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

Remaining freight regulationChapter 4The mixed-configuration aircraft which carried the majority of cargowere still subject to regulation in terms of the passenger market. Inaddition, prospective entrants were required to establish that therewas a demand for their proposed services and to provide theundertakings as to the use and disposal of the aircraft (Department ofAviation 1985a, 37). It was also claimed that, despite the regulatorychanges, the procedures for importing aircraft and obtaining licencescontinued to create significant barriers to entry (Dairy ComnercialNews 1986, 3).The impact on freight services of continued Cononwealth regulation ofthe interstate passenger market was subsequently highlighted by TAA inits submission to the Independent Review of Economic Regulation ofDomestic Aviation (TAA 1985b, 56-57). TAA stated that severalregulatory provisions prevented it from operating freighter servicescombined with marginal passenger services on certain trunk routes atnight using the A300 aircraft. Constraints in the areas of capacitydeterminations and the requirement to seek agreement on load factorsmeant that operation of the proposed services would necessitate thewithdrawal of passenger capacity from other parts of the network. Inaddition, TAA was concerned that the Independent Air Fares Committeewould not necessarily approve a special fare to attract passengers atunpopular times. It also considered that the curfews based on enginetypes rather than noise levels would prevent the proposed service frombeing offered.Earlier Airlines Agreements had made no reference to the role ofQantas or other international airlines in the carriage of domestic aircargo on scheduled services over trunk routes. The Government'spolicy had been that Qantas could only carry domestic cargo as a subcontractorto Ansett or TAA (Department of Transport 1979a, 115).Clause 15 of the Schedule to the Airlines Agrement Act 1981 specifiedthe role of Qantas as the provision of international air services andnot domestic regular public air services (Independent Review ofEconomic Regulation of Domestic Aviation 1987, 103, 153, 254).However, there was provision for the carriage of international trafficover domestic sectors as part of Qantas' international services.Comnonwealth authorities interpreted this clause as excluding Qantasfrom participation in the domestic freight market unless it had theconcurrence of the parties to the Airlines Agreement. Thisinterpretation was challenged by Qantas which argued that itsexclusion from the domestic air cargo market was inconsistent with theliberalisation of policy towards this sector. Foreign carriers were29