WA's affordable airfare program

[AnotherFSO]

Do all states/territories have such subsidy programs?

Ministerial media release today: https://www.wa.gov.au/government/media-statements/Cook%20Labor%20Government/Affordable-Airfares-Program-soaring-again-in-2024-20240430

"The Western Australian Government's Affordable Airfares Program is back for its sixth consecutive year to make travelling within Western Australia more affordable.As part of this year's initiative, funding has been allocated to Virgin Australia and Qantas to provide discounted airfares on services between Perth and Broome, Kununurra and Exmouth.

For the first time in the program's history, funding has also been allocated to Airnorth and Nexus Airlines, with both airlines set to provide discounted airfares on services between Broome and Kununurra.

The program will offer:

Virgin Australia discounted airfares for $219 one-way between Perth and Broome and $259 one-way between Perth and Kununurra;
Qantas discounted airfares for $199 and $209, dependent on date of travel, between Perth and Exmouth; and
Airnorth and Nexus Airlines discounted airfares for $199 one-way between Broome and Kununurra.

It follows huge uptake in previous years, with nearly 29,000 tickets purchased in 2023 for services from Perth into Broome, Kununurra and Exmouth, potentially saving travellers hundreds of dollars.

The Affordable Airfares Program aims to improve the affordability of regional airfares throughout Western Australia and drive visitors to key tourism hubs that heavily depend on air access.

This program is in addition to the Cook Labor Government's groundbreaking Regional Airfare Zone Cap (RAZC) which supports regional residents with cost-of-living pressures by capping the total airfare amount they pay for flights to and from Perth to either $199 or $299 one-way, when booked as a return fare for personal travel.

Over 200,000 capped airfares have flown since that scheme's inception, helping to better connect regional residents to family and their community.

For more information about specified travel dates and bookings under the Affordable Airfares Program, please visit www.tourism.wa.gov.au/AffordableAirfaresProgram (http://www.tourism.wa.gov.au/AffordableAirfaresProgram)"

[ShandywithSugar]

When you consider CNS - MEL 1245nm encompassing 3 states and 1 territory (incl 4 capital cities) and Kununurra - Esperance 1134nm as one state with little population there isn't the population to support more services.

[unobtanium]

quantas is laughing all the way to the bank there cheapest qantaslinks NAA and alliance etc charge the highest airfare's

[Icarus2001]

quantas is laughing all the way to the bank there cheapest qantaslinks NAA and alliance etc charge the highest airfare's

Wow, just wow.

Personally, I would like to see someone mount a legal challenge to this scheme, I do not believe it is legal under the Australian constitution.

[Lead Balloon]

States licensing and subsidising intrastate air operations is nothing new nor unconstitutional.

[AnotherFSO]

Can anyone with a better memory than mine, answer this question for me?

Back in the 'good old days' of the Two Airlines Policy, were airfares actually regulated, or did they just tend to more or less equalise due to the lack of competition? I'm guessing the latter, but I seem to recall hearing the former at some point.

Thanks.

[tail wheel]

.....there isn't the population to support more services.

A fallacy. A few decades ago reasonable frequency was the critical factor, resulting in aircraft size and capacity being dictated by the requirement of a regular frequency schedule. Then CAA/CASA decided to kill off regional airlines and Reg 203 services (all except the protected few one) thus today the airlines use over capacity jets at the expense of a reasonable frequency.

And Government has almost gleefully permitted one major airline to buy up almost all their competition. Even if the latest acquisition was denied by the ACCC on the grounds of "competition" both airlines can, with broad smiles, deny any connection even with a 20% equity holding and Board seats.

Australian airlines is still a big club. There are those that are members and enjoy an element of "protection" and those that must stand on their own until the nominal equity runs out.

Back in the 'good old days' of the Two Airlines Policy, were airfares actually regulated....

I should know but don't remember, Actually regulated air fares was totally unnecessary as airfares, Government subsidies and other delicate financial and operational matters of mutual interest were discussed and agreed over regular lunches with a few fine reds. I still recall the Ansett fares by flying boat, for two people Hobart - Sydney return was £800 in 1952, slightly less than the price of a new FX Holden. Airline profits were as inevitable and guaranteed as the fine reds at regular "business" lunches. :}

[ebt]

States licensing and subsidising intrastate air operations is nothing new nor unconstitutional.

Correct. WA's Transport Coordination Act requires that airlines operating RPT services (as defined by that act, not CASA) have to have an aircraft license from the Minister for Transport. The Minister, in turn, has the ability to place conditions on those licenses. That could include price regulation, but the airlines would howl at that, so instead there is a carrot rather than stick approach. Which is all fine at the moment with plenty of money in the bank, and the moral hazard that if the Nats/Libs were going to attack the program, they would be hurting their base in the regions. And Qantas basically laughs all the way to the bank as they are the ones that most people fly on.

[Icarus2001]

Correct. WA's Transport Coordination Act requires that airlines operating RPT services (as defined by that act, not CASA) have to have an aircraft license from the Minister for Transport.

You are aware, no doubt, that both state and commonwealth governments have enacted legislation LATER found to be unconstitutional or at best an over reach.

Like I said until it is challenged, we do not know. Just because a state government writes laws for themselves to regulate aviation, a federal responsibility, does not make them legally sound or unassailable.

[Lead Balloon]

You're conflating safety regulation of aviation - clearly the Commonwealth's patch - with regulation to achieve socio-economic policies of a state within a state - clearly the patch of each state.

There are very few constitutional constraints on a state's power to spend the state's money. There is no doubt that a state can spend its money on subsidising the travel of people within the state.

There were route licensing systems within numerous states for decades. I can remember that when I started flying training in the mid-80's, the flying training organisation had its AOC and various state licenses in frames on its reception room wall. Those intrastate licensing regimes would have been knocked over on constitutional grounds a long time ago, if they were unconstitutional.

I'll do some research to find out whether there has been a challenge. If there were, my confident guess is that it was unsuccessful.

PS: I should have remembered that the constitutionality of state intrastate licensing schemes for other than safety purposes was settled in the Airlines of NSW cases, here (https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1964/2.html) and here (https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1965/3.html), in the High Court in the 1960s.

Here's (https://www.pc.gov.au/inquiries/completed/aviation/25aviation.pdf) an old but very informative Report of the (then) Industry Commission.

[DJ737]

Most, if not all of REX's Queensland Intrastate routes are in partnership with the QLD govt.

[AnotherFSO]

Answering my own question regarding the regulation of airfares during the Two Airlines Policy... the answer is found in https://www.bitre.gov.au/sites/default/files/report_073.pdf

"... domestic aviation policy began to be increasingly criticised on the grounds that effective competition had not been achieved and both airlines were operating the same equipment on the same routes with the same schedules for the same fares. In response to these criticisms some changes were made to the agreement in 1972.

The policy debate, partly stimulated by dramatic decreases in price and increases in availability of international air travel, continued through the 1970s. The end result was the introduction in 1981 of a package of legislation which remained largely unchanged until its repeal with deregulation in October 1990. The 1981 Airlines Agreement was designed to increase the level of competition within the industry, but it maintained the basic thrust of the two airlines policy as it applied to the trunk route network.

The fundamental question of the Commonwealth's role in the economic regulation of interstate aviation was addressed by the Independent Review of Economic Regulation of Domestic Aviation (May Review), commissioned by the Hawke Government in 1985.

The May Review, which took place over about two years, was critical of the existing arrangements and drew attention to significant public dissatisfaction with the current policy, including the widespread view that it worked to the disadvantage of consumers and encouraged the airlines to serve the high yield (business) market to the detriment of the leisure market. It found that, in comparison with its overseas counterparts, Australian aviation was characterised by relatively low labour productivity and relatively high and stable profit levels.

In October 1987 the Government gave notice that it would terminate the Airlines Agreement in October 1990 and allow the market to operate within the constraints of the established competition policy controls applicable to industry generally (Evans 1987). In announcing its decision, the Government indicated that its objective was to create an environment which would foster:

- increased responsiveness by airlines to consumer needs;
- a wider range of fares and types of services to provide enhanced travel opportunities;
- increased competition and pricing flexibility, leading to greater economic efficiency in the industry; and
- a continuation of Australia's world-renowned aviation safety record.

In practice, the deregulation decision meant that from 31 October 1990 the Government withdrew from economic regulation of the following four matters.

Firstly, controls over the importation of aircraft were removed. These controls provided the basis for the legislative and contractual arrangements which regulated the industry.

Secondly, the detailed determination of the passenger capacity that could be provided by each trunk airline ceased. Under the two airlines policy, Ansett and Australian had equal capacity over competitive routes.

Thirdly, the Independent Air Fares Committee (IAFC), which set all fares for scheduled passenger services, was abolished and the Commonwealth withdrew from the determination of air fares. During the nine years in which the IAFC set fares, the revenue per passenger kilometre, averaged over Ansett, Australian and Eastwest services, decreased slightly in real terms.

Fourthly, the constraints on the entry of new domestic operators to trunk routes were removed.

In strict terms, the two airlines policy did not apply to interstate routes, but rather to the provision of scheduled passenger services over trunk routes (which included both interstate and intrastate routes). Under the Airlines Agreement Act 1981, a trunk route was defined as any route linking the following 18 trunk route centres: Adelaide, Alice Springs, Brisbane, Cairns, Canberra, Coolangatta, Darwin, Gove, Hobart, Launceston, IMackay, Melbourne, Mount Isa, Perth, Proserpine, Rockhampton, Sydney and Townsville."

[AerialPerspective]

Wow, just wow.

Personally, I would like to see someone mount a legal challenge to this scheme, I do not believe it is legal under the Australian constitution.

Precisely which section of the Constitution??

[AerialPerspective]

You are aware, no doubt, that both state and commonwealth governments have enacted legislation LATER found to be unconstitutional or at best an over reach.

Like I said until it is challenged, we do not know. Just because a state government writes laws for themselves to regulate aviation, a federal responsibility, does not make them legally sound or unassailable.

s51 of the Constitution contains no sub-section that grants a head of power to the Commonwealth to regulate aviation. The Commonwealth's ability/power to regulate aviation comes from the Foreign Affairs power in s51 which empowers the Commonwealth to enter Treaties, etc. The Chicago Convention is a Treaty and thus Australia's signing of it obliges the Commonwealth to enact legislation to give effect to the Articles of the Convention.

This does not stop a State within the Commonwealth from imposing certain regulations on the aviation businesses within that State. Requiring every airline operating in WA for example, to only employ locals, would not interfere with CASA's regulatory powers.

A good example was the fact that Ansett NSW never served alcohol on it's intrastate services in NSW, because NSW liquor licensing laws required a separate 'venue' license for each aircraft, as though each was a Pub. Other States granted right to serve alcohol on intra-state services to the airline not by aircraft registration, as long as the Cabin Crew were licensed in responsible service of alcohol in accordance with State law. That was regulation of an airline outside the scope of CASA's remit, by a State Government and was totally valid, if not ridiculous on the part of the NSW Government.

[MickG0105]

Commonwealth v state powers regarding aviation was addressed a couple of years back in a thread on the Queensland state regulated routes. Here's what I wrote then,

... the Commonwealth's powers regarding aviation are limited.

Having been written pre-aeroplane, the Australian Constitution makes no mention of aviation, so there is no explicit Commonwealth power to regulate aviation per S.51. The 1937 referendum that sought to provide the Commonwealth with powers to legislate on air navigation and aircraft failed; it was carried in only two states.

Both prior and subsequent to that referendum, the powers exercised by the Commonwealth regarding aviation had typically been conferred upon it by the states. For instance, for the Commonwealth to form the Department of Civil Aviation in 1921 under the Air Navigation Act 1920 (Cth) the states typically enacted empowering legislation (eg The Commonwealth Powers (Air Navigation) Act 1921 (Qld), Commonwealth Powers (Air Navigation) Act 1920 (Vic) and similar state acts) to facilitate that.

Notably, New South Wales did not pass specific legislation regards the Air Navigation Act 1920 (Cth). So when the DCA suspended Mr Goya Henry for flying around, over and under the Sydney Harbour Bridge in 1934, the High Court upheld Henry's challenge that the suspension was unconstitutional. (R v Burgess; Ex parte Henry (1936) 55 Commonwealth Law Reports 608).

The 1937 referendum attempted to address the High Court's ruling and it failed. The war then saw the states generally fall into line over conferring additional powers to the Commonwealth (eg Commonwealth Powers Act 1942 (NSW), Commonwealth Powers Act 1943 (Qld) and similar)

Fast forward to 1965 and there was a shift in High Court opinion. In Airlines of NSW Pty Ltd v New South Wales the Court held that Commonwealth had power to license all air navigation on the basis of safety, regularity and efficiency of the operations, including purely intrastate operations. Part of their thinking was that with air travel, there is no real meaningful distinction between interstate and intrastate regards the capability of an aircraft or its operation. But the intrusion of the Commonwealth into intrastate aviation was limited, as determined by the High Court in 1976. In Attorney-General (WA); Ex rel Ansett Transport Industries (Operations) Pty Ltd v Australian National Airlines Commission (1976) the Court held that while the Commonwealth could regulate intrastate air operations in order to ensure physical safety, it could not do so for the purpose of ensuring the economic viability and commercial success of that operation.

Queensland's regulated routes are managed under the Transport Operations (Passenger Transport) Act 1994. The purpose of that Act is to achieve the provision of the best possible public passenger transport at reasonable cost to the community and government. Given the economic tilt of the Queensland legislation and the fact that it doesn't seek to intrude onto the Commonwealth's patch of safety regulations, it is doubtful that a challenge to its operation would be successful.


​​​​​​At least some of it is applicable to the WA discussion.

[Pearly White]

Wow, just wow.

Personally, I would like to see someone mount a legal challenge to this scheme, I do not believe it is legal under the Australian constitution.
It's about the general vibe of it though.

[MalcolmReynolds]

It's about the general vibe of it though.
It’s Mabo, it’s justice, it’s the vibe. No that’s it it’s the vibe. I rest my case. 🤣

[ebt]

Commonwealth v state powers regarding aviation was addressed a couple of years back in a thread on the Queensland state regulated routes. Here's what I wrote then,



​​​​​​At least some of it is applicable to the WA discussion.

The Queensland legislation is similar to WA's Transport Coordination Act in that respect, where one of the stated objectives of the TCA is "to ensure that the people of this State are provided, as far as is practicable, with reliable, efficient and economic transport services."

My personal view is that the large amount of lattitude given to the Transport Minister to impose license conditions is a bit of an issue, and any challenge would be a good thing. For one, the ability of the DOT to use a policy to restrict charter flights to one per week per customer on RPT routes is something that probably should be loosened up.

[AnotherFSO]

Another WA govt media release. This linked page lists the number of capped fares flown to various WA destinations: https://www.wa.gov.au/government/media-statements/Cook%20Labor%20Government/Boost-for-regional-flights-to-keep-cost-of-living-support-flowing--20240506Boost for regional flights to keep cost-of-living support flowing
Significant cost-of-living relief will continue to flow to regional residents through the 2024-25 State Budget, with the Cook Labor Government committing an additional $64.6 million to its flagship Regional Airfare Zone Cap (RAZC) scheme.

$64.6 million funding boost for the Regional Airfare Zone Cap Scheme
New investment will keep flying affordable for regional residents
More than a quarter of a million regional zone cap fares flown in 18 months
Further $29.3 million allocated for upgrades to regional and remote airstrips

Significant cost-of-living relief will continue to flow to regional residents through the 2024-25 State Budget, with the Cook Labor Government committing an additional $64.6 million to its flagship Regional Airfare Zone Cap (RAZC) scheme.

The RAZC scheme was a key election commitment from the WA Labor Government and has been enormously successful, helping thousands of regional residents manage the costs of flying to and from Perth since it was established in mid-2022.

The scheme caps the cost of airfares for regional residents year-round at $199 or $299 one-way on return flights to Perth for personal travel, and is delivered in partnership with Airnorth, Nexus Airlines, Qantas Airways, Rex, Skippers Aviation and Virgin Australia.

The new $64.6 million investment will extend the scheme until the end of 2025 - ensuring regional residents can continue to access affordable airfares throughout the Government's scheduled review of the initiative from mid-2025.

The major funding injection comes as the latest statistics show more than a quarter of a million capped airfares have now been flown since the scheme's inception.

A total of 254,844 capped airfares were flown in the first 18 months with Karratha, Port Hedland, Kalgoorlie and Broome seeing the highest usage of the scheme.

Karratha residents have taken the largest number of zone cap fares at 63,373, with Port Hedland, Kalgoorlie and Broome all seeing around 30,000 capped fares flown.

The Cook Labor Government will also deliver $21.3 million for upgrades to regional airstrips including Carnarvon, Onslow, Albany, East Kimberley and Eucla. A total of $8 million will be allocated to critical upgrades to the Carnarvon Airstrip, while $13.3 million has been committed to upgrades at East Kimberley, Albany, Eucla and Onslow pending the outcomes of funding agreements.

A further $8 million has also been allocated to the Aboriginal Community Airstrip Renewal Program.

For more information on RAZC, visit www.farego.wa.gov.au (http://www.farego.wa.gov.au)

Comments attributed to Transport Minister Rita Saffioti:

"We established this scheme to help regional residents manage the cost of flying to and from Perth and this major injection in funding will ensure we continue to support families manage cost of living pressures.

"Flying to and from Perth for regional residents is not always a choice and we'd heard repeatedly from regional residents about the significant cost barrier when it came to flying to Perth for family reasons or to access essential services.

"Now, 18 months into the scheme, more than a quarter of a million capped airfares have been used by regional residents, which is a clear indication that this initiative is making a real difference to regional communities.

"By making air travel from the regions to Perth more affordable, our Government is helping to ease cost of living pressures, while building stronger regional communities and the State's aviation capacity."

[Hoosten]

Around 1988 I think a Brisbane Sydney flight was around $650 each way. In those days, a lot. Exactly the same fare on both airlines to the cent. And I'm pretty sure the fares were set by the government.

[megan]

I'm pretty sure the fares were set by the governmentThey were, by an appointed Commission, initially fares were identical, then allowance for fare differences were permitted, but only that permitted by the Commission. I've read that Ansett and TAA had to depart five minutes apart with Ansett going first. Not going to post a link in order to give the Mods an easy time but a search for "THE 1981 AIRLINES AGREEMENT", by H BURMESTER is informative.