Government was one of the protagonists of the successful push last year for the Howard government to grant Emirates, Qatar Airways and Etihad more access.

Qantas, however, has long contended any aviation agreements should factor in the unfair competitive disadvantage it has compared to “hub” carriers such as Singapore Air and Emirates.

Singapore Airlines declined to comment on the submission. But it is clear the carrier is prepared to take a more measured approach in persuading the Rudd Government to eventually allow it onto the LA route.

“We understand the new government has numerous priorities,” it said in its submission to the aviation white paper.”

A report by The Mole from the Sydney Morning Herald