International Air Services
Government response to the Productivity Commission’s report on International Air Services
The Government response to the Productivity Commission’s report on International Air Services, was issued with the inquiry report International Air Services on 3 June 1999. Also see:
Summary of the commission’s findings
For over 50 years, the international bilateral system has governed international aviation activities. This system operates through bilateral air services arrangements and imposes restrictions on airline ownership and control, capacity, frequency and destination of flights. The Productivity Commission (PC) concluded that the system restricts competition, increases the costs of aviation activities and is unable to cope with the ever growing demands for international air services. The Australian Government, like a number of others, has been loosening the restraints but, in the view of the PC, not quickly enough.
The PC argued that, as long as the rest of the world remains committed to the bilateral system, unilateral action by Australia to remove all current bilateral access restrictions on foreign carriers would make Australia worse off. The PC instead proposed a policy of liberalising on a reciprocal basis with other countries, bilaterally, plurilaterally and eventually, multilaterally. It also recommended a package of measures to increase the scope for international air services for regional Australia.