C'wlth action sought on Compass crisis (A/Prem)

The State Government today called on the Commonwealth to allow international airlines to carry domestic passengers on long haul routes in the event Compass Airlines does not resume flights.

Acting Premier Ian Taylor said Western Australia's tourism industry would be hit hard if Compass remained grounded.

"The prospects of Compass again playing a key role in domestic air routes clearly rests with the provisional liquidator after an assessment of the company's financial position," Mr Taylor said.

"I am writing to the new Prime Minister, Mr Keating, to request that he ensure everything is done to make sure that WA does not suffer and either Compass can continue to operate or alternative arrangements are made.

"The State Government is keen that the company can continue to be a major operator on east-west routes because of the tremendous benefits to WA's tourism sector.

"However, if Compass does not resume, then there will be an even greater need for additional operators, so that we do not return to the duopoly that existed before deregulation was introduced."

Mr Taylor said Qantas already had indicated it was keen to enter the domestic market.

"The presence of Qantas and other international carriers that ply the Perth-east coast run would inject the competition needed to ensure airfares remained affordable for Australians," he said.

Mr Taylor said the State Government's direct involvement in any strategy to restore Compass flights also would have to await the report of the provisional liquidator.

"While the Queensland Government's proposed guarantee and NSW's move to transfer all its airline business to Compass may have appeal, it is far too early to be talking about such initiatives until the full extent of Compass's financial situation is known," he said.

Western Australian Tourism and Transport Minister Pam Beggs said the ability of Qantas to carry domestic passengers on routes longer than 2,000km could provide similar benefits to Australians as they received from Compass.

"This would mean centres such as Perth and Cairns, which gained most from Compass's services, would continue to be attractive travel options for domestic travellers," she said.

"It also would help maintain the momentum that had been generated by the Western Australian Tourism Commission's promotion campaigns in the east.

"The net benefit of these campaigns and deregulations has been an additional 126,000 interstate visitors, who injected $65 million into the State's economy in the past 12 months.

"Clearly there is much at stake and it is in the interests of Australia's tourism industry that the full benefits of airlines deregulation are passed on to the consumer."

Mrs Beggs said the State Government's Tourism Commission and Compass had developed a strong relationship in marketing WA as a premier tourist destination.

"The Commission's offices interstate have been regular ticket outlets for the airline and the current Blue Skies campaign in the east has nominated Compass as the carrier.

"Compass has been associated with Commission promotion campaigns involving more than $500,000.

"The company's current position is something the Government and the tourism industry views with deep concern.

"While Compass has our support, the major thrust needs to centre on ensuring there is competition in the domestic skies."