No CrossRef data available.
We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
Published online by Cambridge University Press: 24 January 2025
The passage of the Airlines Agreement Act 1981 (Cth), along with other supporting legislation, represents the culmination of the most detailed public debate on airline regulation in Australia for almost 30 years. During this period, Australia has had an airline system characterised by the presence of essentially only two main carriers on the trunk routes. This system has been maintained by deliberate government protection of the two carriers in accordance with the terms of a series of airlines agreements. This protection is to continue. The 1981 Agreement is, however, significantly different from the earlier airlines agreements. The objective of the new Agreement is to maintain the previous two-airline policy “but with the objective of increasing the level of competition within the industry in a rational and orderly manner”.
The public debate that took place prior to passage of the legislation is not likely to cease. There is to be an inquiry to “undertake an objective assessment of the advantages and disadvantages of deregulating the domestic aviation environment”.
1 The other legislation consists of the Airlines Equipment Amendment Act 1981 (Cth), Independent Air Fares Committee Act 1981 (Cth) and the Australian National Airlines Repeal Act 1981 (Cth).
2 Airlines Agreement Act 1981 (Cth). The text of the Agreement appears as a schedule to the Airlines Agreement Act. The Agreement came into force on 26 January 1982.
3 H Reps Deb 1981, Vol 122, 2831.
4 Ibid 2830. At the time of writing this inquiry had not been established.
5 The other two major inquiries are the Domestic Air Transport Policy Review, Report to Minister for Transport (1979) and the Report of the Independent Public Inquiry into Domestic Air Fares (1981) (hereinafter the Holcroft Inquiry).
6 S Brogden, Australia's Two-Airline Policy (1968); Poulton, H W, “Legal and Policy Aspects of Air Transport in Australia” (1959) 26 Jnl Air Law and Commerce 13, 26-35Google Scholar; Richardson, J E and Poulton, H W, “Australia's Two-Airline Policy-Law and the Layman” (1968) 3 FL Rev 64Google Scholar; Domestic Air Transport Policy Review (1979) ch 5; Poulton, H W Law, History and Politics of the Australian Two Airline System (1982)Google Scholar.
7 H Reps Deb 1951, Vol 215, 2399. This followed Cabinet consideration of a submission by the Minister for Civil Aviation. See Submission 160 of 6 November 1951 and Cabinet Decision 233 of 20 November 1951. (Copy provided by Australian Archives.)
8 Cabinet Submission 205 of 23 October 1950 (copy provided by Australian Archives). No final decision was taken on this submission. Instead an investigation into the finances of the two airlines was undertaken.
9 Ibid.
10 Civil Aviation Agreement Act 1952 (Cth).
11 J E Richardson and H W Poulton, op cit 68.
12 Civil Aviation Agreement Act 1957 (Cth).
13 Airlines Agreements Act 1961 (Cth).
14 1961 Airlines Agreement cl 10.
15 Cl 11.
16 Cl 12.
17 CI 13.
18 Airlines Agreements Act 1972 (Cth).
19 Airlines Agreements Act 1973 (Cth).
20 See S Brogden, op cit n 6, 208; J E Richardson and H W Poulton, op cit n 6, 275.
21 See the recent attack, for instance, in Kirby, M G, Domestic Airline Regulation (1981)Google Scholar and Forsyth, P, 'The Two Airline Policy: its results and future” (1979) 51 Australian Quarterly No 3, 62CrossRefGoogle Scholar.
22 Domestic Air Transport Policy Review (1979).
23 Ibid recommendation 21.
24 Ansett is now jointly owned by Thomas Nationwide Transport Ltd and News Ltd.
25 The text of the agreement is reproduced in the Holcroft Inquiry, vol 2, 484-508.
26 Ibid Vol I, para 1.56.
27 Ibid para 1.53.
28 See the Second Reading Speech, H Reps Deb 1980, Vol 119, 1539.
29 H Reps Deb 1981, Vol 122, 2838. In a news release of 4 January 1982 the ,terms of reference for the consultants study were announced. The consultant is required to report by 31 May 1982: (1982) 7 Commonwealth Record 8.
30 See the comments in Commonwealth v Australian Commonwealth Shipping Board (1926) 39 CLR 1 and A-G (Vic) v Commonwealth (1935) 52 CLR 533 on the constitutional limits on the conduct by the Commonwealth of commercial enterprises. While it is clear that the Commonwealth can engage in interstate trade and commerce (Australian Coastal Shipping Commission v O'Reilly (1962) 107 CLR 46) it cannot conduct activities in respect of which it has no legislative powers. This restriction would appear to apply whether the Commonwealth actually owns, or merely has an interest in, the corporation. See M Sexton and L W Maher, “Competitive Public Enterprises with Federal Government Participation: Legal and Constitutional Aspects” (1976) 50 AU 209.
31 Australian National Airlines Act 1945 (Cth) s 19H.
32 A-G (WA); ex rel Ansett Transport Industries (Operations) Pty Ltd v Australian National Airlines Commission (1976) 138 CLR 492.
33 Commonwealth Powers (Air Transport) Act 1950 (Qld) passed for the purposes of s 51(xxxvii) of the Constitution.
34 Above n 30. See also Kathleen Investments (Aust) Ltd v Australian Atomic Energy Agency (1977) 139 CLR 117.
35 Australian National Airlines Repeal Act 1981 (Cth).
36 See the Ansett submission to the Holcroft Inquiry, Vol 2, 355.
37 Domestic Air Transport Policy Review, Vol 1, 61, para 7.1.32.
38 This was the description of the existing situation made by the Holcroft Inquiry, Vol 1, 283, para 18.20.
39 See the statement as long ago as 1965 that: ''Today the question of ownership 1s a political anachronism” in D Corbett, Politics and the Airlines (1965) 332.
40 Above n 2. References to clauses are to the numbered clauses in the Agreement.
41 1981 Airlines Agreement, cl 8.
42 (1977) 139 CLR 54.
43 /bid 71-78.
44 [1951] 2 KB 476. See further, Hogg, PW, Liability of the Crown (1971) 134-140Google Scholar; Richardson, J E, ''The Executive Power of the Commonwealth” in L Zines (ed), Commentaries on the Australian Constitution (1977) 50, 75-80.Google Scholar
45 (1977) 139 CLR 54, 77.
46 [1951] 2 KB 476.
47 Ansett Transport Industries ,(Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54.
48 Airlines Agreement Act 1981 Schedule, cl 6(1) ( e).
49 (1977) 139 CLR 54 especially 70 per Mason J and 104 per Aickin J.
50 Airlines Agreement Act 1961 (Cth) s 7.
51 (1977) 139 CLR 54.
52 The dispute over the Port Hedland route began in February 1974 when Ansett challenged the grant of an airline licence to TAA to operate the Perth-PortHedland-Darwin service. It was November 1977 before TAA actually began to operate the service. The dispute led to hearings before the Arbitrator, a High Court challenge and a further hearing by the Arbitrator. (See the short history of the matter set out at the commencement of the Arbitrator's decision in reference no 69 in March 1980; reproduced as Appendix 3 to Australian Transport 1979-1980, the annual report of the Department of Transport.)
53 Airlines Agreement Act 1981 (Cth) s 7(2) and Schedule, cl 6(1)(e). Any proposed agreement to extend the trunk routes covered by the Agreement is required to be laid before each House of Parliament. The Commonwalth cannot enter into an agreement unless neither House has, within 15 sitting days of the proposed agreement being laid before that House, passed a resolution disapproving the proposed agreement.
54 1981 Airlines Agreement cl 6(2).
55 (1981) 6 Commonwealth Record, 1060.
56 “The New Two-Airline Situation” (1981) 60 Aircraft, No 11, 26. The Minister is unrepentant about this situation. He told Parliament on 22 October 1981 that the trunk routes were reserved primarily for Ansett and TAA and any third operator entering these routes could be given no guarantees: H Reps Deb 1981, Vol 122, 2363.
57 See the letter dated 20 March 1981 from the Western Australian Minister for Transport to the Federal Minister for Transport, the contents of which were widely reported. Copy supplied to the writer by Mr P Shack, MHR.
58 1981 Airlines Agreement cl 6(1) (c). There was no equivalent provision in the 1980 Agreement.
59 Airline Deregulation Act 1978 (US) Public Law 95-504, 92 Stat 1705, para 33, amending title IV of the Federal Aviation Act 1958 (US). The text of the relevant, provisions of the 1978 Act are reproduced in [1978] 1 US Aviation Reports 351, 378. But cf n 63.
60 Above n 33.
61 Graham v Paterson (1950) 81 CLR 1.
62 Under the State Transport Acts 1960-1965 (Qld), the Commissioner for Transport may set terms and conditions on intrastate air transport as considered necessary or expedient in the public interest including the number, routes and timetables of aircraft and fares.
63 Statement by the Minister for Transport, 2 March 1982 (1982) 7 Commonwealth Record 216. Other airlines, including East-West and Bush Pilots Airways (now Airlines of Queensland) have expressed interest in taking over the routes (1981) 60 Aircraft No 12, 27. See also answer to Question 265, H Reps Deb 1982 (19 August), 797.
64 Financial Review 17 June 1981.
65 Above n 5.
66 1961 Airlines Agreement cl 10.
67 The Trade Practices Act 1974 does not itself include any express exclusion.
68 Holcroft Inquiry, Vol 1, 83, para 6.98.
69 The 1979 Review recommended that fares be removed from the rationalisation provisions of the Airlines Agreement and that the Minister be given power to approve maximum and minimum fares, Domestic Air Transport Policy Review, Vol 1, 59 para 7.1.21.
70 Part II, ss 4-11 of the Act. The Minister has announced that the initial composition of the Committee will be Mr K F Wraith (Chairman), Dr D Zink and the Hon K Cairns. Sir Richard Kingsland has been appointed an acting member of the Committee for 12 months from 29 December 1981, pursuant to s 10 of the Act.
71 Independent Air Fares Committee Act 1981 (Cth) s 12.
72 s 35.
73 S 13. The first cost allocation review in relation to jet and F-27 services provided by Ansett (and its subsidiaries) and TAA was completed in August 1982.
74 Independent Air Fares Committee Act 1981 s 13(4).
75 S 14.
76 S 13(9).
77 As set out ins 14.
78 Independent Air Fares Committee Act s 21.
79 S 15.
80 S 15(11).
81 S 16.
82 S 17.
83 H Reps Deb 1981, Vol 122, 2835.
84 Independent Air Fares Committee Act s 17(4).
85 S 21(5).
86 S 24. However the list of determinations and decisions contained in the Commonwealth of Australia Gazette has provided little information in relation to the reasons for a decision. In relation to approval of discount fares no reason or supporting information is given. Eg Gazette No G9 of 2 March 1982, 3-6.
87 S 15(11) provides that the Committee shall have regard to determinations made after completion of cost allocation reviews, in conducting a major air fares review. There is no equivalent of s 24(2) which provides for determinations in relation to economy air fares to actually come into force on the giving of appropriate notice; nor is there any provision for enforcement of cost allocation determinations.
88 IndependentAir Fares Committee Acts 12(1){a)(ii).
89 See s 13 which prescribes the circumstances in which cost allocation reviews are to be conducted.
90 Independent Air Fares Committee Acts 12(2).
91 Commonwealth Constitution, s 51(xx) ands 122 respectively.
92 The previous provision controlling fares, Air Navigation Regulation 106, applied only to owners of aircraft using “any aerodrome or any air route or airway facility maintained or operated by the Minister pursuant to Air Navigation Regulation 82”.
93 S 92 provides that “trade, commerce, and intercourse among the States . . . shall be absolutely free”. See the comments of Barwick CJ in the Ansett case (1977) 139 CLR 54, 59: “the control of routes, timetables, fares and freights, apart from considerations of the safety of interstate air transport, might well be thought to be constitutionally denied to the Commonwealth”.
94 1981 Airlines Agreement cl 2.
95 Independent Air Fares Committee Act s 21.
96 So long as the legislation does not give the Tribunal power to enforce determinations in relation to prices, commentators have generally regarded such legislation as valid: see M Crommelin and Evans, G, “Explorations and Adventures with Commonwealth Powers” in G Evans (ed), Labor and the Constitution 1972-1975 (1977) 24, 27-29.Google Scholar
97 See the most recent case on s 92: Uerbergang v Australian Wheat Board (1980) 32 ALR 1. P H Lane, in The Australian Federal System (2nd ed 1979) 839 takes the view that Milk Board (NSW) v Metropolitan Cream Pty Ltd (1939) 62 CLR 116 and, to a lesser extent, James v The Commonwealth (1936) 55 CLR 1 “may be cited as dicta to support a general State price control of inter-State sales (but, of course, along with intra-state sales)”. Zines, L, The High Court and the Constitution (1981) 114-122Google Scholar discusses recent decisions on what amounts to regulation.
98 P J Parsons, “Prices Justification in Australia: the First Twenty Months” (1975) 6 FL Rev 367, 375.
99 (1955) 93 CLR 127, 171 (per Dixon CJ, McTiernan and Webb JI). See J E Richardson, “Aviation Law in Australia” (1965) 1 FL Rev 242, 261.
1 [1961] VR 343, 356.
2 H Reps Deb 1981, Vol 122, 1849. The announcement related principally to the sale of terminal facilities but reasserted the Government's commitment to its existing policy of sale of regional airports.
3 Above p 63.
4 Holcroft Inquiry, Vol 1, 282-283, para 18.16.
5 Ibid 242, para 16.6.
6 Richardson, J E, “Aviation Law in Australia” (1965) 1 FL Rev 242, 271Google Scholar. See also H W Poulton, “Legal and Policy Aspects of Air Transport in Australia” (1959) 26 Jnl Air Law and Commerce 13, 31-35.
7 R v Anderson; ex parte lpee-Air Pty Ltd (1965) 113 CLR 177. This decision was followed in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54.
8 R v Anderson; ex parte lpee-Air Pty Ltd (1965) 113 CLR 177, 196.
9 The Domestic Air Transport Review in 1979 recommended that the Commonwealth continue to use customs controls to maintain the two airline policy. Vol I, 8.
10 New ss 16 and 19 inserted by s 9 of the Airlines Equipment Amendment Act 1981 (Cth).
11 New ss 17 and 21 inserted bys 9 of the Airlines Equipment Amendment Act 1981.
12 (1976) 136 CLR 1, 19 per Mason J: “A law which absolutely or conditionally prohibits exportation of goods is a law that operates on that topic”. As to the possible implications of this view in relation to the imposition of conditions on an activity after the Commonwealth controlled activity eg import, has been completed, see G Rumble, “S 51(xxxix) of the Constitution and the Federal Distribution of Power” (1982) 13 FL Rev 182, 186.
13 (1966) 115 CLR 418.
14 (1965) 113 CLR 177. See above n 7 and accompanying text.
15 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR54.
16 For a detailed discussion of what sorts of conditions amount to regulation and are permitted under s 92 see L Zines, op cit n 97. The conditions imposed by the Airlines Equipment Act directly on trading operations seem most unlikely to be upheld if challenged on s 92 grounds.
17 Airlines Agreement Act 1981 s 8.
18 1981 Airlines Agreement, cl 9 (1).
19 Cl 7(4).
20 Cl9(3).
21 Cl 20(2). During the currency of the earlier agreements the Commonwealth provided substantial loan guarantees to both TAA and Ansett. The most recent legislation is the Airlines Equipment (Loan Guarantee) Act 1981 (Cth) which enabled Ansett to purchase a number of new Boeing aircraft.
22 1981 Airlines Agreement, cl 15.
23 Holcroft Inquiry, Vol 2, 409.
24 H Reps Deb 1978, Vol 111, 1698.
25 (1981) 6 Commonwealth Record 1727.
26 1981 Airlines Agreement, cl 15(3).
27 CI 11.
28 Cl 20(1).
29 Cl 22.
30 H Reps Deb 1981, Vol 122, 3013-3032.
31 Ibid.
32 1981 Airlines Agreement, cl 22(3).