Warren Truss (Wide Bay, National Party, Shadow Minister for Infrastructure and Transport and Local Government) Share this | Hansard source

I thank the Minister for Infrastructure, Transport, Regional Development and Local Government for making a statement to the House today on the Australia-United States ‘Open Skies’ Agreement and, in particular, for choosing to make a ministerial statement rather than answer a dorothy dixer at length, as many of his colleagues did during question time today. I also congratulate him and the Department of Infrastructure, Transport, Regional Development and Local Government in good grace on the completion of this air services agreement.

The minister spoke about his pride in this achievement and complimented a number of people who were involved in the agreement. If he had been a trifle more gracious, he might have even acknowledged that this was a set of negotiations that was commenced by the previous government and was well advanced when he took office. In fact, I can recall that, when Virgin Blue came to me, as Minister for Transport and Regional Services, and expressed their interest in opening up services to the United States, the barriers that exist with the four-flights rule arose as an issue that would need to be addressed.

These discussions go back for something over two years. In July of last year, following detailed discussions at an official level in the United States, it was agreed that there should be a discussion about a more comprehensive new air transport agreement. Then, on 29 September 2007, Minister Vaile and the US Secretary of Transport, Mary Peters, formally confirmed each country’s commitment to further strengthening the aviation relationship through a more ‘open skies’ arrangement.

This new air services agreement is a significant advance and will provide more opportunities for air services between Australia and the US. However, we should avoid picking up too much of the US terminology of ‘open skies’ in relation to an agreement like this one. Whilst it is true that it will allow some more liberalisation of arrangements, it is a long way short of ‘open skies’. The minister used the word ‘landmark’, although this agreement goes little further than the agreement negotiated in 2006 with the UK; it is very similar in content. However, it is nowhere near as free and open as is our arrangement with New Zealand, which is perhaps the closest anywhere in the world to a genuine open skies arrangement. The Americans like to use the term ‘open skies’ but in reality there is still a host of restrictions in place which prevent competition with US airlines.

I do not think we should ever use the term ‘open skies’ in the context of an agreement with the US. Indeed, the minister in his statement made the comment, in looking at what our aviation policy should be, that we should ‘not open our skies while other countries keep their own markets closed: this would do nothing but allow other airlines to exploit our markets, without allowing the Australian airline industry to compete’. The reality is that this agreement actually does that, because the United States is not lifting the restrictions on Australian airlines operating in the US. It will still not be possible for an Australian airline to run domestic services in the United States, whereas a US airline is quite at liberty, and has been for a long time, to operate air services within Australia. The minister then went on to make the very valid point that many international airlines are supported by government subsidies, bankruptcy protection and divergent tax regimes, all of which create market distortions. Of course, again, that classically applies to the US market.

While this is a freer and more open agreement, the reality is there will still be substantial restrictions on the capacity of an Australian airline to operate within the US, and it is simply unlikely that the US Congress would agree to the lifting of those sorts of restrictions. It is perhaps a little unfair to characterise this as an ‘open skies’ agreement. Nonetheless, it will provide significant opportunities for Virgin Blue—or V Australia now—to undertake services to the US, as it has planned, and hopefully allow other airlines to enter the route.

As the minister rightly mentioned, tourism to and from the United States is particularly important. The shadow minister for tourism, the member for Moncrieff, is amongst those who have spoken very effectively on the importance of this agreement and the need to open up better transport links with the United States. We would like to have more visitors, more tourists, from the United States. It is a high-yield market and it is disappointing that more US tourists do not come to this country.

There are two significant airline initiatives which could boost tourism numbers from the United States to Australia. The first is to allow low-cost carriers on the route to encourage people to put competitive fares on to that market. With Jetstar and V Australia now committed to providing low-cost fares on the route, I think that we will see real competition for the first time and, as a result, more people will be encouraged to travel—although I suspect there may be more people encouraged to travel on cheap fares from Australia to the United States, rather than vice versa.

I therefore come to the second point, which would be even more important in encouraging US visitors to come to Australia, and that is having more US carriers operating on the route. The reality is that only United Airlines services Australia at the present time, apart from a service by Continental from Guam into Cairns. United Airlines provides fairly ordinary services, only going to Sydney and to Melbourne. If we could have more US carriers on the route, then more US tourists would come to Australia, because US passengers like to fly on American airlines. There is probably a stronger nationalistic tendency in the US than anywhere else.

There have been no restrictions on more US carriers coming to Australia—a number of airlines have tried it in the past but failed—but there has not really been the commitment that is necessary from US carriers to enter this route and to bring the number of Americans there should be to enjoy the tourism experiences of Australia. This agreement will not in fact make any advances in that regard, other than perhaps potentially opening up an option for on-carriage. The on-carriage options are welcome but they are always dependent on a third country also agreeing. For instance, the minister mentioned that airlines will be able to travel through various alternative countries between Australia and the United States. But some countries are unlikely to grant that approval—for instance, Japan, which would be a prime option for routes between Australia and the US. The Japanese are most unlikely, in their current mood, to allow that sort of traffic. So there will still be limitations from that perspective.

We do need to attract a wider range of US carriers to the Australian market. Hopefully, with V Australia and Jetstar entering the market and Hawaiian, Canadian and other airlines having an interest, we will have more North American carriers coming to Australia. I think it is also important that these carriers come not just to Sydney; the Sydney market is well serviced at the present time by United and Qantas. What I would like to see is more direct flights into Melbourne, Brisbane, the Gold Coast and indeed other tourist destinations in Australia, such as Cairns. Those are the places that could benefit from the advent of lower cost carriers bringing tourists from the US to Australia.

This needs to be a commitment from both sides of the Pacific. We want US carriers to take up these opportunities and Australian carriers to recognise the flexibility that this agreement provides so that the flights are there to bring people to Australia for a cost-effective holiday. I welcome this new air services agreement. It is somewhat short of being ‘open skies’, but it is a substantial advance and we need to recognise the opportunity and the example that this provides for other air services agreements between Australia and our aviation partners.

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