Virgin Australia applied for ADL/OOL-PER-DPS. Failed due International Terminal Requirement

[ben95]

it wouldn't have taken the Department two months to get back to IASC when the question was asked.

There must be many hours of meeting between the legal teams of IASC/VA/the Department and research on their own with one party trying to convince the other. VA was also likely offered the chance to amend its application to operate from an international terminal but decided against it.

 

[HS-TQE]

It was also mentioned in a AA article that VA are encouraging Indonesia and Australia should get back to the table to negotiate for more capacity on the Australian end after losing their bid to JQ. (which would be tricky considering the Indonesian carriers aren't using the full capacity on their end, but also struggle against the Australian POS - thus the dismal loads on most Indonesian carriers out of Australia).

 

[justinbrett]

And there must have been some question mark around if this was possible or it wouldn't have taken the Department two months to get back to IASC when the question was asked.

No, that's not how it went.

4.4 On 21 December 2023, the Commission sought clarifying advice from the Department pursuant to section 28 of the IASC Act, regarding any restrictions on the operation of the capacity under the relevant bilateral air service arrangements. On 8 January 2024, the Department advised that services to be operated under the bilateral arrangements are to be conducted as an international service, arriving and departing at an international terminal at all three points.

Crystal clear - and a quick response considering the Christmas / New Years break.

4.5 On 20 March 2024, the Commission sought additional advice from the Department, to confirm whether the sequencing of the sectors comprising the services as proposed by each applicant is consistent with the provisions of the Australia-Indonesia bilateral air services arrangements. On 21 March 2024, the Department confirmed that the proposed sequencing would be permissible under the Australia-Indonesia bilateral air services arrangements

Overnight response. And this query wasn't necessarily in relation to domestic/international. By the term sequencing, I'd guess someone was questioning whether CNS-MEL-DPS was valid. But it doesn't go into detail so we'll never know.

Either way the rules were well known by those involved.

As to why this continued in Apr-Jun, it sounds like VA had a chance to change their proposal but didn't, and ISAC tried a re-attack and obviously failed, as the rules are not flexible. I don't know why the final response to this took two months, but given they'd already given ISAC the answer, they may have had other priorities. Or awarding the capacity to QF might have made the minister get involved.

Not really, no ball dropped. It wasn't going to work for them using the international terminals so they unsuccessfully tried to change the rules.

Nothing wrong with trying - nothing wrong with failing.

Well they've just learnt that's not how things are done. If you want to change the rules, you change the agreement, and that requires negotiation with Indonesia. You're in the same position as QR.

The big reason why this isn't allowed is it's a massive advantage to Australian carriers, Indonesian carriers can't operate domestic flights. They're already disadvantaged that their tag flights can't carry domestic pax, but to allow a totally domestic flight would be ridiculous.

The submissions (including external stakeholders like airports) are all poorly written as most focus on the increased service between OOL-PER and domestic competition, something that ISAC isn't interested in.

 

[jase05]

thus the dismal loads on most Indonesian carriers out of Australia).

Great for award seats though.
Have no trouble getting GA J rewards in or out of Australia

 

[SeaWolf]

Crystal clear - and a quick response considering the Christmas / New Years break.

As previously outlined from the draft determination:

4.11 Following receipt of this information, pursuant to section 28 of the IASC Act, the Commission wrote to the Department on 4 April 2024 requesting advice on whether it considers that:
...
b) Virgin Australia’s planned operations are allowed under the Australia-Indonesia bilateral air services arrangements.

The Department then responded two months later:

4.12 On 6 June 2024, the Department advised the Commission that “the capacity entitlements outlined in the Australia-Indonesia air services arrangements relate to an international airline service, and not domestic airline services”. The Department advised that the use of the additional capacity requires an international service to be in operation in all three points (the departure point, the intermediate point and the arrival points).

Had it been "crystal clear" then IASC would not have had a reason to ask the Department for further advice. They clearly had a reason to request further advice and the Department needed two months to consider the issue.

 

[justinbrett]

As previously outlined from the draft determination:



The Department then responded two months later:



Had it been "crystal clear" then IASC would not have had a reason to ask the Department for further advice. They clearly had a reason to request further advice and the Department needed two months to consider the issue.

It was crystal clear, the answer as given on 8 Jan. The answer given on 6 Jun was exactly the same. It's also what I posted in this very thread several times, as did others.

Maybe there was some political lobbying. Perhaps they attempted to change the agreement with Indonesia. Likely a brief sat on the ministers desk for six weeks advising ISAC were about to award capacity to QF over VA (and hence bad PR for the government). Either way VA should have come into this with their eyes open knowing what they were requesting isn't permitted and would require significant changes, none of this was mentioned in their public correspondence (perhaps so QF couldn't weaponize it). They were given the answer in Jan and that never changed.

 

[ben95]

Maybe there was some political lobbying.

Seems unlikely. This application wasn’t publicized on mainstream media and hardly known outside of the aviation community.

It was crystal clear, the answer as given on 8 Jan

The answer was given in Jan, perhaps VA took a look at it and decided they wanted to interpret the agreement’s language in a different way that would permit their proposed operations. Their lawyers write up a brief and submit to IASC/Department and their lawyers took a good look at it, deliberate for 2 months (maybe even some back channel communications with Indonesian authorities to clarify things) and ultimately came to a conclusion that it’s a no. I doubly the language in the agreement was crystal clear, it must have had some ambiguity to allow this to drag on for months.

 

[justinbrett]

Seems unlikely. This application wasn’t publicized on mainstream media and hardly known outside of the aviation community.

That’s not what lobbying is. It’s usually hidden from the public - I’m referring to the airline lobbying the department to award the capacity to VA. This definitely occurred in the QR case, including a phone call from JH to the PM.

The answer was given in Jan, perhaps VA took a look at it and decided they wanted to interpret the agreement’s language in a different way that would permit their proposed operations. Their lawyers write up a brief and submit to IASC/Department and their lawyers took a good look at it, deliberate for 2 months (maybe even some back channel communications with Indonesian authorities to clarify things) and ultimately came to a conclusion that it’s a no.

I imagine this is what happened, but that is VA operating well outside of its lane. It is not up to the airline to get legal advice for international treaties. They can only operate within the legal understanding of the government which is the party to the treaty, not the airline. Sure lobby all you like but it’s mostly a waste of time arguing on legal grounds once you’ve got an answer. End result is exactly what happened.

it must have had some ambiguity to allow this to drag on for months.

No. Complete assumption this time was because the department didn’t know how to answer (the exact answer it already gave). Language is pretty emphatic to me.

 

[PERLHR]

Seriously...at T1 at PER ...an issue in towing from domestic to international gates as some suggest? If this is an issue for VA then I will be surprised if they last through to 2025. They tow quite happily from gate to remote stands always and for night stops.

I agree, they dropped the ball on this. If they did not want it why apply?

Also don't JQ already operate Perth to Bali?

 

[HS-TQE]

Seriously...at T1 at PER ...an issue in towing from domestic to international gates as some suggest? If this is an issue for VA then I will be surprised if they last through to 2025. They tow quite happily from gate to remote stands always and for night stops.

VA's issues as pointed in other posts is that the bilateral requires them to operate the domestic legs as "International" tag flights from the International Terminal.

JQ and QF already do this for some limited international flights (e.g QF5/6, some JQ tags that pop up seasonally e.g MEL-CNS-NRT, and so on).

VA didn't want to operate their domestic legs as an "international flight" so they tried 'unsuccessfully' to get that changed. But the authorities said no, thus they awarded the whole allocation to the JQ/QF group.

 

[PERLHR]

VA's issues as pointed in other posts is that the bilateral requires them to operate the domestic legs as "International" tag flights from the International Terminal.

JQ and QF already do this for some limited international flights (e.g QF5/6, some JQ tags that pop up seasonally e.g MEL-CNS-NRT, and so on).

VA didn't want to operate their domestic legs as an "international flight" so they tried 'unsuccessfully' to get that changed.

Ah..so it would be similar to the soon to be stopped MEL-PER-LHR.? Ok I guess if they can't cope with that then fine. However there remains probably substantial PER VA FF disappointed with this outcome.

 

[Harrison_133]

Ah..so it would be similar to the soon to be stopped MEL-PER-LHR.? Ok I guess if they can't cope with that then fine. However there remains probably substantial PER VA FF disappointed with this outcome.

What they wanted to do was operate these flights in a similar way to how Jetstar ran the Asia-bound flights through the old Darwin scissor hub. This was different to the 787 tag flights that currently run.

Take the old JQ61 MEL-DRW-SIN for example. This departed from Terminal 1 Domestic in Melbourne and arrived into Darwin Domestic. Passengers then completed immigration formalities in Darwin, the midpoint.

VA, thinking there was ambiguity in the bilateral, proposed to operate these flights in the same way. Same flight number all the way ADL-PER-DPS & OOL-PER-DPS but passengers would then complete international processing in Perth, the midpoint. Obviously they got a no.

At some point Jetstar had this set up on some East Coast-DRW-DPS flights too. How did they work in relation to the bilateral back then?

 

[Saab34]

Jetstar have never operated any ‘D’ flights with A320/1. It has purely been 330, and 787, and often involving MEL/SYD/OOL/CNS. Largely just repositioning flights.

 

[yachty]

Jetstar have never operated any ‘D’ flights with A320/1. It has purely been 330, and 787, and often involving MEL/SYD/OOL/CNS. Largely just repositioning flights.

Yes they have. There used to be an ADL-DRW-DPS with the ADL-DRW operating as a tag flight before COVID. There's probably been others over the years.

 

[Harrison_133]

Yes they have. There used to be an ADL-DRW-DPS with the ADL-DRW operating as a tag flight before COVID. There's probably been others over the years.

They didn't. They were two separate flights with different numbers. The ADL-DRW-ADL legs were domestic services and operated as such, but for some reason had flight numbers in the international block (JQ81/84). DRW-DPS-DRW were separate flights (JQ83/82).

 

[Saab34]

The Adelaide to Darwin ‘Tag’ flight was a hot topic in its time, namely as they used the Thai Cabin Crew for the domestic legs. That practice was soon stopped right after due to uproar from unions and employees.

Which begs the question, are these A321 ‘D’ flights going to be operated by Thai or other crews? I think using Thai crews for say Cairns to Melbourne is abusing the laws. I would hazard a guess and say 5% or 0% will be using the flight for CNS-MEL-DPS puropses. CNS-MEL is purely a domestic flight here, and the executives know it. Nothing but a ploy to gain an extra MEL-DPS

 

[yachty]

They didn't. They were two separate flights with different numbers. The ADL-DRW-ADL legs were domestic services and operated as such, but for some reason had flight numbers in the international block (JQ81/84). DRW-DPS-DRW were separate flights (JQ83/82).

Apologies for the wrong info then. I thought it had operated as a proper tag prior to changing to that setup.

 

[Must...Fly!]

The Adelaide to Darwin ‘Tag’ flight was a hot topic in its time, namely as they used the Thai Cabin Crew for the domestic legs. That practice was soon stopped right after due to uproar from unions and employees.

Which begs the question, are these A321 ‘D’ flights going to be operated by Thai or other crews? I think using Thai crews for say Cairns to Melbourne is abusing the laws. I would hazard a guess and say 5% or 0% will be using the flight for CNS-MEL-DPS puropses. CNS-MEL is purely a domestic flight here, and the executives know it. Nothing but a ploy to gain an extra MEL-DPS

If the QF group executive branch can be guaranteed to do anything, pushing the boundaries of IR limits and laws is it.

Just saying.

 

[justinbrett]

What they wanted to do was operate these flights in a similar way to how Jetstar ran the Asia-bound flights through the old Darwin scissor hub. This was different to the 787 tag flights that currently run.

Take the old JQ61 MEL-DRW-SIN for example. This departed from Terminal 1 Domestic in Melbourne and arrived into Darwin Domestic. Passengers then completed immigration formalities in Darwin, the midpoint.

VA, thinking there was ambiguity in the bilateral, proposed to operate these flights in the same way. Same flight number all the way ADL-PER-DPS & OOL-PER-DPS but passengers would then complete international processing in Perth, the midpoint. Obviously they got a no.

At some point Jetstar had this set up on some East Coast-DRW-DPS flights too. How did they work in relation to the bilateral back then?

The difference being DRW isn’t restricted in the ASA (not part of the big 4) so this was fine.

Which begs the question, are these A321 ‘D’ flights going to be operated by Thai or other crews? I think using Thai crews for say Cairns to Melbourne is abusing the laws. I would hazard a guess and say 5% or 0% will be using the flight for CNS-MEL-DPS puropses. CNS-MEL is purely a domestic flight here, and the executives know it. Nothing but a ploy to gain an extra MEL-DPS

But they’re not domestic flights, they’re international flights. That was the whole point of why VA lost.

Yes absolutely playing the game to get extra capacity out of MEL, but it’s legal. Ever heard of that QR airline?

 

[Saab34]

But they’re not domestic flights, they’re international flights. That was the whole point of why VA lost.

Yes they are International. However, the CNS-MEL tag flight, I wonder if the revenue will fall under Jetstar Domestic or International.

I doubt these extra tag flights will be in addition to the current domestic flights. Watch them pull those back as these new ‘International’ tag flights take off, that people will only be using to fly Domestic.