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The Two Airlines Policy (or Two Airlines Agreement) was a policy of the
Government of Australia The Australian Government, also known as the Commonwealth Government or simply as the federal government, is the national Executive (government), executive government of Australia, a federalism, federal Parliamentary system, parliamentary con ...
from the late 1940s to the 1990s. Under the policy, only two
airline An airline is a company that provides civil aviation, air transport services for traveling passengers or freight (cargo). Airlines use aircraft to supply these services and may form partnerships or Airline alliance, alliances with other airlines ...
s were allowed to operate flights between
state State most commonly refers to: * State (polity), a centralized political organization that regulates law and society within a territory **Sovereign state, a sovereign polity in international law, commonly referred to as a country **Nation state, a ...
capital cities and between capitals and nominated regional centres. The Two Airlines Policy was a legal barrier to new entrants to the Australian aviation market. It restricted intercapital services to the two major domestic carriers. This anti-competitive arrangement ensured that they carried approximately the same number of passengers, charged the same fares and had similar fleet sizes and equipment. For most of the period of the policy, the two airlines were the privately owned Ansett Airlines and the government-owned Trans Australia Airlines. Though persisting for some decades, the policy finally fell into abeyance with
airline deregulation Airline deregulation is the process of removing government-imposed entry and price restrictions on airlines affecting, in particular, the carriers permitted to serve specific routes. In the United States, the term usually applies to the Airline D ...
in Australia in 1990.


Beginnings

The First and
Second The second (symbol: s) is a unit of time derived from the division of the day first into 24 hours, then to 60 minutes, and finally to 60 seconds each (24 × 60 × 60 = 86400). The current and formal definition in the International System of U ...
Chifley (
Labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the labour ...
) ministries established Trans Australia Airlines (TAA) in 1946, after passing legislation establishing TAA in 1945. TAA was initially intended to be a monopoly national carrier, subsuming all the routes flown by
Australian National Airways Australian National Airways (ANA) was Australia's predominant aerial carrier from the mid-1930s to the early 1950s. The Holyman's Airways period On 19 March 1932 Flinders Island Airways began a regular aerial service using the Desoutter Mk.I ...
and any other non-government airlines. This was successfully challenged in two High Court cases.


Formal establishment

The Two Airlines Policy was formulated by the Fifth Menzies Ministry with the ''Civil Aviation Agreement Act 1952'' taking effect. The policy took practical effect when Ansett purchased the failing Australian National Airways in 1957, resulting in it being the only competitor for the government-owned TAA. While smaller regional airlines were free to operate flights between regional airports and between cities and regional centres, the policy allowed only two airlines to operate flights between major cities in Australia. This led to some minor intrusions by other airlines, for example in 1970, East-West Airlines briefly operated between
Sydney Sydney is the capital city of the States and territories of Australia, state of New South Wales and the List of cities in Australia by population, most populous city in Australia. Located on Australia's east coast, the metropolis surrounds Syd ...
and
Melbourne Melbourne ( , ; Boonwurrung language, Boonwurrung/ or ) is the List of Australian capital cities, capital and List of cities in Australia by population, most populous city of the States and territories of Australia, Australian state of Victori ...
by linking a longstanding Sydney to
Albury Albury (; ) is a major regional city that is located in the Murray River, Murray region of New South Wales, Australia. It is part of the twin city of Albury–Wodonga, Albury-Wodonga and is located on the Hume Highway and the northern side of ...
service with a newly added Albury to Melbourne sector, thereby including a nominal number of through passengers at lower than normal fares. Another aspect of the policy was that scheduled flights on the same routes would take off about five minutes apart, with Ansett taking off before TAA.


Continuation of the Duopoly

The failing Australian National Airways was taken over in 1957 by Ansett. Subsequent governments continued to allow TAA and Ansett to hold a
duopoly A duopoly (from Greek , ; and , ) is a type of oligopoly where two firms have dominant or exclusive control over a market, and most (if not all) of the competition within that market occurs directly between them. Duopoly is the most commonly ...
over domestic flights in Australia for almost four decades until the deregulation of the industry which resulted in Compass Airlines, Impulse Airlines and Virgin Australia to compete from 1990. In 1966, interstate courier company Ipec began operating interstate flights carrying freight from
Brisbane Brisbane ( ; ) is the List of Australian capital cities, capital and largest city of the States and territories of Australia, state of Queensland and the list of cities in Australia by population, third-most populous city in Australia, with a ...
to
Cowra Cowra () is a town in the Central West, New South Wales, Central West region of New South Wales, Australia. It is the largest population centre and the council seat for the Cowra Shire, with a population of 8,254. Cowra is located approximate ...
to connect with trucks to and from
Melbourne Melbourne ( , ; Boonwurrung language, Boonwurrung/ or ) is the List of Australian capital cities, capital and List of cities in Australia by population, most populous city of the States and territories of Australia, Australian state of Victori ...
. This was deemed in breach of the law and the service ceased. In 1981, freight services were removed from Two Airlines Policy to allow Ipec to operate services between the mainland and
Tasmania Tasmania (; palawa kani: ''Lutruwita'') is an island States and territories of Australia, state of Australia. It is located to the south of the Mainland Australia, Australian mainland, and is separated from it by the Bass Strait. The sta ...
.Govt has approved Ipec importing jet aircraft ''Freight & Container Transportation'' September 1981 page 12


References

{{Reflist Aviation in Australia Cartels