Disincentivising Trans-Pacific Competition

Singapore Airlines was stopped by the Federal Government from flying between Sydney and Los Angeles - to rub salt in the wound - they were told it was in their interests to merge with QANTAS. I am not sure why politicians should be making that call. Air Canada was granted permission (?) last month by the federal government to begin operating between Sydney and Los Angeles, as well as Sydney and Toronto. So why not Singapore Airlines?

I am consistent customer of Trans-Pacific flight. We have settled on QANTAS for reasons of quality of service. We used to fly United Airlines, but too many cancelled flights and poor service incidents rubbed us the wrong way. But we only have two choices, having a third, or fourth, or more would be ideal in my opinion. Bring the competition on.

This airwise forum has an interesting thread on the ins-and-outs of international travel including oddities such as 4th/5th and 6th freedom rights. The plot thickens somewhat as United Airlines is a partner of Singapore Airlines in certain routes. From the airwise forum;

As far as I am aware, there is a recently concluded Open Skies Agreement between Singapore and the US which covers access between their two respective countries, but does that cover access from a third party country? I would not be so sure. It would depend greatly, I would think, on whether the perceived service is a straight out operation (ie: a separate flight originating in SYD/BNE/MEL) or whether it is a 'continuation' service ie: SIN-(SYD/BNE/MEL)-LAX.

Further, the bilaterals between Australia and the USA are a negotiated treaty, under the auspices of Bermuda 2, if I am not mistaken. In the past, when additional or replacement carriers have sought to access the route, the respective Governments have had the right to nominate the preferred operator. ie: if UA were to go "belly up" it would be the US Government who would nominate another US carrier to replace them on the route. Similarly, should the Australian Government wish to allow access (as it did a few years ago) it would nominate the carrier - and in this case, it was Ansett who were nominated to the route just before their untimely demise.

Depending which publication the figures come from, QANTAS earns between ten and twenty percent of its yearly profit from the Australia-US route. So there is incentive on their part to lobby the government to stop any competition on a major revenue source of theirs.

You would think the government would have learnt from the protectionist scam that was the Australian Wheat Board and its fallout. When you create protected economies like this you are setting people up to fail. Charles Harpur understood this in the 1850s, I don't understand why the government cannot fathom that today.

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