Deregulation-Australia Pt.II

To Praise Deregulation, Not to Bury It Part II

This is our final article in our Deregulation Countdown series and examines the situation in Australia as we bade farewell to 38 years of the Two Airline Policy. Our previous two editions analysed what has occurred in both Canada and New Zealand since their domestic airways were fully deregulated. To better understand what may well occur locally, read on . . .

The Marketing of Air Services

The aviation business is more and more an extension of the tourist industry. Equally, in a deregulated environment, marketing is critical. The fact that the two major airlines have until now been guaranteed a 50% market share, give or take 3 or 4 percentage points, has meant little price competition. Instead, competition has focussed on service and also acquiring associated assets. This acquisition process by airlines is not unique to Australia, but in the Australian market it has placed the two carriers in a strong position, with pervasive vertical and horizontal linkages – including resort hotels and surface operations as well as acting as tour operators, wholesalers and travel agents.

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