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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-11-14 Daily Xml
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TIGER AIRWAYS

Mr PENGILLY (Finniss) (15:13): Will the Treasurer advise which version of the funding arrangements for Tiger Airways and Adelaide Airport Limited is factual and correct—the hundreds of thousands of dollars version he told a press conference yesterday or the nil, nought, nothing version his office later advised?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (15:13): The nil, nought, nothing version that my office advised. I made a mistake. I am human. I made a mistake in a press conference. One of the things on which I pride myself is that when I make a mistake I admit it. I made an error.

Ms Chapman interjecting:

The Hon. K.O. FOLEY: I could have made a ministerial statement, I know. We corrected the record with the media as soon as we realised it. The Minister for Tourism and I have been working with Tiger Airways.

The Hon. P.F. Conlon interjecting:

The Hon. K.O. FOLEY: You have had nothing to do with it.

The Hon. P.F. Conlon: I went to one meeting.

The Hon. K.O. FOLEY: Sorry, he went to one meeting; Pat did it. We have been working with Tiger Airways for some time. Initially, we worked with them to get a hub here in Adelaide, to get Tiger Airways hubbing out of the old terminal to try to get them to span out around Australia.

Mr Pengilly: Trying to get them based in Adelaide?

The Hon. K.O. FOLEY: I tried to get them based in Adelaide.

Mr Pengilly: You failed.

The Hon. K.O. FOLEY: Yes, we did fail; absolutely. But we tried with some incentives. What we found—which is what we have found previously—is that the aggressive nature of Tullamarine, in this instance—and previously with Jetstar at Avalon; and I think Avalon charges no landing fees at all because it just wants the throughput—is that, under the Adelaide Airport structure, there is a fixed landing charge which Adelaide Airport must charge any airline under the agreement to build the terminal.

They cannot offer a subsidised or reduced rate to a low cost carrier. They have to charge the same. That in the end worked out to be too high a hurdle for a hubbing exercise out of Adelaide. We tried to meet that, and we did put forward a proportionate bid for that, and obviously in yesterday's press conference I had not sufficiently updated my memory bank on just exactly what, if any, money was put on the table.

But the important thing here is that, notwithstanding that they are hubbing at present out of Tullamarine, they see Adelaide as a serious growth market, and they are putting two flights a day, seven days a week, into Adelaide. And there is no money put forward by the government. I am very hopeful that we will soon see Tiger going to Adelaide and to other destinations. I heard a really, really good piece of ABC Radio this morning, believe it or not, and it was on the Abraham and Bevan show. It was the economics writer for The Canberra Times—

The Hon. S.W. Key: Peter Martin.

The Hon. K.O. FOLEY: Peter Martin. I have always liked Peter's assessment. He made a very good point, that the worst form of competition—

Mr Pengilly: You can't remember his name!

The Hon. K.O. FOLEY: Can't remember his name, but I like his economic stuff. Oh well, you'd be surprised how I get my information. What he was saying—and this is not an economics lecture, but what he was saying was that the worst form of competition you get is when you have two major players. He sort of also said that about politics, but we will leave that bit aside. With two airlines you do not really get serious competition. Because really what Virgin has done is pitch its price a bit cheaper than Qantas, or Jetstar, and vice versa. There is not a serious price differential. You need a third entrant to really seriously drive the price of airfares down.

We have also been talking to AirAsia, as well as other airlines, and the Minister for Tourism herself has been aggressively pursuing airlines. What we discover is that Australian travelling commuters are paying far too much for their airfares, even with Jetstar in the marketplace, and even with Virgin Blue. I have met on a couple of occasions Tony Fernandez, the owner and the builder of what is now one of the great airlines of Asia, AirAsia, and he makes the point that Australian consumers are getting ripped off when it comes to the cost of airfares, and whilst there are only two players in the market that is going to happen.

So, we are very excited and encouraged by Tiger's entry into the market. They are a subsidiary of Singapore Airlines. They are not some sort of start-up enterprise without serious backing. Tony Davis, the CEO, is an outstanding CEO, very well experienced, and I am confident that the growth in Adelaide Airport will only continue. The Minister for Tourism should be congratulated for the work that she and her agency are doing in promoting South Australia, and with the new head of Tourism, Andrew McEvoy, our state is very well placed. And I humbly apologise to the media for the error that I made yesterday. It probably will not be my last. But, as I said, I am a humble person and will apologise whenever it is appropriate.

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