Airline Affairs

Airline ‘War of the Pacific About to Begin:

Forget Pearl Harbour, the real war of the Pacific is about to begin between America’s two largest carriers. United and Continental and its Pacific rim competitors led by Qantas and Air New Zealand.

The battle is being fought over the terms of the bilateral air services agreement between Australia (and indirectly New Zealand as the two are largely interleaved due to geographic considerations) and the USA. This forty-year-old document is now woefully out of date and allows the giant US carriers to uplift a considerable amount of regional traffic at the expense of Qantas and ANZ Qantas has perhaps most to lose as United and Continental begin to flood the market with unwarranted increases in capacity. Continental has increased its capacity between the USA and Australasia by more than 80% in less than six months while United has doubled capacity since it took over the ex-PanAm routes during early 1986. What irks Qantas and ANZ is that the majority of this capacity is being used to fly passengers not between Australasia and the USA but between Australasia and the various regional Pacific destinations. Continental is marketing Fiji and New Zealand destinations aggressively throughout Australia while United is also planning to open up this market further during 1987 at the direct expense of our own carriers.

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