Thursday, 21 December 2006
Outbound international capacity comes under the microscope after Qantas' proposed take over bid
Brisbane and Melbourne Airports have approached the PM seeking an increase in access from international carriers in the wake of the proposed take over of Qantas. Both airports have raised concerns over the concentration of international flights departing from Sydney Airport, and Macquarie Bank’s holding of Sydney Airport and prospective part ownership of Qantas has come under scrutiny.
The owners of Melbourne and Brisbane Airports have requested to be exempt from laws that limit the access of international carriers to Australia’s major airports. This would mean that they would receive the same regulations as regional airports that follow no restrictions and can freely accept international carriers that have previously requested greater access to Australia; such as Emirates and Singapore Airlines.
Brisbane Airport Corporation’s chief executive, Koen Rooijmans, has voiced his concerns that Brisbane Airport may have to turn away customers wishing to fly abroad as early as the end of 2007. Rooijmans has asserted that the capacity issues that are faced by the airport must be addressed. Since 2004, Qantas has reduced its international seat capacity from Brisbane by 21 per cent and Melbourne has seen a 5.6 per cent reduction in international seat capacity since 2000.
The Australian Financial Review quoted Rooijmans stating, “If [Qantas’] market share is below 20 per cent they’ve proved they’re not interested in Brisbane or south east Queensland from an international transport [perspective].”
“The federal government [should] open the skies in Brisbane for other carriers because they are stealing out of the pockets of the Australian market and out of the south-east Queensland market,” continued Rooijmans.
The transport Minister Mark Vaile has asserted that the government does not perceive that services to Melbourne and Brisbane airports are being constrained. He also stated that the opening of gateways is a commercial decision which should be left to airlines.
However, Nationals MP and Parliamentary Secretary for Transport and Regional Services De-Anne Kelly has supported the claims for more open skies. “The reality is that international seats into Queensland haven’t increased in nine years,” said Kelly in the Australian Financial Review. “Now how are we going to grow a vibrant tourism industry particularly in the Whitsundays, the Gold Coast and Sunshine Coast, if we don’t those international numbers.”
Macquarie’s investment in Sydney Airport and potential investment in Qantas is being monitored by the Australian Competition and Consumer Commission chairman Graeme Samuel, however JP Morgan analyst Matthew Crowe has asserted that Qantas’ strategic moves to use Sydney as a hub were being implemented before the proposed takeover.
“That’s very much been [Qantas’] strategy so far, to hub everything out of Sydney,” The Australian Financial Review cited Samuel stating. “The proof is in the scheduling.”
The Airline Partners Australia has assured that should they assume ownership status, capacity would increase by 40 per cent. Part of this strategy includes the reduction of services or moving them to Jetstar. This proposed move is said to lead to an increase in capacity, enabling Qantas to better service the smaller capital cities and regional airports. However, despite these proposed plans, international capacity still wanes for states such as Victoria.
“The reality is that since 2000, international seat growth in Victoria has been delivered almost exclusively by foreign carriers,” stated a Melbourne Airport spokeswoman in the Australian Financial Review. “Airline seat capacity is vital for tourism and business growth and, on experience of the past six years, if foreign carriers are not permitted to deliver new capacity, no one does.”