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Case Studies

Case Study A1: A comprehensive review of air services policy

The distances that separate Australia from many of our trading partners and prospective tourist markets make a competitive aviation industry critical. Aviation plays a central role in providing access to Australia's trade and tourism markets, and provides an important link between Australians and our overseas friends and families.

In 2005, the government announced that it would review Australia's international air services policy. The review, which was the first such review since 2000, found that the current policy of liberalising air services arrangements is right for Australia. Importantly, Australia will continue to recognise 'open skies' as an aspirational goal to be sought on a case-by-case basis when it is in the overall national interest. Increasingly open aviation markets enable Australians to have better access to the benefits of a competitive aviation sector, and Australian airlines better access to international markets.

In announcing the outcomes of the review, the government included four new objectives in its approach to negotiating international air services agreements. It indicated that it will:

  • continue to address Australia's trade and economic interests through Australia's air services policy
  • seek to maintain and expand access to a range of aviation hubs
  • give explicit recognition to the importance of an Australian-based airline industry
  • recognise the vital contribution that foreign carriers make to the aviation industry.

The objectives require some balanced judgment. The review found that retaining Australian-based airlines, and encouraging their growth, is of key economic and strategic interest to Australia, because of the national income they provide, their critical importance as the key drivers of Australian tourism and the important role they play in times of crisis in the region, such as during the Asian tsunamis and the Bali bombings. At the same time, the review found that Australia also needs to attract and retain major foreign airlines to provide competition and improve our access to global trade and tourism markets.

The government announced that it will continue to improve access to Australia's regions by offering foreign carriers unlimited access to all airports other than the four major gateways of Sydney, Melbourne, Brisbane and Perth.

As part of the review, the department consulted broadly with other government agencies. This included a significant effort in research and analysis supported by the Bureau of Transport and Regional Economics.

The government's revised approach provides the framework for the department to negotiate access for Australian international airlines to international air space as part of our bilateral air services arrangements. The policy will build access for Australians to international air services and provide a sustainable basis for the operations of Australian airlines and the broader aviation and tourism sectors.