ABSTRACT
For many decades, the Australian international carrier, Qantas, was also owned by the government. Following deregulation of domestic airline services in 1990, the government merged Australian Airlines into Qantas, and in 1995 it privatised the enlarged Qantas. During the later part of the regulation era, the growth in the number of passenger journeys did encourage the two airlines to increase the number of trunk-route city pairs for which they offered some non-stop service. Two domestic airlines - the government carrier (TAA) and a chosen private airline (Ansett Airlines) - were given exclusive access to the 'trunk routes', defined as non-stop interstate service between any pair of ports included in a list of eighteen ports. In the regulation era, the restrictive provisions of the two-airline policy ensured the stability of a symmetrical market-sharing equilibrium. Once Australian Airlines was merged into Qantas, international travellers flying on Qantas could be steered towards Qantas domestic flights for their travel within Australia.
