Australia, it's time to deregulate the skies

What he didn't say speaks volumes. He ignored context.

That is, many countries don't need to open their skies to foreigners to enable competition on domestic routes to thrive and in the process lowering airfares for domestic passengers.

Forget small airports in northern Australia. Let's take a far simpler example. If I want to fly from Kingsford-Smith to Perth, I can fly VA, QF or QF subsidiary (Jetstar).

In effect a choice of two carriers, at a price determined by an oligopoly.

Now, if I lived in Los Angeles and wanted to fly to New York City, I could choose between flying:

• Virgin America
• JetBlue
• United
• Delta
• US Airways
• American
• Alaskan.

(For consistency, I treated low-end carriers identically. In the Australian example I ignored Tigerair and in the American example I ignored Spirit Airlines).

With so many airlines to choose from, consumers in southern California are not denied competition and lower fares by the absence of foreign carriers flying the Lower 48's skies.

But not so in Australia.

The dearth of local competition requires the involvement of foreigner carriers in order to create a competitive market in aviation.

All the doomsayers have a couple of things in common.

They are correct in forecasting possible financial problems for QF and VA if say Air Asia X, Emirates, Etihad, Singapore, Air Niugini or Air New Zealand start carrying passengers from Cairns to Darwin and onto Broome. And perhaps thereafter to Kingsford- Smith or Tullamarine.