Domestic Air Cargo Industry in Australia - Bureau of Infrastructure ...

CHAPTER 3 REGULATION AND INDUSTRY DEVELOPMENT TO 1978The domestic air cargo industry has been significantly affected bydirect Commonwealth Government regulation of air freight and air mailas we1 1 as by controls over airline passenger services. The latteractivities have impacted on the cargo market as a large proportion ofdomestic air cargo .is carried in the lower deck areas of passengeraircraft.The movement of air cargo has a1 so been 'affected by State governmentlicensing of air services on intrastate routes. Economic regulationis undertaken by all States except South Australia and Victoria. Themajor criteria applied to proposals for new freight services in theStates with economic regulation are the effects on the viability ofexisting airline passenger and freight services andthe impact onalternative forms of transport (Gawan-Taylor 1984a, 5; Review of NewSouth Wales Air Services 1986).This chapter out1 ines the evolution of Comnonweal th Governmentregulation and the development of the domestic air cargo industry upto 1978. The major events over this period are sumnarised in Table3.1.l Developments between 1979 and 1987 are discussed in Chapter 4.THE TWO AIRLINE POLICYCommonwealth Government regulation of the domestic air cargo industryhas historically distinguished between freight and mail. This partlyreflects the different shipper arrangements in the two sectors, withfreight being shipped by a variety of individuals and organisationswhereas a Comnonwealth authority is the sole shipper of mail.FreightDetailed economic regulation of Australia's domestic aviation industry1. For a detailed discussion of the evolution of the regulatorysystem see Poul ton (1981), Department of Aviation (1985a) and BTE(1985).15