The Qantas-Qatar debacle has exposed a series of long-running problems for Australia’s aviation industry.

While some critics deplore Paul Keating’s privatisation of Qantas as explanation for the airline’s current failures, the continuing dominance of one airline in Australia has more to do with the legacy of government intervention in what once was a thriving free market of aviation services.

The history of aviation in Australia is inherently bound up in our sense of national identity and of a pioneering spirit exploring this wide brown land.

Plane travel connected communities across our continent and to the world when our geography made ships, road, and rail too slow.

Aviators such as Charles Kingsford-Smith and Nancy Bird Walton are national legends for their bravery and ability to conquer Australia’s tyranny of distance.

The aviation industry delivered Australia from this tyranny and such was its popularity that prior to World War II, Australia was a world leader.

Despite our small population of just seven million people Australia was host to 16 airlines, with the industry expanding at double the pace of global averages; Australia also ranked sixth in the world in terms of the number of air miles travelled.

But with the advent of World War II, the Australian aviation industry was ordered to help the war effort.

At the close of World War II Labor Prime Minister Ben Chifley – enamoured with nationalised industries such as banking and railways – decided Australia’s aviation industry would not return to its free market conditions.

But rather his government would establish the Australian National Airlines Commission to run a government-owned domestic monopoly airline Trans Australia Airlines (TAA).

Key figures in the airline industry such as owner of the private airline Australian National Airways (ANA) Sir Ivan Holyman and aviatrix Nancy Bird Walton were appalled by the Chifley Government’s attempt to nationalise a once thriving industry and Holyman challenged the legislation in the High Court.

In a victory of sorts for private industry, the High Court determined that while the Chifley Government was allowed to operate an airline through a statutory authority, it couldn’t do so as a monopoly.

The Government-owned TAA would have to compete with ANA.

TAA proved a ferocious competitor and backed by favourable government arrangements deliberately not made available to the private sector it drove ANA to the point of bankruptcy.

Disappointingly, when the Menzies Government was elected in 1949, it did not return the airline industry to its free-market pre-WWII conditions.

Rather, it adopted the Two Airline Policy with the justification that a “free for all” set of market conditions would compromise airline safety.

This policy, with government-owned TAA and privately run Ansett (which merged with ANA in 1957) competing, remained in place until 1990.

Despite the open skies deregulation in 1990 and the subsequent privatisation of Qantas, Australia continues to be ill-served by an oligopoly system of air services at a domestic level and a perception that the fortunes of Qantas, as the national carrier, should be prioritised over the Australian public’s access to cheaper fares and better service levels.

The vestiges of the Two Airline Policy live on in the form of mirroring of interstate routes and frequencies by the two major airlines, meaning consumer choice is minimal.

Government regulation of this industry has begot even more government regulation.

The lack of transparency and obfuscation around recent government decisions and impression that the vested interests of big business trump good public policy all leave a bitter taste.

Surely it’s time to put the consumer first, not Qantas.

Written by Georgina Downer. Originally published on Skynews on 10 September 2023.