After Rex’s failure, here is the answer to Australia’s airline competition problem
It would be in the national interest – and Qantas’ – for the government to create a successful duopoly by biting the bullet on foreign ownership of Virgin.
The failure of Rex in Australia’s aviation market is just a sideshow to the biggest issue of maintaining an effective duopoly in the Australian market. Nonetheless, it could trigger the difficult decisions that the government will finally have to make.
It might seem strange to talk about maintaining a duopoly when questions are being raised about whether there is space for three airlines in the market (which, under the right circumstances, I believe there is). But for as long as there has been commercial domestic aviation in Australia, that has been the underlying strategy governments have sought to achieve.
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Peter Harbison is a aviation analyst. He founded CAPA – Centre for Aviation and is author of “Alan Joyce and Qantas. The trials and transformation of an Australian icon.“
