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Tuesday, 29 August 2000
Page: 19516


Mr BAIRD (3:14 PM) —My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. Would the minister outline to the House the benefits expected to flow to Australian travellers from increased competition in air travel with the entry of Virgin Blue airlines into the market yesterday?


Mr ANDERSON (Deputy Prime Minister) —I thank the honourable member for his question and note his real interest in aviation matters. The launch of Virgin Blue is a very clear demonstration of how the government has transformed the environment in the Australian airline industry. For the first time, new entrants like Impulse and Virgin Blue have a real chance to operate successfully. Labor talked a good game about opening up our skies and increasing competition, but it was all hot air. It did not happen; it went nowhere. We are now entering a new era of affordable airline travel, and it took this government to deliver it.

Over the weekend, the member for Batman claimed—I do not know on what basis—that the Labor Party had opened up Australia's skies. The fact is that Labor did a good job of talking about increasing competition in the airline industry but it all went nowhere. In contrast, this government leased the major airports, with the result that their operators now have a financial incentive—

Opposition members interjecting—


Mr ANDERSON —They do. They have a financial incentive to provide adequate terminal facilities. This government also changed the foreign ownership rules and made it easier and simpler for Virgin Blue to start operations in this country—indeed, their first flight will be on Thursday of this week. It would have been a bureaucratic impossibility under Labor. It was this government that created an economic and business environment where investment for new entrants became attractive. That increased competition will create jobs, and it will reduce prices for the travelling public. It is worth noting that the cost of economy airfares in recent years, in real terms, has been rising, not falling. In the case of up-market airfares, it has been rising even more rapidly. We will see reduced prices for the travelling public and we will see a boost to our tourism industry—now our biggest export earner.

Virgin Blue now employs about 300 people. Impulse has put on an extra 350 staff, including 110 staff at its Newcastle reservations centre, and it is continuing to recruit new staff. We are seeing a very interesting development indeed. It could even be said that, during the term of one narrow window of opportunity, it was possible for people to purchase an airfare from city to city that was cheaper than the cost of a taxi to go to the airport. We have achieved all of this without cutting any corners on safety. Impulse and Virgin Blue have been through a very rigorous approval process that involved 14 CASA staff working full-time for seven months. Both operators are safe; both have earned their right to fly.

Whilst some have claimed that increased competition on the eastern routes might somehow affect regional Australia, I have to say that the east coast sees some of the busiest sectors in this country—indeed, in the world. I think Sydney to Melbourne is the third or fourth busiest sector in the world today, and it can well sustain competition from four airlines. The airlines have heard from me regularly about the importance of maintaining and improving their services in regional Australia, and the fact remains that our policies have transformed Australia's airline industry to the great benefit of everyone. At the same time, we are reforming the Civil Aviation Safety Authority in a measured and responsible way. We have introduced the best and most advanced traffic control system in the world, and these reforms are of benefit to the broader economy, to the tourism industry, to regional Australia and to the travelling public.