THE proposed “open skies” agreement between Australia and Europe may only offer limited benefit to the Australian tourism industry.Transport Minister Anthony Albanese is to travel to Europe in July for talks with European Union officials about an open-skies agreement.Last week European transport ministers approved a mandate for the European Commission (EC) “to negotiate an EU-wide comprehensive air services agreement with Australia”, Mr Albanese told parliament this week.While Mr Albanese suggests that the mandate is “an important step towards an historic open-skies agreement” which “could deliver greater competition, more
flights and lower air fares between Australia and EU countries”, the benefits may well be limited, at least in the near term.
The agreement will cover only Australian and European Airlines, yet not one European airline, except British Airways, serves Australia in its own right.Over the past few decades, KLM, UTA French Airlines (now merged with Air France), Alitalia, Lufthansa, Olympic Airlines, JAT and Lauda Air have withdrawn from the Australian market as they gave way to lower-cost new world carriers Singapore Airlines, Malaysian Airlines, Cathay Pacific and more recently Emirates.Lufthansa code-shares with Singapore Airlines into Australia, Air France with Qantas, KLM with Malaysia Airlines and Finnair with Cathay Pacific.
While Europe is Australia’s largest travel market, with 4.5 million passengers, the majority travel on airlines other than Qantas and British Airways.Qantas serves only London and Frankfurt, having withdrawn from Paris, Rome, Athens, and Amsterdam mainly because its only long-range aircraft, the 416-seat 747-400, is simply too big to serve any city other than Frankfurt and London. In fact, Qantas is the only major long-range airline that does not have a true long-range 300-seat aircraft in its fleet – a fact that has hobbled its growth and now affected its fuel bill.However, the agreement will benefit Jetstar’s plans to launch European services, although those services will operate through Singapore or Bangkok and must still compete with Asian-based airlines such as Air Asia X, which operates from the Gold Coast and will start services from Perth in November.Qantas is not likely to take advantage of any open-skies agreement until it takes delivery of the 270-seat Boeing 787-9 in 2012 – which is far better suited to the size of the market that open skies would offer.But that aircraft must still operate through a fuel stop such as Singapore, whereas an open-skies deal works best when airlines can offer non-stops.
