Heard a report on Newsradio about it this morning.
They made mention of some report stating that QANTAS achieves "38% more revenue per kilometer" on the LA route compared to the London route. The report put it down to a "demonstrable lack of competition" .
(Edited to add news link)
Source:
The Australian
Qantas support 'will entrench high fares'
From: By Steve Creedy
February 21, 2006
A HOWARD Government decision to protect Qantas on US routes will entrench fares that are 38 per cent per kilometre higher than on the more competitive London flights, a Singapore-backed study has found.
The finding by Canberra consultancy Econtech came as Singapore Airlines made a final plea for "a fair go" ahead of the likely rejection today by cabinet of its bid to fly between Australia and the US.
While Qantas (qan.ASX:Quote,News) refused to respond to "speculative news reports" by admitting defeat, it warned that Australians would know who to blame for higher fares.
"If the Cabinet opts to continue an outdated legacy of protecting Qantas, consumers will continue to pay high fares and suffer a lack of service enhancements that competition would bring," said Singapore Airlines regional vice-president Paul Tan.
"And every consumer forced to pay high fares and suffer a lack of choice will understand that the decision was made entirely by the Australian Government."
The Econtech report to Singapore Airlines says there is strong evidence of a lack of effective competition on the trans-Pacific route compared with other international routes from Australia.
That evidence included Qantas's higher market share of 64 per cent and aircraft passenger loads of 79 per cent compared with 69 per cent on other routes.
It said modelling estimated the number of passengers travelling between Australia and the US would grow by between 4 per cent to 8 per cent if there was more competition, providing an additional $114 million a year to Australia's tourism industry.
"More competition on the direct Australia-US route would lead to a reduction in airfares on the route, greater flexibility in flight schedules and more choice in airlines for prospective passengers," the report says.
Although Qantas (qan.ASX:Quote,News) may have succeeded in keeping Singapore off its lucrative US patch, it is expected to be less successful with other items in its wish list.
Cabinet is expected to reject its aggressive push to lift its 49 per cent foreign investment limit, as well as its bid for faster aircraft depreciation.
The airline's foreign investment case has attracted stiff opposition from within its own workforce, with unions representing pilots and maintenance workers coming out against it.
The Australian and International Pilots Association warned that lifting the cap could result in a repeat of the Ansett collapse in the wake of its acquisition by Air New Zealand.