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Deregulation of the airlines will not necessarily provide a cheaper or more efficient service

PRU GOWARD: That dream of cheap air fares and the Australian skies opening up to all, that wonderful competition looks like having a few real world problems. Aviation Minister, Kim Beazley, says Qantas ought not be allowed on domestic routes, and Opposition spokesman, David Jull, says at the moment nobody else can afford to join. David Jull joins me now. Good morning David Jull. David, does the Opposition agree with Kim Beazley's view that Qantas ought not to become a domestic carrier?

DAVID JULL: Not completely at all. Prior to the election, we were looking at ways that we could stimulate the tourist industry in a hurry, and that was one of the ways that we were going to go, giving Qantas limited access on some of those domestic routes. One of the difficulties that we do have is that there don't seem to be too many new players around in terms of domestic airlines, and we thought that would be one good way of bringing about some competition. Pru, can I say that introducing Qantas to domestic routes wouldn't be completely without its difficulties. I mean, they are operating out of international terminals; there is the problem of a 90-minute check-in for passengers going through those terminals. I wouldn't think it would have much attraction for the businessmen of Australia, hanging around their terminals three hours a day, waiting to get there and back. But where it could be a great advantage would be on some of the tourist routes, and tourists, if they can get decent cheap fares, might be prepared to take that extra hanging around and perhaps not-so-regular schedules to get the cheaper fares.

PRU GOWARD: So just briefly then, what is the Opposition's view on Qantas?

DAVID JULL: We think that it's worth examining the prospect of allowing Qantas limited access. We also think ....

PRU GOWARD: Limited access, for tourists.

DAVID JULL: Yes, for tourists.


DAVID JULL: But we also think that we should be looking at the prospect of allowing some interlining by overseas airlines to carry their own traffic between Australian ports. Now Mr Beazley's also knocked that on the head. In our tourist action plan, prior to the election, we put that up as a very real proposition, and the reason we did that is that if somebody comes in on an overseas airline, they can't necessarily go to another point in Australia on that same airline, and that whacks the price up of their tour packages considerably. We did an exercise on ....

PRU GOWARD: Yes, but what's the point of having tourism if we can't make any money out of it, if it all goes to the international carriers?

DAVID JULL: Well, they still spend a lot of money around the place. I mean, if we're in real competition with Eastern Europe and other points in Asia and the Pacific at the moment, we've got to become competitive. Can I give you an example. If somebody flies in from the United States, for example, on one of the American carriers - say, Continental into Cairns - and then wants to go to the Gold Coast, and then wants to go to Sydney, if he can use that Continental leg for his internal travel in Australia, the cost of that tour package would come down in excess of $400. Now that makes us very competitive in terms of the rest of the world.

PRU GOWARD: Why can't we get that down by $400 to local people; that's shameful.

DAVID JULL: Well, we haven't got any competition in the skies at the moment, and quite frankly, I'm very concerned that we're not going to get too much when deregulation comes in on October 31. I was talking to one of the principals of one of the proposed new carriers just last night, who tell me that they have now put their application on the back-burner; they'll look at it again in the middle of next year, but they're not terribly confident.

And they're not confident for a number of reasons: they cite the economy as being a bit of a problem; they say that they've had dreadful trouble with this terminal space business, and all the proposed carriers are concerned about that. They say that they haven't had much interest from Australian financial institutions, and that's been brought about partly because of the pilots' dispute. There's not a great deal of confidence in aviation amongst the banks at the moment, and they say, frankly they haven't had much co-operation from the Government.

PRU GOWARD: So basically, you don't think Qantas, .... or any of those proposed new airlines that were supposed to be carrying domestic passengers on our major routes, you don't think they're going to be there?

DAVID JULL: I don't know if they're going to be there on October 31 this year, when deregulation comes in. Look, can I say this without being a complete stick-in-the-mud, but last week I attended the Asia Conference in Canberra, and it was very interesting there that both representatives of Ansett and Australian Airlines got up and spoke with some excitement about the prospect of deregulation, but both pointed out that we may be in for something on the high density route, such as Sydney-Melbourne and Sydney-Brisbane, but the thinner routes, don't get too excited about too much happening there. When we talk about the thinner routes we are talking about north Queensland, we're talking about Darwin, we're talking about Perth and all points in between, and it didn't come through to me that we were going to get terribly much in the way of discounted fares on those routes at this stage. I think the worst thing that can happen is that we'll have the status quo and literally nothing will happen.

PRU GOWARD: That's horrific news. But Kim Beazley, when he said that Qantas shouldn't compete domestically, said that it was so big it would swamp the other airlines. Now my understanding is that after five planes, there aren't great economies of scale for an aviation company, and, of course, if Qantas did come in domestically, that their competition would be Ansett which, after all, has world-wide connections. Do you think that we're restricting Qantas just a bit much?

DAVID JULL: Yes, I think we probably are. I mean, when you look at the Qantas schedules, sure, they've got traffic between Sydney and Melbourne, but there's only three or four or five services a week between Sydney and Brisbane and Cairns. On some of those routes, I think it could be wide open for a little bit of competition.

Can I say this too, Pru: that despite the fact that we're continually told that the pilots' strike is over and everything is back to normal, all you've got to do is compare the timetables that exist today to the timetables that existed pre the dispute. Pre the dispute, Cairns had 23 services a day; now they've got eight. And in terms of the restoration of the tourist industry, while some of the international numbers are picking up very well, such as those from Japan, the plain facts are that domestic tourism is dead, and part of the reason is that there isn't the confidence in the airline system at the moment; fares are too high and there are more Australians going overseas as the months go on, than want to holiday in their own country. The real reason for this is that you can go to Bangkok or you can go to Fiji, or you can go to Vanuatu or Hong Kong cheaper than perhaps you can go to Cairns or Darwin or Kakadu or some of these places.

PRU GOWARD: David Jull, thank you for your time this morning. It was beaut to speak to you.