Cabinet meets today to consider Pacific solution

Wednesday, 21 Feb, 2006 0

A Federal cabinet meeting today will consider if the Government’s aviation policy should be changed to allow Australia to pursue an open skies agreement with Singapore, and to amend parts of the Qantas Sale Act that would allow Qantas to become 100 per cent foreign-owned.

Suggestions are that Qantas has enough supporters inside to continue to stave off competition from Singapore Airlines, although the pro competition group, led by Tourism Minister Fran Bailey, will continue to press for more open skies.

“If the cabinet opts to continue an outdated legacy of protecting Qantas, consumers will continue to pay high fares and suffer a lack of service enhancements that competition would bring,” Singapore Air’s Australian boss Paul Tan said yesterday.

“It is important to note that this debate has raised the issue of competition policy, and highlighted to Australians that they are getting a raw deal on the Pacific route,” he said.

Adding to the tension is the suggestion that a decision to bar Singapore Air from the route could be seen as breaking the spirit of the free-trade agreement the two nations signed in 2003.

The two countries agreed “to review developments in the air transport sector at the first review of this agreement … with a view to including these [FTA] developments in this agreement”.

Many QF maintenance workers will be eagerly awaiting news of the decision as Qantas is expected to move to outsourcing to reduce costs if competiton is increased.

Graham Muldoon

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