Originally Posted by
Bear96
How does this subsidy even work politically, with an Australian city / state (wherever the subsidy is coming from exactly, but ultimately the Australian taxpayer one way or another) giving money to a foreign airline instead of an Australian one to operate a route?
And wouldn't this encourage UA to consider pulling out of the market since it would be creating such an uneven playing field, while the goal of the subsidy seems to be to encourage MORE airlines and flights? (Same issue for QF, but my first question above would seem to be of more importance to them.)
While the Australian government does work very closely w/ Qantas, the state still wants to promote competition for its population and having a 3rd airline on this route will be beneficial. Adding service is also about growing tourism and business relationships to stimulate economic growth.
UA is pretty strong here, with VA as their partner and ANZ as a JV partner, they get plenty of feed to run this route. That being said. South Pacific is still well overcapacity, even after UA pulled back a lot from last NW24. That's why I'm thinking a lot of the BNE routes will dissolve in favor of serving MEL longer-term.