CABINET MINUTE DECISION NO.

BRISBANE, 007'4-

SUBJECT:. ___Air______Services to Weipa and Horn Island . ______

------(Submission No·----=~"--'t;J""'-"-1-7--"//.0L..=__ a.m. 50Copies Received at coffl&:rAI ~ {rol? H!?/11/LL.) e ;opies Made CIRCULATION DETAILS

Premier's f' ( 1 MR GOSS 21 ~opy of relevant I :(;?, I "\miccinn !:ltt~t"'ht:l d - 2 MR BURNS 22 Housing & LG Police & Emerg. 3 MR MACKENROTH 23 Services

( 11 4 MR DE LACY 24 Treasury 0PY of relevant 1Sui )ffij~~inn !:!tt~r-h"·~ Tourism, Sport 5 MR GIBBS 25 & Racing ~ <" ,... 6 MR HAMILL µOpy of relevant 26 Transport uopy of relevant , ~~I hmi~c-:-._ . . ~ ~._.,. L..--i~-·- - - r ClLla\;J II: 'U ..,n ,,..,..,1v1 I d.llaCne d - 7 MR WARBURTON 27 DEVET & IR Resource Indust 8 MR VAUGHAN I 28 - 9 MR CASEY 29 Primary Indust 10 MR McELLIGOTT 30 Health Education 11 MR BRADDY 31

Env & Heritage 12 MR COMBEN I 32

13 MR WELLS 33 Attorney-Gener< 1 Fam Serv & /:,. 14 MS WARNER 34 ""''""opy of relevant Ab&Is Affrs SIi . I hn-,inr-i-- _ , d Justice and - I --"'"' I Cllld\;( It::: 15 MR MI LLINER 35 I Correct Serv I 16 MR McLEAN 36 Admin Services Manuf & Commer< e 17 MR SMITH 37 Managemen · 18 MR EATON 38 Land PSMC 19 GOVERNOR 39

20 Master File 40 Department of Transport

From the office of the Director-General Capital Hill Building, Cm. George and Mary Streets, . Telephone: (07) 237 9801 International: + 61 7 237 9801 Facsimile: (07) 237 9648 International: + 61 7 237 9648

Postal Address: G.PO. Box 1549 Brisbane Queensland 4001

The Secretary of Cabinet e 13th Floor Executive Building 100 George Street - BRISBANE 4000 Dear Mr Tait

Enclosed are 50 copies of a Cabinet Submission entitled:­

Air Services to Weipa and Horn Island

A total of 52 copies of the Submission have been produced.

- I have arranged distribution of the submission:-

Copy No. Department/Branch Officer

1-50 Cabinet Secretariat S. Tait - 51 and 52 CLLO w. R:di~ For further information please contact me on 2371953. (:ii?:! CABINET LEGISLATION AND LIAISON OFFICER

16 October 1990 DEPARTMENT OF THE PREMIER, ECONOMIC AND TRADE DEVELOPMENT

CABINET BRIEFING NOTE

Ref: W.Fischer:TM Tel: 44719 Submissio Date: 18.10.90.

1. This submission is a revision of the submission on Air Services to Weipa and Horn Island which Cabinet on 8th October, 1990, agreed be withdrawn.

2 . As on the previous occasion, this submission recommends that the -Weipa and Cairns-Horn Island air routes be de-regulated from the end of 1990. a 3. The basis for the recommendation is that these routes are the only routes in the State which are still regulated (except for the subsidised far-western routes) and the expected outcome is more frequent and more customer-oriented services. The size of aircraft may however, reduce. Travel times for all of the likely aircraft types are effectively little different, however.

4 . Additional information provided in this submission includes:

Comalco strongly oppose the opening up of the Cairns-Weipa route (paras 43-49) and have indicated that, if it loses the exclusive licensing arrangements:

(a) it will pursue the matter vigorously at a political level. ) 2 •

(b) it fears industrial action if air services, particularly aircraft type fall, below existing level.

(c) it is likely to enter into commercial agreements which would limit the effect of deregulation (it controls 50-70% of the Cairns-Weipa business).

The granting of exclusive rights over the Cairns-Horn Island route to Torres Air, is supported by Island Co-ordinating Committee which opposes total deregulation and seeks protection for Torres Air. As it is at the developmental phase and serious doubt exists as to its ability to provide a viable and effective service, Torres Air has not been recommended. The Department of Family Services and Aboriginal and Islander Affairs also -- supports the Torres Air proposal. 5. The Department of Transport appears to have thoroughly e-. examined the situation. 6. No objection to proposal.

- - Copy No. 20

C O N F I D E N T I A L

C A B I N E T M I N U T E Brisbane, 22 October 1990 Decision No. 00784 -Submission No. 00740 TITLE: Air Services to Weipa and Horn Island.

- CABINET decided:- !. That, in this instance, it does not favour deregulation. 2. That Cabinet: (a) Reaffirms its desire to obtain the best quality and frequency of services for the region . (b) Believes that 2(a) above can best be achieved by calling for expressions of interest for a total package of services which would specify types of aircraft, frequency of services and proposed timetables of service. That 1 and 2 above be discussed with relevant unions represented in the region to ascertain their views. 4. That 2 and 3 above be expedited by the Honourable the Minister for Transport and Minister Assisting the Premier on Economic and Trade Development. CIRCULATION: Im lementation Res onsibilit Department of Transport an copy to Minister. Departmental Records Department of the Premier, Economic and Trade Development. Treasury Department. Department of Family Services and Aboriginal and Islander Affairs. Perusal and Return All other Ministers and Chief Executives.

Certified True Copy

Secretar CABINET-IN-CONFIDENCE

SECURITY CLASSIFICATION "C" SUBMISSION 740 CABINET SUBMISSION COPY NO. 20

COVERSHEET

TITLE

Air Services to Weipa and Horn Island. - MINISfER Minister for Transport Minister Assisting the Premier on Economic and Trade Development.

- ISSUE Air services between Cairns and Weipa and between Cairns and Horn Island (Thursday Island) are currently operated by Australian Regional Airlines (Queensland) Pty Ltd under the authority of an exclusive State Air License which expires on 31 December 1990.

The Cairns - Weipa and Cairns - Horn Island routes are the only Queensland air routes, apart from the subsidised western air routes, which are not subject to open - competition. With the current license expiring at the end of this year, it is an appropriate time to consider whether or not regulation of these routes should continue.

- If regulation is to continue, new licensing rights for the routes for 1991 and beyond should be awarded now, to allow sufficient time for any proposed changes to be put in place by 1 January 1991 .

Following an assessment by the Department of Transport it is considered that the exclusion from the "open skies" policy of the Cairns - Weipa and Cairns - Horn Island air routes is no longer appropriate.

OBJECTIVE OF SUBMISSION

To establish policy with regard to the Cairns - Weipa and Cairns - Horn Island air routes for implementation from 1 January 1991.

URGENCY

An urgent decision is required to allow the aviation industry and affected communities to plan and implement changes by 1 January 1991.

This document Is the property of the Government that created It and Is held In trust by the Public Service. u may not be copied or reproduced. For further Information contact the Cabinet Office. t:Ol"R ,NT CAB IN ET-IN-CONFIDENCE CABINET-IN-CONFIDENCE

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CONSULTATION

Consultation has taken place with aviation industry representatives, Comalco Aluminium Ltd, Torres Island Co-ordinating Council (ICC), the Department of Family Services and Aboriginal and Islander Affairs and the Member for Cook.

- RESULTS OF CONSULTATION All parties generally agreed that if there was more than one operator for either route, there was a risk that the quality of service, particu·larly with regard to - aircraft type, could be downgraded. Individual airline operators indicated that they would be prepared to compete on the routes although they would naturally prefer to have exclusive rights to either or preferably both of the routes.

Comalco strongly oppose the opening up of the Cairns - Weipa route. Comalco are of the view the Cairns - Weipa route will be better served in the long run if only one operator is licensed for the route and that the isolated nature of Weipa - demands special consideration to ensure a suitable level of service. The ICC and the Department of Family Services and Aboriginal and Islander Affairs are concerned that deregulation of the Cairns - Horn Island route could - result in a reduction in the quality of air services to the Torres Strait. The Member for Cook has been consulted on this proposal and he is in agreement with the recommendation. ·

FINANCIAL CONSIDERATIONS

There are no financial implications for the Government in this proposal.

PUBLIC PRESENTATION

A draft media release is attached.

This document Is the property of the Government that created It and Is held In trust by the Public Service. It may not be copied or reproduced. For further Information contact the Cabinet ottlce.

CABINET-IN-CONFIDENCE CABINET-IN-CONFIDENCE -3-

RECOMMENDATION

It is recommended that the exemption of the Cairns - Weipa and Cairns - Horn Island air routes from the "open skies" policy be discontinued from 1 January 1991. - ..... /..~?~ ...... - Pat Comben MLA Actin M"nister for Trans ort 10frc - -

This document Is the property of the Government that created It and Is held In trust by the Public Service. ll may not be copied or reproduced. For further Information contact the Cabinet Office.

~0'1'/f,NT CABINET-IN-CONFIDENCE - 4 -

SECURITY CLASSIFICATION "C"

CABINET SUBMI

BODY OF SUBMISSION

BACKGROUND

1. Australian Regional Airlines (Qld) Pty Ltd has exclusive State licensing rights to operate regular scheduled air services between Cairns and Weipa - and between Cairns and Horn Island (Thursday Island). 2. This license which was recently transferred from Australian Airlines, expires on 31 December 1990.

- 3. The Cairns - Weipa and Cairns - Horn Island routes are the only Queensland air routes, apart from the subsidised western air routes, which are not subject to open competition.

4. These routes were excluded from the "open skies" policy because they are vital transport links and it was considered that they should remain regulated until the effects of deregulation in other areas could be evaluated. Currently Australian Regional Airlines operate Fokker - Friendship F27 aircraft on these routes. 5. The services provided by Australian Regional Airlines are provided without Government subsidy. - 6. In April 1988 Cabinet decided:- to exempt the Cairns - Weipa and Cairns - Horn Island routes from the "open skies" policy until 31 December 1990;

to grant exclusive licensing rights to Australian Airlines then trading as , until 31 December 1990;

that in late 1990 a review be undertaken for Cabinet's consideration as to whether or not the routes in question should continue to be exempted from the "open skies" policy.

This document Is the property of the Government that created ii and Is held In trust by the Public Service. It may not be copied or reproduced. For further Information contact the Cabinet Office. t:OPIIINT CABINET-IN-CONFIDENCE lJI-\Oll'tC 1- 11't ~\..,Vl'U7Ul:.l'tv~ ------

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7. A review of the air service requirements of Weipa and Torres Strait has recently been carried out by the Department of Transport. As part of this review, expressions of interest in operating air services over the Cairns - Weipa and Cairns- Horn Island routes have been obtained from various airlines, including the existing operator, Australian Regional Airlines. The outcomes of this review are detailed below.

- OBJECTIVE

8. The objective of this submission is to determine policy as to whether the Cairns - Weipa and Cairns - Horn Island air routes should be opened to - competition.

ISSlIBS

9. An analysis of the expressions of interest received gives a good indication of the level of service that can be expected under continued regulation.

10. Proposals were submitted for the operation of services over both routes as a combined operation and over either or both of the routes on a single - route, stand alone basis. 11. A brief summary of the proposals received is at Attachment 1.

12. All proposals received, whether for both routes or for one route only, - requested exclusive licensing rights over the proposed routes.

13. Proposals received were examined and compared on the basis of:-

Aircraft type; Frequency of service; Availability of back up aircraft; Proposed fares; Experience of operator making the submission; and Size of existing operation.

14. The proposal submitted by Ansett for F28 jet services between Cairns and Weipa is clearly superior to the other proposals as far as Weipa is concerned.

15. If the Ansett proposal was accepted and Ansett were awarded exclusive licensing rights over the Cairns - Weipa route, a separate arrangement would have to be considered for the Cairns - Horn Island route.

This document Is the property of the Government that created it and Is held In trust by the Public Service. It may not be copied or reproduced. For further Information contact the Cabinet Office.

CABINET-IN-CONFIDENCE - 6 -

16. It is considered that the best proposal for the Cairns - Horn Island route, on a one route only basis, is that of the existing operator, Australian Regional Airlines.

17. On the basis of the above considerations, continued regulation would result in a daily F28 jet service to Weipa and a daily, or better, Dash 8 service to - Horn Island. 18. Because these air routes have always been regulated, there is no certainty as to the level of service that would be provided under deregulation. - 19. In other areas of the State, deregulation has in some instances resulted in a lower standard of aircraft being operated but has generally resulted in increases in frequency, seat availability, direct services and same day return flights. In addition, there has been some fare discounting and a general reluctance to increase fares.

20. Given the experience on other routes it is, therefore, possible that deregulation of the Cairns - Weipa - Horn Island routes could result in the lowering of the quality of aircraft used on the routes. However, deregulation is almost certain t o result in an increased frequency of - services, greater seat availability, more direct services to Horn Island and possibly, discounted air fares.

21. Although all interested parties have submitted proposals on the basis of exclusive licensing rights, Australian Regional Airlines, Flight West Airlines Norfolk Airlines and Torres Air have indicated a willingness to compete over the Cairns - Weipa and/or Cairns - Horn Island routes using the type of aircraft nominated in their proposals. These airlines have suggested, however, that only one operator of this type of aircraft could survive on the C airns - Weipa - Horn Island routes and that the frequency provided by that operator would be less than under an exclusive arrangement because of competition from operators of smaller aircraft.

22. Based on the above and the experience of deregulation in other areas it is predicted that the Cairns - Weipa and Cairns - Horn Island routes would receive good quality air services in terms of frequency, number of direct services, and seat availability under deregulation.

This document Is the property of the Government that created II and Is held In trust by the Public Service. fl may not be copied or reproduced. For further Information contact the Cabinet Office.

COl"'lf INT CABINET-IN-CONFIDENCE - 7 -

23. Thursday Island residents and other travellers between Cairns and Horn Island have shown by their past actions that they are prepared to fly in smaller aircraft if it means they can fly direct and when they want to, rather than fly via Bamaga and Weipa, when they can get a seat on the existing Australian Regional Airlines service. Deregulation, if it results in greater frequency and more direct services is likely to be preferred by - regular travellers on this route. 24. Travellers to and from Horn Island have been able to take the light aircraft direct service option by using the, at times, freely available illegal services - which have been common in the far north. 25. There have been many illegal operators (in terms of the licensing provisions of the State Transport Act) in the Cape York, lower Gulf and Torres Strait areas over the years and because of the isolation of these areas it has been difficult to take action to stop these activities.

26. It should be noted that all other air routes in Queensland with the exception of the subsidised western routes, are deregulated. Additionally, from 1 November 1990 the Federal Government will deregulate the nations airline industry and the major airlines will be in open competition with - each other for the first time.

27. Airlines seeking exclusive licensing rights over the Cairns - Weipa and/or Cairns - Horn Island air routes are seeking a decision -from Government - that will, in effect, give them, directly or indirectly, an advantage over their competitors.

28. Currently, exclusive rights to these routes are held by Australian Regional Airlines a subsidiary of Australian Airlines, and the revenue from on-carriage between Cairns and southern ports, generated by Weipa (estimated at over 1 million dollars per annum), flows to Australian Airlines.

29. If the Ansett proposal is accepted, Ansett would gain most of the We ipa on-carriage from Australian Airlines.

This document Is the property of the Government that created It and Is held In trust by the Public Service. 11 may not be copied or reproduced. For further Information contact the Cabinet Ottlce.

COP/I/NT CAB IN ET-IN-CONFIDENCE - 8 -

30. There is also the strong possibility that Weipa will undergo significant development in the next five years and that this development will generate significant growth in air travel, not only between Cairns and Weipa but between Weipa and southern capital cities. The granting of exclusive rights to either of the major airlines or a subsidiary of one of them, would tie up this increased traffic for that major airline giving it a significant advantage over its competitors.

- 31. In addition, the Ansett proposal provides a corner-stone for a significant F28 jet operation in Cairns which the airline says it cannot consider without exclusive rights over the Cairns - Weipa route. An F28 operation out of Cairns would have many advantages for Ansett giving it a - competitive advantage over other airlines on lower density jet routes such as Cairns - , Cairns - Whitsunday (Proserpine, Hamilton Island) and Cairns - Mount Isa - Alice Springs.

32. The establishment of an F28 operation in Cairns may also effect the operations of some regional airlines. The Cairns - Townsville and Cairns - Mount Isa routes are two routes serviced by regional airlines, which Ansett has indicated it would service with F28 jets, if they are awarded exclusive - rights to the Cairns - Weipa route. 33. The awarding of exclusive rights to Ansett over the Cairns - Weipa route would therefore give Ansett an advantage over its major competitors in an otherwise deregulated market and might effect the existing operations of - regional airlines who are also operating in a deregulated market. 34. Likewise, the continuation of the current _Australian Regional Airlines arrangement would, of course, give Australian Airlines an advantage over its competitors in relation to on-carriage and as well give Australian Regional Airlines an advantage over its regional competitors.

35. As all other Queensland air routes, except the subsidised western routes, are deregulated, irrespective of route density, the possibility of a downgrading of aircraft type is not considered to be a valid reason why the Cairns - Weipa and Cairns - Horn Island routes should be treated any differently from the many other medium to low density routes in Queensland which cannot support larger aircraft, without regulation.

36. In view of the above it is considered that the exclusion from the "open skies" policy of the Cairns - Weipa and Cairns - Horn Island air routes is no longer appropriate.

This document is the property of the Government that created it and Is held in trust by the Publlc Service. It may not be copied or reproduced. For further Information contact the Cabinet Office. t:OPll,N T CABINET-IN-CONFIDENCE CABINt:: 1-IN-COrU·ILJENC

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URGENCY

37. An urgent decision is required to allow the aviation industry and affected communities to plan and implement changes by 1 January 1991.

CONSULTATION

- 38. As part of the abovementioned examination of expressions of interest, airline representatives were interviewed regarding their proposals and on other matters relating to the region's air services.

- 39. Extensive discussions have been held with Comalco Aluminium Ltd (in relation to Weipa) and the Torres Island Co-ordinating Council (in relation to Horn Island).

40. The Member for Cook and the Department of Family Services and Aboriginal and Island Affairs have also been consulted regarding the Cape York air services.

41. Information provided to operators who registered interest in submitting a - proposal to provide services over Cairns - Weipa - Horn Island routes included advice to the operators that Comalco and representatives of the Torres Strait Island Communities would be consulted in this regard and that details of proposals received would be provided to these parties.

- RESULTS OF CONSULTATION

42. Individual airline operators indicated that · they would be prepared to compete on the route although they would naturally prefer to have exclusive rights to either or preferably both of the routes.

43. In accordance with the commitment to consult with Comalco that company has been advised of details of expressions of interest received and has subsequently had independent discussions with a number of the operators concerned.

44. Comalco has advised that following careful consideration of the various proposals and discussions and correspondence with Ansett, they have concluded that Ansett is the preferred airline to provide the type of service required by Comalco and the Weipa Community.

This document Is the property of the Government that created it and Is held In trust by the Public Service. 11 may not be copied or reproduced. For further Information contact the Cabinet Office.

CABINET-IN-CONFIDENCE CABINET-IN-CONFIDENCE

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45. Comalco strongly opposes the deregulation of the Cairns - Weipa route. It claims that the isolated nature of the town and the lack of alternative transport demand the provision of a high quality air service which it is claimed will not eventuate under deregulation. Comalco also indicated that any future development at Weipa, in terms of a proposed smelter, made it vital that reliable high quality air services remain in place. The company also indicated that it contributes significantly to the economy of - Queensland and in particular, via Royalties, to the Queensland Government. Comal-co has indicated that, if it loses the exclusive licensing arrangements, it will pursue the matter vigorously at the political level.

- 46. It is also understood that Comalco have an understanding with Weipa unions that a particular level of air service will be provided between Cairns and Wei pa and that the company fears industrial action if air services, particularly with regard to aircraft type, fall below the existing level. This obligation is one purely for the company to meet.

47. Comalco's concerns are acknowledged, however; it is considered inappropriate to continue restricted licensing arrangements purely to protect the commercial arrangements of the company, particularly when - the proposal involves an exclusive license to Ansett for the next 5 years. 48. Comalco has expressed the view that it is not opposed to competition on the r·oute but would rather that the matter be reviewed in two years time and thereafter, at two year intervals to ensure the provision of appropriate - quality aircraft. Such an arrangement is not conducive to the policy objectives of allowing free competition on Queensland's non-subsidised air routes. It is understood that other operators are willing to, at least initially, compete on the route with aircraft of Dash 8 quality.

49. It is also believed that in the event of deregulation, Comalco, who control 50 - 75 percent of the Cairns - Weipa business would enter into commercial agreements which would limit the effect of deregulation on that route through the stipulation of aircraft type and quality.

This document Is the property of the Government that created It and Is held In trust by the Public Service. It may not be copied or reproduced. For further Information contact the Cabinet Office.

C'O.Pll/NT CABINET-IN-CONFIDENCE - 11 -

50. The Island Co-ordinating Council supports the Torres Air proposal for Cairns - Horn Island air services and gave the following reasons for doing so:-

The Torres air proposal is the best in terms of frequency and - viability; ·Torres Air will be an Islander owned airline and its profits will be returned to the islands;

The Torres Air profits can be used to improve aviation facilities on the islands including the air strips which are badly in need of repair;

As an Islander owned airline Torres Air will be more receptive than other airlines to the needs of the island communities;

The Cairns - Horn Island route is crucial to the success of Torres Air services within the Strait;

Torres Air proposes to train Islanders as aircraft engineers, pilots - and in other facets of the industry. This social benefit will be lost if Torres Air was not successful.

51. The Department of Family Services and Aboriginal and Island Affairs also - supports the Torres Air proposal on the basis of the possible social benefits which might accrue to the Torres Strait Island communities.

52. The Island Co-ordinating Council is opposed to total deregulation and seeks protection for Torres Air over the Cairns - Horn Island route.

53. Torres Air is, at this st age, still in the development phase and serious doubts exist as to its ability to provide a viable and effective air service. Given these doubts, the granting to Torres Air of exclusive rights over the Cairns - Horn Island route is not recommended.

54. Both the Island Co-ordinating Council and the Department of Family Services and Aboriginal and Islander Affairs are concerned that Cairns - Horn Island air services may deteriorate as a result of deregulation.

55. The Member for Cook has been consulted on this proposal and he has ne objection to the recommendation to no longer exempt the Cape York services from the "open skies" policy.

This document Is the property of the Government that created it and is held in trust by the Public Service. It may not be copied or reproduced. For further information contact the Cabinet Office.

COP A/NT CABINET-IN-CONFIDENCE CAB

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FINANCIAL CONSIDERATIONS

56. This matter does not have any financial implications for Government.

PUBLIC PRESENTATION - 57. A draft media release on this matter is attached. RECOMMENDATION

58. It is recommended that the exemption of the Cairns - Weipa and Cairns - - Horn Island air routes from the "open skies" policy be discontinued from 1 January 1991. - -

This document Is the property of the Government that created it and Is held In trust by the Public Service. It may not be copied or reproduced. For further Information contact the Cabinet Office. t::O.l'lf/NT CAB IN ET-IN-CONFIDENCE ATTACHMENT 1

EXPRESSIONS OF INTEREST

1 2 Operator Routes Aircraft

Ansett CNS - WEI Only Fokker F28 Charter Cruise Air Both Routes Fokker F27 Brasilia

National Jet Systems Both Routes CASA 235

- Australian Regional Both Routes Dash 8 Airlines CNS - WEI Only CNS - HID On ly - Flight Wes t Airlines Both Routes Dash 8 / Brasilia Norfolk Airlines Both Routes Dash 8 CNS-WEI On ly CNS - HID On ly

Torres Air CNS-HID On ly Grumman G 159 Air North Both Routes Dash 8

- Note 1. CN S = Cairns WE I = Weipa - HID = Horn Island Note 2. Features o f the proposed ·aircraft type are contained a t ' Attachment 2 . N

PROPOSED AIRCRAFT DETAILS

AIRCRAFT TYPE POWER PASSENGER CRUISING PRESSURISED GALLEY TOILET FLIGHT FLIGHT TIMES COMMENTS CAPACITY SPEED ATTENDANT CNS-WEI CNS-HID

Fokker F28 Jet 65 340 Knots Yes Yes Yes Yes 1hr 15min N/A Fokker F27 Turbo 40 220 Knots Yes Yes Yes Yes 1hr 45min 2hr 15min Old technology Prop. aircraft. Requires regular major overhauls. Boeing Canada- Turbo 36 240 Knots Yes Yes Yes Yes 1hr 35min 2hr 05min Dash 8 Prop. Embraer Turbo 30 300 Knots Yes Yes Yes Yes 1hr 25min 1hr 40min Brasilia Prop.

Grumman G159 Turbo 24 280 Knots Yes Yes Yes Yes N/A 1hr 45min Old technology Prop. aircraft. Not used in Aust. for regular scheduled services. Casa 235 Turbo 40 240 Knots Yes Yes Yes Yes 1hr 35min 2hr 05min Not currently operated in this country.

- - DRAFT MEDIA STATEMENT

To Cabinet /1990

DEREGULATION OF CAIRNS - WEIPA AND CAIRNS - HORN ISLAND AIR ROUTES

Transport Minister David Hamill today announced deregulation of the Cairns - Weipa and Cairns - Horn Island air routes from 1 January 1991.

- Air services over these routes are currently operated by Australian Regional Airlines under an exclusive license which expires on 31 December 1990.

The Cairns - Weipa and Cairns - Horn · Isla nd routes are the e only Queensland air routes apart from subsidised Western Queensland air routes which are not currently subject to open competition.

These routes were excluded from the Queensland Government's "open skies" policy, which was introduced in 1987, because they are vital transport links and it was considered at that time that they should remain regulated until the effects of deregulation in other areas could be evaluated.

"The "open skies" policy has now been in place for over three - years and it has be en established that where competition has been introduced as a result of deregulation, travellers have benefited from increased flight frequency, better seat availability and some fare discounting. In some areas, flight times have also been reduced as a result of smaller but faster - aircraft being used or because more direct flights are being offered" Mr. Hamill said. ·

"In view of the benefits that have come from deregulation in other areas the continued exclusion of the Cairns - Weipa and Cairns - Horn Island routes from the "open skies" policy is considered to be no longer warranted" the Minister said.

Australian Regional Airlines will continue to have exclusive rights to the routes until 31 December 1990.

"From 1 January 1991 other operators will be licensed to operate over the routes provided they meet the "open skies" qualitative criteria of safety and reliability, character and repute, adequate insurance, operational capacity and financial capacity," Mr. Hamill said.

Information: Mick Mcshea (Transport House) 253 4799 Compiled by: John McReynolds (Transport House) Telephone: 253 4812