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International Air Services

Inquiry report

This report was released by the Commonwealth Government 3 June 1999.

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Cover, Copyright, Table of Contents, Abbreviations, Glossary, Terms of reference, Overview, Recommendations

1   Introduction
1.1   This inquiry
1.2   The Productivity Commission's approach
1.3   This report

2   The airline industry
2.1   Australian airlines in the global airline industry
2.2   Growth and distribution of world air traffic
2.3   Growth in Australia's international air transport industry
2.4   Demand characteristics of air travel
2.5   The demand for freight
2.6   The economies of airlines
2.7   Airline profitability

3   Regulation of international air services
3.1   History of bilaterial air services regulation
3.2   The bilaterial framework
3.3   Regulation of non-scheduled services
3.4   The role of ICAO and IATA
3.5   Regulation of non-scheduled services
3.6   Regulation of non-scheduled services

4   Trends in liberalisation of air services
4.1   International trends towards liberalisation
4.2   Recent changes to Australia's aviation policy

5   Australia's international aviation policy
5.1   Policy objectives
5.2   Economy wide approach
5.3   Responding to market demand
5.4   Balance of benefits

6   Economic effects on airlines, users and the economy
6.1   Effects on airline costs
6.2   Effects on airline revenues
6.3   Competition among airlines
6.4   Effects on passenger airfares and services
6.5   Effects on users of air freight
6.6   Regional effects
6.7   Economy wide effects

7   Capacity allocation and the International Air Services Commission
7.1   Multiple designation in Australia
7.2   Has multiple designation and the IASC provided a net benefit
7.3   Alternative allocation approaches
7.4 The International Air Services Commission Act
7.5   Policy statement of the Minister for Transport and Regional Development
7.6   General capacity allocation criteria
7.7   Allocation on contested routes
7.8   Start-up provisions
7.9 The use-it-or-lose-it principle
7.10   Renewal of determinations
7.11   Relationship with the ACCC
7.12   Conclusion

8   Access to airports
8.1   Australian and overseas international airports
8.2   Existing operational constraints on airport access
8.3   Pricing at airports
8.4   Slot management
8.5   Providing competition in on-airport services
8.6   Conclusion

9   Towards further liberalisation
9.1   The liberalisation agenda
9.2   International production and trade in air services
9.3   Ownership and control in the designation of airlines
9.4   Unilateral reform
9.5   Bilateral liberalisation
9.6   Regional reform option
9.7   Plurilateral open club
9.8   Multilateral liberalisation
9.9   The Commission's preferred approach
9.10   Competition principles legislative review findings


A   Conduct of the inquiry

B   Competition principles agreement

C   The Australian international air services market

D   Australia's international trade agreements covering air services

E   Australia's international air services arrangements

F   Impact of liberalised international air services agreements