State needs air lift

An article in The Herald Sun says that opening the nation’s skies to foreign airlines would create as many as 2300 jobs and inject $900 million into the state’s economy, a study has found.

Industry and Trade Minister Theo Theophanous said Victoria was being held back by archaic federal aviation policy that was restricting trade and tourism.

He said an Access Economics report commissioned by the Brumby Government highlighted the urgent need for reform.

His comments come amid concern Melbourne is increasingly being left behind by Sydney as a destination for air travellers.

Mr Theophanous said the Access report found that capacity restraints caused by a lack of foreign access were hurting the nation.

“International aviation access has a major impact on trade, investment and tourism growth, with around 70 per cent of all international arrivals to Australia using foreign airlines,” he said.

“However, the former Commonwealth government’s aviation policy settings currently restrict the air access of foreign carriers to Australia on several key routes to the four major gateways of Melbourne, Sydney, Brisbane and Perth.”

The report suggests that overhauling aviation policy would add up to $2.7 billion to the national economy, creating 8600 jobs.

Mr Theophanous warned that if the Rudd Government failed to act, the nation would pay a high price.

“This includes reducing trade, investment and tourism, driving up international airfares and reducing the availability and convenience of flights for Australians,” he said.

The existing policy was based on a 10-year-old inquiry and the Howard government’s last review in 2005-06 had failed to consult with key stakeholders, including airports and state governments.

“The Brumby Government strongly urges the Commonwealth to closely consider reforming existing aviation policy to ensure carrier capacity is provided ahead of expected demand in the long term.”

The fate of aviation is crucial to the Victorian economy with international visitor numbers to Victoria growing at an annual average rate of 3.6 per cent a year since 1999.

Last year 1.5 million international visitors came to Victoria but the state is missing out compared with NSW.

While Melbourne experienced an overall increase of just over 5000 seats a week, the Sydney increase was 30,000 since 2003.

Qantas chief Geoff Dixon has also flagged the possibility of a rise in airfares because of the soaring price of fuel.

He said Qantas would have to make a decision soon about fuel costs after jet kerosene prices soared to more than $US135 a barrel last week.

Mr Dixon was in Ho Chi Minh City yesterday to sign a $1.2 billion plan to take control of the country’s state-owned airline, Jetstar Pacific, in which Qantas will have an 18 per cent stake. Qantas will lease 30 new aircraft for Jetstar Pacific and put staff from Sydney and Melbourne into key roles in the business.

The hint of a looming fare or ticket levy rise comes after Virgin Blue’s shock announcement on Friday that it was looking at a $12 increase in fares because of the high price of fuel and a bigger-than-expected profit downturn.

Qantas last increased the oil surcharge in February, taking the levy for flights to Europe above $200 for the first time.

The airline’s fuel bill for the first half of this financial year was $1.71 billion, compared with $1.74 billion a year.

Qantas has offset some of the effect of fuel increases with 94 per cent of its fuel needs hedged at $US73 a barrel for the year ending in June.

By :The Mole