Nice to see nothing’s changed about the relationship between Qantas and the National Party despite the pending takeover – the boys from the bush are promising to protect the duopoly for years to come and never mind who owns the Roo.

Like John Anderson before him, Nationals leader and Transport Minister Mark Vaile appears a ready captive of the “regional routes” threat. Too bad that it’s either a furphy or a form of corruption. The Qantas Link regional operation is a nicely profitable business with little sign in the bottom line that the Roo is doing any harm to itself on the bush routes. If there are a couple of towns returning less than the cost of capital, it would be monumentally dishonest of the federal government to run a hidden subsidy for them that costs the rest of Australia many scores of millions of dollars.

Steve Lewis’s story in the Oz this morning leads with the idea that Vaile will obtain some sort of jobs and regional routes promises from Qantas in return for approving the takeover. Such things are largely meaningless and easily given. The bigger story is in the tail: Vaile looking after the duopoly, using the promise of Virgin Blue flying the Pacific to keep Singapore Airlines of Qantas’s most profitable route:

Asked whether there were plans to revisit the issue – which was decided by cabinet last March – Mr Vaile said bluntly: “No.”

“I have said to Virgin this commitment doesn’t last forever, but to be fair to them, they are making an investment of hundreds of millions of dollars in equipment and setting up offices on both sides of the Pacific – we need to honour that,” he said.

“It would be a number of years before we revisit that, and I will be giving every encouragement to Virgin to get up and operating as soon as possible.”

So there you go – any company investing a few hundred million should be able to expect “a number of years” of protection from competition. See, it’s not just free-to-air TV that’s a protected species.

Never mind all the textbook damage such protectionism does to the rest of the nation when other airlines are being denied increased capacity. Try finding an economy seat into Australia on Singapore Airlines any time this month – they’re fully booked.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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