Commonwealth Numbered Acts

AIRLINES AGREEMENT ACT 1981 No. 75 of 1981 - SCHEDULE

                                    SCHEDULE                           Section
5 AN AGREEMENT made the 28th day of May 1981 between THE COMMONWEALTH OF
AUSTRALIA (in this agreement called "the Commonwealth") of the first part,
AUSTRALIAN NATIONAL AIRLINES COMMISSION constituted under the Australian
National Airlines Act 1945 and whose principal office is situated at 50
Franklin Street, Melbourne in the State of Victoria (in this agreement called
"the Commission") of the second part and ANSETT TRANSPORT INDUSTRIES LIMITED,
a company incorporated under the laws of the State of Victoria relating to
companies and whose registered office is situated at 501 Swanston Street
Melbourne in the said State (in this agreement called "the Company"), of the
third part.

WHEREAS the operation of air services within Australia is presently governed
by the provisions of the agreements set forth in Schedules 1, 2 and 3 of the
Airlines Agreements Act 1952 (in this agreement called "the previous
Agreements"):

AND WHEREAS substantial changes have taken place in the operation of air
services within Australia since the previous Agreements came into force and
effect which make it appropriate that the provisions of the previous
Agreements should cease to have force and effect upon the coming into
operation of the provisions of this agreement:

AND WHEREAS the Commission and the Company are the major operators of airline
services in Australia for transport of passengers:

AND WHEREAS in order to facilitate trade and commerce among the States and
assist the defence of the Commonwealth it is expedient in the opinion of the
Commonwealth to make provision for the purpose of ensuring -

   (a)  the efficient and economic operation of air passenger services within
        Australia;

   (b)  the continued existence in competition with each other of only two
        operators of air passenger services over the entire trunk route
        network within Australia:

AND WHEREAS it is an objective of the Commonwealth to recover the costs
incurred by it in the provision of facilities in respect of civil aviation
within Australia:

AND WHEREAS it is an objective of the Commonwealth to ensure that the
Commonwealth's curfew standards imposed from time to time in respect of
aircraft operations at certain airports in Australia are observed:

AND WHEREAS for the attainment of those purposes and objectives it is
desirable to make arrangements for the operation of air passenger services
within Australia in the manner provided in this agreement:

AND WHEREAS the Commonwealth has informed the Commission and the Company that
it intends to seek the enactment by the Parliament of the Commonwealth of
legislation which will provide for the establishment of an Independent Air
Fares Committee (in this agreement called "the Committee") to be constituted
and to have powers and functions in terms which implement the general
principles outlined in the Schedule to this agreement:

AND WHEREAS the parties have entered into this agreement on the basis that the
legislation to be sought by the Commonwealth will be enacted in terms that
adequately provide for the operation of the Committee for the purposes of this
agreement:

NOW IT IS HEREBY AGREED by and between the parties to this agreement as
follows:

1. (1) This agreement shall have no force or effect and shall not be binding
on any party unless it is approved by the Parliament of the Commonwealth.

(2) This clause and clause 2 shall come into operation on the day on which the
Act of the Parliament of the Commonwealth that approves this agreement is
enacted.

(3) The remainder of this agreement shall come into operation on the day of
occurrence of the last of the following events:

   (a)  an Act of the Parliament of the Commonwealth providing for the
        establishment and operation of the Committee comes into operation;

   (b)  the amendments referred to in clause 8 and sub-clause 9 (1) to the
        Customs (Prohibited Imports) Regulations and to the Airlines Equipment
        Act 1958 respectively come into operation; and

   (c)  the 90 day period referred to in sub-clause 2 (3) has expired without
        either the Commission or the Company having given a notice to the
        other parties pursuant to that sub-clause.



2. (1) This agreement is entered into by the parties upon and subject to the
condition that the legislation of the Parliament of the Commonwealth referred
to in the recitals (in this agreement called 'the Committee Act') for the
establishment and operation of the Committee is enacted and comes into
operation in terms which, in relation to the trunk route network, are
acceptable to the Commission and the Company as parties to this agreement.

(2) The Commonwealth will, as soon as practicable after the enactment of the
Committee Act, deliver to the Commission at its Principal Office and to the
Company at its registered office in the State of Victoria a copy of that Act.

(3) Within 90 days after delivery of the copy of the Committee Act to the
Commission and the Company, either the Commission or the Company may give to
the other parties a notice which states that the provisions of the Committee
Act in relation to the trunk route network are not acceptable to it for the
purposes of the operation of this agreement.

3. The Commonwealth undertakes to take all appropriate action within its power
to ensure that legislative provisions to the effect of the provisions that are
enacted by the Committee Act are continued in operation in relation to the
trunk route network during the currency of this agreement.



4. The provisions of the previous Agreements shall cease to have force or
effect upon the commencement and coming into operation of this clause as
provided in clause 1.

5. The parties agree that if legislative provisions are enacted by the
Parliament of the Commonwealth for the transfer of the assets and liabilities
of the Commission to a body corporate nominated by the Minister (hereinafter
called "the Corporation") this agreement shall have effect from the date on
which those legislative provisions come into operation as if the Corporation
were substituted for the Commission as a party to this agreement and (except
where the context otherwise requires) as if a reference to the Commission in
this agreement were a reference to the Corporation.

6. (1) (a) The parties shall take all reasonable action within their powers to
ensure that the Commission and the Company are the only two operators which
provide scheduled domestic passenger air services over trunk routes within
Australia.

   (b)  Subject to paragraph (c) of this sub-clause nothing in sub-clause (1)
        (a) shall prevent other operators from providing scheduled passenger
        air services over a prescribed route or successive prescribed routes.

   (c)  Where any successive prescribed routes have the effect of linking two
        trunk route centres that are for the time being trunk route centres
        for the purposes of sub-clause (1) (e), sub-clause (1) (b) applies
        unless the Secretary is satisfied that such scheduled passenger air
        services are not predominantly for use for the purpose of the carriage
        of passengers over separate prescribed routes and are to a significant
        extent used or to be used for the purpose of carriage of passengers
        between two centres that are for the time being trunk route centres
        for the purposes of sub-clause (1) (e).

   (d)  Without derogating from the objectives of sub-clause (1) (a), the
        parties acknowledge that nothing in this agreement shall preclude the
        Commonwealth, the Minister or the Secretary from permitting a
        passenger operator to develop specialised scheduled passenger air
        services over trunk routes of a nature which in the opinion of the
        Minister are not adequately provided for either by the Commission or
        the Company and for which after receiving a request in writing from
        the Minister neither the Commission nor the Company has, within a
        reasonable time, provided a service to the satisfaction of the
        Minister.

   (e)  For the purposes of this agreement a trunk route is a route linking
        any two trunk route centres. A trunk route centre shall be any one of
        the following: Adelaide, Alice Springs, Brisbane, Cairns, Canberra,
        Coolangatta, Darwin, Gove, Hobart, Launceston, Mackay, Melbourne,
        Mount Isa, Perth, Proserpine, Rockhampton, Sydney, Townsville and such
        other centres as the parties hereto shall agree from time to time.

(2) (a) For the purposes of this agreement a prescribed route is -

        (i)    a route:

   (a)  between a place in a State and another place in that State;

   (b)  between a place in a Territory and another place in that Territory;

   (c)  between a regional centre and another place in Australia; or

   (d)  over which the Minister has requested in writing the Commission and
        the Company to provide a passenger air service and neither the
        Commission nor the Company has within a reasonable time after the
        making of that request provided that service to the satisfaction of
        the Minister; or

        (ii)   a route, other than a route referred to in sub-clause (2) (a)
               (i) over which an operator, other than the Commission or the
               Company, operated a scheduled passenger air service on 1 July
               1980, regardless of whether it was the sole operator of
               scheduled air passenger services over that route.

   (b)  For the purpose of this agreement a regional centre is a place within
        Australia which is not for the time being a trunk route centre for the
        purposes of sub-clause (1) (e).

7. (1) Consultations between the Commission and the Company relating to the
operation of competitive scheduled passenger air services within Australia
shall only take place subject to the conditions set out in this clause.

(2) There may be consultations and agreement between the Commission and the
Company in respect of any matters affecting: -

   (a)  the efficient and economic operation of passenger air services which
        are not governed by other sub-clauses of this clause; and

   (b)  any other matter proposed either by the Commission or the Company
        which is approved by the Minister.

(3) The Minister shall have the right to direct at any time that any matter
approved by him under sub-clause (2) (b) shall no longer be a matter in
respect of which the Commission and the Company may consult.

(4) There shall be consultations between the Commission and the Company with a
view to reaching agreement in respect of the following matters: -

   (a)  passenger revenue load factors;

   (b)  aircraft utilisation; and

   (c)  any other matter proposed either by the Commission or the Company
        which is approved by the Minister.

(5) The Minister shall have the right to direct at any time that any matter
approved by him under sub-clause (4) (c) shall no longer be a matter in
respect of which the Commission and the Company must consult.

(6) There shall be a person (in this agreement called "the Arbitrator") who is
a person appointed by agreement between the Commission and the Company or, in
default of agreement, a Justice of a Federal Court, other than the High Court,
made available under arrangements made by the Attorney-General.

(7) If the Commission and the Company cannot agree on any matter referred to
in sub-clause (4), either party may by notice in writing to the other and to
the Arbitrator refer the matter or matters in dispute for decision by the
Arbitrator.

(8) In reaching a decision on any matter on which agreement cannot be reached,
the Arbitrator shall have regard to any submissions made by the Commission and
the Company and may seek and have regard to any submissions from the Secretary
or from any other person that the Arbitrator considers appropriate.

(9) Any agreement reached between the Commission and the Company as a result
of consultations pursuant to sub-clause (4) and any decision of the Arbitrator
shall be final and binding on the Commission and the Company and each party
shall give effect to and not take any steps inconsistent with that agreement
or decision.

(10) Consultations relating to the setting of fares shall be dealt with in
accordance with this sub-clause.

   (a)  All consultations between the Commission and the Company relating to
        fares shall be held in the presence of the Chairman or another member
        of, or a person designated by, the Committee.

   (b)  The Commission and the Company shall consult each other in relation to
        the setting of core fares and variation of core fares.

   (c)  Whenever required by the Committee to do so, the Commission and the
        Company shall consult each other before proceeding with an application
        to the Committee for approval of a new discount fare or a variation of
        a discount fare.

(11) On or before 31 January in each year the Commission and the Company will
provide a joint report to the Minister on the scope and effectiveness of the
consultations which took place in the preceding calendar year. The Minister
shall, as soon as possible, table the report in Parliament together with any
other documents which the Minister considers may be of assistance to
Parliament in its consideration of the report.

8. The Commonwealth will take all requisite steps to procure the amendment of
the Customs (Prohibited Imports) Regulations to include a provision that, in
considering applications for the import of aircraft and aircraft engines, the
Secretary shall have regard to the provisions of this agreement. The
Commonwealth undertakes that it will do everything in its power to ensure that
a provision to this effect will be retained in the said Regulations during the
currency of this agreement.

9. (1) The Commonwealth, through the Minister, will introduce in the
Parliament of the Commonwealth an amendment to the Airlines Equipment Act 1958
to impose and will thereafter take all appropriate action within its power to
maintain during the currency of this agreement, an obligation on any operator
(other than the Commission and the Company) of civil domestic air services who
seeks to import a turbo jet aircraft having a capacity in excess of 30
passengers or a maximum payload in excess of 3,500 kilograms in order to
operate domestic air services to enter into an undertaking to comply with the
said Act if approval to import such an aircraft is given to the operator. The
Commonwealth will take all reasonable action within its powers to ensure that
an aircraft, the subject of any such undertaking, is not used in a manner
contrary to such undertaking.

(2) The Commission and the Company shall comply with the provisions of the
Airlines Equipment Act 1958, as amended from time to time.

(3) The Commonwealth will ensure that the Minister will exercise his powers
under the Airlines Equipment Act 1958, as amended from time to time, to allow
equal capacity to the Commission and the Company over competitive routes.

(4) The Commission and the Company shall each notify the other in writing at
the time it makes an application (whether in respect of turbo-jet or other
aircraft) to the Minister for a certificate under section 13 of the Airlines
Equipment Act 1958, as amended from time to time, and when it is issued with
such a certificate.

10. (1) The Commission and the Company recognise that the Commonwealth is
entitled to fully recover from the air transport industry the costs properly
attributable to the provision of facilities for civil air transport and agree
to facilitate the implementation of measures taken by the Commonwealth for the
purpose of achieving that objective, provided that the Commonwealth agrees
that, allowing for minor variations between years, the Commonwealth will not
seek to recover more than the costs properly attributable to the provision of
facilities required for the operation of trunk route air services within
Australia.

(2) The Commonwealth agrees that in calculating revenue which is offset
against the costs properly attributable to the provision of facilities for
civil air transport, amounts received by the Commonwealth by way of duty or
tax on fuel used for civil air transport shall be included in such revenue.

(3) The Commonwealth agrees that it will not increase the amount of tax
(including customs and excise duties) payable in respect of each litre of
aviation fuel in any period of twelve months by a greater amount or rate than
the corresponding amount or rate of any increase in tax in that period imposed
on motor spirit.

11. The Commonwealth agrees to take all steps necessary to ensure that during
the currency of this agreement passenger air transport business transacted on
Commonwealth Government warrant is freely available to both the Commission and
the Company and that the holder of a Government warrant has a free option as
to the service to be used.

12. (1) For the purpose of providing for the maintenance and encouragement of
rural airline services, the Commission and the Company each undertakes with
the Commonwealth: -

   (a)  that except as provided in this clause it will maintain airline
        services to all places to which it operates airline services at the
        date of commencement of this clause; and

   (b)  that it will not cease to operate a service except after prior
        consultation with the Secretary with the view to replacement of that
        service by an air service provided by another operator.

(2) That in the event that the total direct and indirect costs of operating a
rural airline service during a continuous period of not less than 6 months
commencing after the date of commencement of this clause exceed the total
revenue from that service in respect of that period, the Commission or the
Company, as the case may be, which operates the service (in this clause called
"the operator") may give to the Commonwealth notice that it will cease to
operate the service upon the expiration of 3 months after the giving of the
notice.

(3) A notice under sub-clause (2) shall be accompanied by information which is
directed to establishing to the satisfaction of the Secretary that the event
referred to in that sub-clause has occurred.

(4) If the Secretary is satisfied that the event referred to in sub-clause (2)
has occurred, he shall notify the operator to that effect within 30 days of
receipt of the notice under sub-clause (2) and the operator may cease to
operate the service upon the expiration of the period of 3 months referred to
in sub-clause (2).

(5) If the Secretary is not satisfied that the event referred to in sub-clause
(2) has occurred he shall within 30 days of receipt of the notice under that
sub-clause notify the operator to that effect and, if the operator wishes to
proceed with the cessation of operation of the service, the question whether
or not the event has occurred shall be referred for determination (as an
expert and not as an arbitrator) by an independent chartered accountant agreed
upon by the Secretary and the operator or failing agreement by a chartered
accountant nominated by the President for the time being of the Institute of
Chartered Accountants in Australia.

(6) If it is determined in accordance with sub-clause (5) that the event
referred to in sub-clause (2) has occurred, the operator may cease to operate
the service upon the expiration of the period of 3 months referred to in
sub-clause (2) or upon the expiration of 7 days from the date on which a copy
of the determination of the expert referred to in sub-clause (5) was served on
the operator whichever is the later.

13. (1) During the currency of this agreement, the Commission and the Company
shall, as soon as practicable after the end of each financial year, but no
later than 31 December each year (unless otherwise agreed by the parties),
furnish to the Minister separately for presentation to the Parliament
financial information in respect of their respective businesses and those of
their subsidiary companies relating to: -

   (a)  the operation of passenger air services on trunk routes, including
        such other passenger air services as are provided as ancillary to the
        services on trunk routes; and

   (b)  the total operation of air services carried on by the Commission and
        the Company.

(2) The financial information provided by the Company pursuant to sub-clause
(1) shall be generally in accordance with the accounting requirements of the
Victorian Companies Act, be audited in accordance with the provisions of that
Act and certified as to correctness by two Directors of the Company.

(3) The financial information provided by the Commission pursuant to
sub-clause (1) shall be audited by the Auditor-General and certified as to
correctness by two Commissioners, or in such other manner as the Minister may
approve.

(4) When the Corporation becomes a party to this agreement the financial
information provided by the Corporation pursuant to sub-clause (1) shall be
generally in accordance with the accounting requirements of the law relating
to companies in the State or Territory of its incorporation, be audited in
accordance with the provisions of that law and certified as to correctness by
two Directors of the Corporation.

14. (1) Ansett Transport Industries Limited will procure that all its
subsidiary companies which own or operate aircraft that are used in the
provision of domestic passenger air services will comply with the several
obligations, prohibitions and limitations imposed on the Company under this
agreement and that they will not do anything inconsistent with the provisions
or purposes of this agreement.

(2) The Commission will procure that all companies in which it has a
controlling interest, directly or indirectly, and which own or operate
aircraft that are used in the provision of domestic passenger air services
will comply with the several obligations, prohibitions and limitations imposed
on the Commission under this agreement and that they will not do anything
inconsistent with the provisions or purposes of this agreement.

(3) When the Corporation becomes a party to this agreement it will procure
that all its subsidiary companies which own or operate aircraft that are used
in the provision of domestic passenger air services will comply with the
several obligations, prohibitions and limitations imposed on the Corporation
under this agreement and that they will not do anything inconsistent with the
provisions or purposes of this agreement.

(4) Nothing in this agreement shall impose any restriction on the activities
of the Commission or the Company over prescribed routes which are not imposed
on the activities of other operators over prescribed routes.

15. (1) The parties acknowledge that as at the date of signing of this
agreement the respective roles of Qantas, on the one hand, and the Commission
and the Company, on the other hand, in respect of international and domestic
air services are as follows : -

   (a)  the role of Qantas is to provide international air services and not
        domestic regular public air services, provided that Qantas has a right
        to carry international passengers and international freight on
        domestic sectors as part of its international services;

   (b)  the role of the Commission and the Company is to provide domestic air
        services and not international regular public air services;

   (c)  the above roles shall not prevent Qantas, the Commission and the
        Company operating services on behalf of each other.

(2) The Commonwealth agrees that, if there is at some future time a change or
changes in government policy as to the respective roles Qantas, the Commission
and the Company will perform in international and domestic air services, the
change or changes will only be implemented after obtaining the agreement of
the other parties to this agreement . The parties acknowledge that the
Commonwealth shall not implement any change or changes to the respective roles
of Qantas, the Commission and the Company without first consulting Qantas.

(3) The Commonwealth in its capacity as sole shareholder of Qantas agrees that
, during the currency of this agreement, there shall be a directive to Qantas
from the Minister which will contain a requirement that Qantas shall obtain
the Minister's approval before it operates scheduled domestic air services.
The Minister shall exercise this power of approval in accordance with the
respective roles Qantas, the Commission and the Company may have at the time
the approval is sought by Qantas.

(4) The Commonwealth agrees that, during the currency of this agreement, it
will not enter into air service arrangements or agreements with other
countries which will permit any foreign airline to operate scheduled domestic
air services, provided that a foreign airline may, if authorised by the
Commonwealth, carry international passengers and international freight on
domestic sectors as part of its international services.

16. (1) The Commission and the Company undertake not to operate at any airport
a type of aircraft the operations of which are for the time being restricted
to specific hours, during the hours within which operations by that type of
aircraft are prohibited at that airport.

(2) The last preceding sub-clause will not apply to cases of emergency, or
where the Minister considers the operations are necessary in the interests of
the public generally.

17. Nothing in this agreement requires or permits the Commission or the
Company to act in any manner inconsistent with the Air Navigation Act 1920, as
amended from time to time, or with the Regulations in force under that Act.

18. The Commonwealth will consult annually with the Commission and the Company
on departmental activities, programmes, practices, procedures and costs with a
view to minimising the amount to be recovered by way of air navigation
charges.

19. (1) If at any time during the currency of this agreement the Commonwealth
is involved in war, or the Minister informs the Company and the Commission
that there is an immediate danger of the Commonwealth being so involved, the
Company and the Commission will, if requested so to do by the Minister, make
available for use by the Commonwealth in such manner and for such time as the
Commonwealth requires all or so many as may be required of their aircraft,
spares, accessories, equipment, hangars, workshops, buildings and facilities.

(2) Subject to the next succeeding sub-clause, the Company and the Commission
shall be entitled to be paid such reasonable compensation for the use of their
property under the preceding sub-clause as is determined by mutual agreement
or in the absence of agreement by arbitration in accordance with the laws
relating to arbitration in force in the State of Victoria.

(3) Nothing contained in this clause shall be deemed to affect the operation
of any Act of the Commonwealth, or any regulation, rule, order or other
instrument made under or by virtue of an Act, or any other law, relating to
the acquisition or requisition of property in time of war or national
emergency.

20. (1) The Commonwealth will not exercise any of its powers under or by
virtue of an Act, including its power in relation to the making of
regulations, so as to discriminate against the Company or the Commission.

(2) The Commonwealth will, during the currency of this agreement, accord
substantially equal treatment to the Company and the Commission, including the
provision of loan guarantees for the acquisition of aircraft and associated
spares and equipment, the granting of import licences and allocation of
airport facilities.

21. The Commonwealth will include in the legislation introduced in the
Parliament of the Commonwealth to approve this agreement a provision that will
authorise and empower the Commission, in the exercise of its powers and
functions, to enter into this agreement and to do all things that this
agreement provides that the Commission will do or is empowered to do.

22. (1) This agreement shall continue in force unless and until determined in
accordance with the provisions of this clause.

(2) The Company may terminate this agreement by giving at any time after five
years from the date of commencement of this clause to the Minister and, if the
Corporation is at the time a party to this agreement, to the Corporation a
notice in writing of termination taking effect not less than three years after
the giving of the notice.

(3) The Corporation, when it is a party to this agreement, may terminate this
agreement by giving at any time after five years from the date of commencement
of this clause to the Minister and to the Company a notice in writing of
termination taking effect not less than three years after the giving of the
notice provided that the Corporation shall not have the right to give notice
of termination pursuant to this sub-clause unless at the time of the giving of
such notice the total beneficial shareholding of the Commonwealth in the
Corporation is less than 50% of the issued share capital of the Corporation.

(4) The Commonwealth may terminate this agreement by giving at any time after
five years from the date of commencement of this clause to the Company and, if
the Corporation is at the time a party to this agreement, to the Corporation a
notice in writing of termination taking effect not less than three years after
the giving of the notice.

(5) A notice under the last preceding sub-clause shall not be given unless the
consent of both Houses of the Parliament of the Commonwealth expressed by
resolution has first been given to termination of this agreement by the
Commonwealth.

(6) If the Company or the Commonwealth gives a notice under this clause it
shall, if the Commission is at the time a party to this agreement, as soon as
practicable thereafter furnish a copy of the notice to the Commission.

23. After the expiration of the financial year first occurring after the
commencement of clause 4 and thereafter during the currency of this agreement
the Commission and the Company shall, within two months of the expiration of
the previous financial year, report on the provision of domestic passenger air
services under this agreement for incorporation in the Department's annual
report.

24. Any notice or other communication to be given or served by the
Commonwealth or the Minister on the Commission, the Company or the Corporation
under this agreement shall be in writing and shall be deemed to have been duly
given or served if signed by or on behalf of the Minister and delivered at or
sent by prepaid post addressed to the principal office of the Commission or
the registered office of the Company in the State of Victoria and to the
registered office of the Corporation in the State or Territory of its
incorporation respectively and any notice or other communication to be given
or served by the Commission, the Company or the Corporation on the
Commonwealth or the Minister shall be in writing signed by or on behalf of the
Secretary of the Commission, the Company or the Corporation and shall be
deemed to have been duly given or served if delivered or sent by prepaid post
to the Minister at Parliament House, Canberra, ACT.

25. In this agreement unless the context otherwise requires,



"core fare" means an economy air fare, a first class air fare and child,
student and blind person concessional air fares;



"discount fare" means an air fare charged by a passenger operator in respect
of travel over a route, being an air fare the amount of which is less than the
economy air fare charged by that passenger operator in respect of travel over
that route;



"economy air fare" means an air fare, other than a first-class air fare, that
is the standard air fare charged by a passenger operator in respect of travel
over a route, being an air fare for travel in relation to which no special
booking conditions are attached;



"first-class air fare" means an air fare charged by a passenger operator in
respect of travel over a route, being an air fare the payment of which
entitles the person travelling to benefits to which some of the other
passengers on the same flight are not entitled;



"Qantas" means Qantas Airways Limited, a company incorporated under the laws
of the State of Queensland relating to companies;



"the Commission" means Australian National Airlines Commission and all
companies in which it has a controlling interest, directly, or indirectly,
which own or operate aircraft that are used in the provision of domestic
passenger air services;



"the Company" means Ansett Transport Industries Limited and all subsidiary
companies of Ansett Transport Industries Limited which own or operate aircraft
that are used in the provision of domestic passenger air services;



"the Corporation" means the Corporation and all subsidiary companies of the
Corporation which own or operate aircraft that are used in the provision of
domestic passenger air services;



"the Department" means the Department of Transport of the Commonwealth or any
other Department which is created to carry out its functions in relation to
the administration of civil aviation;



"the Minister" means the Minister of State for Transport of the Commonwealth,
and includes any Minister or member of the Federal Executive Council for the
time being acting for or on behalf of the Minister of State for Transport;



"the parties" means the parties for the time being to this agreement; and



"the Secretary" means the Secretary to the Department and any person for the
time being performing the duties of the office of Secretary.

26. This agreement shall be known as The Airlines Agreement 1981.

SCHEDULE

INDEPENDENT AIR FARES COMMITTEE

OUTLINE OF GENERAL PRINCIPLES

The Independent Air Fares Committee will consist of three part time members,
appointed by the Governor-General.

The Committee will undertake four major tasks in regard to the determination
of air fares charged by all regular public passenger air transport operators.

In respect to passenger air transport for each operator the Minister may
request the Committee to conduct a review at the conclusion of which it will
determine the manner in which any costs incurred in providing air services
will be attributed to the flagfall and distance component of those air
services. The Committee will also determine the amount, expressed as a
percentage of the economy air fares, by which first class fares are to exceed
economy fares. Such a task will be known as a cost allocation review.

A cost allocation review in respect to the Company and the Commission in
relation to specified routes will be held concurrently and commenced within 3
years of the commencement of the legislation implementing these principals.
Subsequent reviews in respect to specified routes of the Company and the
Commission will also be held concurrently and so that not less than 2 nor more
than 3 years has passed from the completion of one review to the commencement
of the next review.

Proceedings of the Committee relating to cost allocation reviews are to be
held in public unless an operator request, or the Committee of its own motion
decides, that they be in private.

The Committee will be empowered to undertake a comprehensive review of an
operator's costs and revenue to determine the level of economy air fares to be
charged by that operator. Such a review, to be known as a major air fares
review, will be undertaken by the Committee when requested by the operator or
when the Committee decides it is appropriate to do so.

An operator may request the Committee to undertake a review of economy fares
based on increases in costs relating to wages and wage related costs approved
by a body having powers in relation to conciliation and arbitration, fuel and
air navigation charges. In such a review, to be known as a minor air fares
review, the Committee will not be asked to approve an increase in economy
fares that would result in an economy fare that is more than 5% greater than
the economy fare determined at the previous major air fares review undertaken
by the Committee in respect to that operator. Such a review would be conducted
by the Committee in private.

The Committee will approve operators' applications to introduce discount fares
provided those fares meet criteria relating to their commercial viability,
their impact on trunk route economy fares and the conditions on which they are
to be offered. Approval of a discount fare will be withdrawn by the Committee
where it is satisfied that any of the conditions to which the approval of the
discount fare was subject is likely not to be met. Examinations of
applications for approval of discount fares will be made by the Committee in
private.

In undertaking cost allocation reviews and major and minor air fares reviews
the Committee will be required to have regard to guidelines which produce a
cost-based economy fare, including a nationally consistent fare formula for
two economically viable operators in respect to trunk routes.

In reviews, other than cost allocation reviews, only relevant operators may be
parties to the proceedings of the Committee.
A decision by the Committee in regard to a major air fare review, a minor air
fare review, and an application for a discount fare will be required to be
completed by the Committee within reasonable time limits.

Decisions of the Committee, including statements of its reasons, will be
published except where, in the opinion of the Committee, any finding, evidence
or material would reveal a trade secret of any passenger operator.

IN WITNESS whereof the parties have executed this agreement the day and year
first hereinbefore written

SIGNED SEALED AND DELIVERED for and on)
behalf of THE COMMONWEALTH OF AUSTRALIA)                        R. J. HUNT
by the Honourable RALPH JAMES DUNNETT HUNT,) Minister for Transport in the
presence of - )

J. R. EVANS

THE COMMON SEAL of the AUSTRALIAN) NATIONAL AIRLINES COMMISSION was hereunto)
affixed in the presence of - )

R. R. LAW-SMITH .................... Chairman

L. J. FITZGERALD .................... Secretary

THE COMMON SEAL of ANSETT TRANSPORT) INDUSTRIES LIMITED was hereunto affixed
in the) presence of - )

P. ABELES .................... Director

J. K. SIMPSON .................... Secretary