Australia – a reluctant liberalizer

This chapter surveys the liberalization process in Australia’s domestic and international aviation. Australia deregulated its domestic airline industry in 1990. Initially, the lack of gates was a significant barrier to effective deregulation, but the collapse of Ansett and the privatization of the airports meant that gates became available. Currently there are two major full service carriers and two major low-cost carriers, though the latter are owned by the former. International liberalization has been a gradual process, and it still continues. In the 1980s Australia bowed to the inevitable and allowed sixth freedom carriers onto the Australia–Europe market. Individual bilateral markets were gradually liberalized; for example, the US market (with pressure from the US) and the Japan market (where the main impetus for liberalization was from Australia). While most forms of regulation have been removed, there are still (mainly slack) capacity controls in many markets.