A195/99 7th December 1999
The Federal Government has granted Virgin foreign investment approval to establish a new domestic carrier in Australia, subject to it meeting Australia’s other regulatory requirements.
Airport Coordination Australia has provisionally issued the airline with arrival and departure slots at Sydney Airport, including slots during the peak periods.
The Assistant Treasurer, Senator Rod Kemp, said the Government’s policy is that foreign companies can acquire up to 100 per cent of a domestic carrier, or establish a new aviation business, unless the proposal is judged contrary to the national interest.
"The Government believes that it is in the national interest for Australia to have a third major airline," he said. "The Government has accordingly granted Virgin foreign investment approval to establish a new domestic airline in Australia."
The Minister for Transport and Regional Services, John Anderson, said the Government welcomed the prospect of increased competition in the domestic airline market.
"The deregulation of our domestic airlines provided huge benefits to the travelling public, but airfares have slowly crept up over the years," he said.
"According to the Bureau of Transport Economics, economy class air fares have increased by almost 8 per cent in real terms since 1992.
"Increased airline competition will reduce prices for the travelling public, create jobs, and help boost our tourism industry.
"Airport Coordination Australia has provisionally allocated Virgin slots at Sydney Airport, including slots during the peak periods. Operators must hold a slot for each takeoff or landing they want to carry out at the airport.
"Virgin is still negotiating terminal access with the private sector operators of the major airports. It also has to obtain a number of key regulatory approvals before it can start operating.
"Most importantly, it needs to obtain an Air Operators Certificate from the Civil Aviation Safety Authority (CASA). The Government will regard the airline as an Australian operator, despite its foreign ownership, and it will be subject to exactly the same air safety requirements as Qantas and Ansett.
"Some people have expressed concern that competition between airlines may lead to a reduction in safety. Australia’s high safety standards will remain the same regardless of whether there are two or more major domestic airlines.
"Virgin still has a lot of work to do, but it has cleared the first hurdle," Mr Anderson said.
Media contacts:
Mr Anderson’s office Paul Chamberlin 02 6277 7680 / 0419 233 989
Senator Kemp’s office Richard Allsop 02 6277 7360 / 0419 482 497