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United's trans-Pacific services in capacity terms represent less than 2% of its total operating capability. If it wanted to, United could cause great harm to a vastly more restricted Qantas (and Air New Zealand) which looks to the Pacific for nearly a third of its total uplift. United would like to significantly increase their capacity with additional 747s or DC-1Os flying direct to North Queensland ports.
Bilaterals Battle Set to Erupt into Trade War
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Australia has become a sideshow to the increasingly chaotic US airline scene since deregulation was enacted in 1978 following the Australian Government’s recent notice of termination of the capacity provisions of the bilateral air services agreement between the two countries.
This move, which effectively freezes air services at their present level, followed the fourth of a series of meetings between US and Australian government officials on the bilateral which collapsed in Canberra during May amid a series of recriminatory statements from both parties.
The Australian Government claims US airlines are ‘dumping” excessive airline capacity across the Pacific, far in excess of the real demand. It claims they are filling some of the spare seats by pirating from Qantas a large number of passengers travelling between intermediate points in the Pacific and it wants the US government to restrict its airlines’ capacity to a level realistically matched to US-Australia travel. Australian negotiators complain that Continental carries more people between Australia and New Zealand, Fiji and Tahiti than it does between the US and Australia.
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