Following the cessation of hostilities of World War II the Chifley Labor Government in Australia held the belief that air transport was primarily a public service like hospitals, the railways or even the post office. If there was to be a monopoly at all, then it should be one owned by the public and working in the publics’ interest.
In August 1945, only two days after the end of WW II the Australian parliament passed the Australian National Airways Bill, which set up the Australian National Airways Commission (ANAC) and charged it with the task of reconstructing the nation's air transport industry. In keeping with the Labor government's socialist views the bill declared that the licenses of private operators would lapse for those routes that were adequately serviced by the national carrier.
From this point in time it seemed that air transport in Australia would be a government monopoly. However a legal challenge backed by the Liberal opposition and business interests in general, was successful and in December 1945, the High Court of Australia ruled that the Commonwealth did not have the power to prevent the issue of airline licenses to private companies. The government could set up an airline if it wished, but it could not legislate a monopoly. Much of the press objected strongly to the setting up of a public airline network, seeing it as a form of socialization by stealth.
With the Bill suitably amended to remove the monopoly provisions, the Australian National Airways Commission came into existence in February 1946. The commissioners themselves were prominent high-achievers, including the director-general of civil aviation, the deputy director, a Labor party luminary and former member of the Commonwealth Bank board, the director-general of posts and telegraphs, and the assistant secretary of the Treasury. The commission was to be chaired by Arthur Coles.
Coles was one of the richest men in Australia, and the co-founder of the Coles Group. By this time however, Coles had withdrawn from active management of the family business. He was 'a great believer in competition for business' and would not have accepted the post of Chairman of the ANAC had the monopoly provision been retained.
The Commission decided on name the new Government airline ‘Trans-Australia Airlines’ and applied to the Treasury for a preliminary advance of £10,000 and set about making plans, recruiting staff, and purchasing equipment.
Reginald Ansett, the proprietor of the small Victorian airline Ansett Airways was quick to make an unusual offer to Coles in order to get this new airline off to a flying start by selling his entire operation to the ANAC as a going concern, including (if desired) his own services as managing agent. The asking price, the Commission decided, was optimistic, and Ansett declined a more modest counter offer.
There was considerable correspondence between the Commission and Ivan Holyman, the Chairman of Australian National Airways, with a view to recruiting him as the General Manager of T.A.A. with the yearly salary of £10,000. When this offer was declined it was suggested that the ANAC could buy A.N.A. which was a 'near-monopoly airline' outright. Holyman was not willing to sell nor to work for a government-owned body, but was interested in setting up a ‘composite company’, the details of this proposal remained unclear.
Eventually the ANAC proceeded with its original plan to build an airline from scratch. One of the first people hired was Lester Brain, then the operations manager at Qantas Empire Airways. Brain had 22 years of pioneering aviation experience behind him and was regarded as the man behind Qantas' reputation for technical excellence. He applied for the advertised position of ‘T.A.A. Operations Manager’ but to his surprise he was instead offered the position of General Manager - with a yearly salary of £3,000 - not the £10,000 that had been offered to Ivan Holyman.
T.A.A. acquired its first two aircraft in mid-June 1946, both Douglas DC-3s. A dozen more DC-3s would be added over the next few months, all ex Royal Australian Air Force aircraft that had originally been acquired by the Australian Government under the 'lend-lease agreement' with the United States Government during WW II.
In July 1946 the Australian Government Treasury released £350,000 to allow T.A.A. to order four larger, more modern aircraft - the Douglas DC-4 - from the United States. Brain also appointed Aubrey Koch (also from Qantas) as the Senior Pilot DC-4 and John Watkins as the airline's Chief Technical Officer. Watkins would become one of the key figures in the later success of T.A.A.
One of the first tasks that Arthur Coles assigned to John Watkins was to find out what new equipment was being developed by the different aircraft manufacturers that would enable the new airline to offer its passengers a better product than the established rival, at a competitive price.
This was typical of Coles, who knew nothing about aircraft, to reason that quality equipment would be vital to the success of T.A.A., and then select the best man for the job of finding it and be prepared to back his judgement.
Political considerations again played a major roll in the start-up date of T.A.A. It was planned to start regular services on October 07, 1946 but as there was a federal election set for September 28 it became imperative that the airline be operational before that date as there was no certainty that the Chifley Government would be re-elected, and the Liberal opposition had clearly stated that it was opposed to a government owned airline. If the airline was a going concern then it would be much harder to close it down.
On the morning of September 09, 1946 at 05:45 hours Captains Hepburn and Nickels departed Melbourne’s Laverton Airport bound for Sydney in the Douglas DC-3 VH-AES ‘Hawdon’. The airline's first scheduled flight was underway carrying a full load of VIPs and just one paying passenger. To start with, only one flight per day was operated between Melbourne and Sydney. On October 07, services were extended north to Brisbane while Hobart was added to the network on November 04 and Launceston was added on November 18. In November flights between Sydney and Melbourne were increased to two services per day.
By December 02 when services had been extended west to include Adelaide and Perth the airline was now offering daily flights between all the state capital cities, excluding Darwin. All flights were flown by the rugged Douglas DC-3.
In 1946 John Watkins had recommended to Arthur Coles that the airline should purchase the revolutionary Convair 240 airliner. This aircraft was very advanced for the time as if offered unmatched passenger comfort by way of pressurization. T.A.A. ordered five aircraft, with the first example being delivered in August 1948. This aircraft helped to established the airline's reputation for excellence and service reliability.
During 1947 new cities were added to the route network, Cairns in July, Wynyard and Darwin in November. In August the now famous slogan: ‘Fly T.A.A. The Friendly Way!’ was adopted for its marketing program.
In December 1948 Trans-Australia Airlines introduced another first for Australian aviation - an air express service for the carriage of small parcels and urgent mail on regular scheduled flights. In March 1949 direct flights between Sydney and Adelaide were introduced.
On August 19, 1952 T.A.A. placed an order for a British built airliner - the first such order placed by an Australian airline since 1935! This aircraft was the revolutionary turboprop Vickers Viscount - the first of which - VH-TVA - was delivered on October 13, 1954 but was destroyed on October 31 whilst carrying out pilot training at Mangalore Airport, Victoria. Despite this early setback the Viscount proved to be immensely popular aircraft with the travelling public as a result of their smooth, vibration-free ride.
By October 1955 Trans-Australia Airlines had introduced tourist-class seating in their aircraft with a corresponding lower fare - a first for any Australian airline.
John Watkins was impressed with the new Dutch built Fokker F.27 Friendship as a replacement for the older piston-engined Douglas DC-3s. His early input into some of the design features of this aircraft helped to make it an even better aircraft for Australia’s harsh operational environment. T.A.A. ordered its first batch of six aircraft on March 09, 1956 with the first aircraft entering service in June 1959. These new additions to the airline’s fleet allowed it to sell off some of its now very dated piston-engined DC-3 and DC-4 aircraft.
Although government-owned, the Liberal Government of the 1950s had a philosophical leaning towards the needs of the privately owned Ansett, especially has it had just purchased the assets of the troubled Australia National Airways on October 04, 1957. As a result the requirements of T.A.A. suffered to some extent. To help protect the newly formed Ansett-A.N.A. the controversial ‘Two Airlines Policy’ was introduced and it effectively limited the growth and expansion opportunities for both airlines without government approval.
Flight numbers and schedules were strictly controlled, with T.A.A. and Ansett-ANA having flights departing airports for the same destination at exactly the same time with exactly the same equipment. The policy was so strict that the airlines were required to purchase identical aircraft for their respective fleets and that said aircraft were required to enter Australian airspace at exactly the same time on their delivery flights.
Another significant turboprop aircraft that was added to the T.A.A. fleet in 1959 was the Lockheed 188A Electra. T.A.A. did not want to purchase the Electra - they wanted to acquire the French built Sud Aviation SE-210 Caravelle which was a jet-engined airliner, but the Australian Government deemed that the transition to such jet aircraft was too great a step forward for Ansett-A.N.A. at that point in time. Despite a major design flaw in the Electra, which Lockheed rectified under their ‘LEAP’ program, this aircraft proved to a very reliable acquisition.
1960 brought a new challenge to the airline when it commenced services to the Territory of Papua and New Guinea. It developed routes to serve many of the remote towns that had previously been flown by Qantas. It encouraged tourists to the area and later introduced the Bristol 170 Freighter to help carry the huge volumes of cargo that needed to be transported throughout the Territory. To climax this outstanding year T.A.A. became the first Australian airline to carry one million passengers in a twelve month period. By June 1961 the airline had carried a total of 10,000,000 passengers, serving 139 destinations covering a total of 42,357 unduplicated route miles.
Trans-Australia Airlines was finally able to enter the jet-age when in February 1963 they signed a contract with the Boeing Aircraft Company to purchase two Boeing 727-100s, for delivery in 1964. These aircraft were delivered and entered service just before the busy Christmas period in 1964. Speed and luxury were now being introduced to the major capital cities thus allowing the Vickers Viscount to be used on deployed on the secondary routes.
With the emphasis on long range planning for the best possible results, T.A.A. placed orders with the Douglas Aircraft Company for the Douglas DC-9-30 twin-jet in April 1965 as a supplementary airliner for its smaller routes. The acquisition of this aircraft type allowed the airline to deploy the Lockheed Electras on services to New Guinea and Hobart.
By the late 1960s it was decided to modernize the airline's livery - the ‘white T on a blue tail’ to denote the the airline’s ‘T-Jets’ was introduced. It also coincided with one of its more memorable television advertisements of the period with the catchy jingle ‘Up, Up and away, with TAA, the Friendly Friendly Way’. These lyrics and music were a variation on the 1967 song ‘Up, Up and Away’ written by Jimmy Webb and were also used by the US airline T.W.A.
Further expansion occurred in the 1970s with a fleet of the larger Boeing 727-200s being acquired. Once again the terms of their introduction were restricted by the two-airline policy.
This policy was marginally relaxed in the early 1980s when T.A.A. was able to introduce the Airbus A300B4 wide-body jet airliner whilst Ansett chose to purchase the Boeing 767-200. At the same time Ansett took the opportunity to purchase the much smaller Boeing 737-200s, a move that T.A.A. did not follow. T.A.A. paid a hefty price shortly thereafter when the Australian economy softened and air travel was affected.
While the Airbus A300 was a revolutionary aircraft at the time for the domestic airline industry, being a wide-body, twin aisle aircraft that provided significant extra capacity on the airline’s major east coast network - Brisbane - Sydney - Melbourne and to Perth, it also became a liability when the market softened. This resulted in Trans Australia leasing out two of its recently delivered Airbus A300 aircraft to the German airline Condor.
In 1986 Trans-Australia Airlines was rebranded as 'Australian Airlines' and this marked the return of stylised ‘kangaroo’ to the livery. Its new image coincided with a very successful and popular television campaign, ‘You Should See Us Now’, ‘Face To Face’ and ‘The Way We Do The Things We Do’ became the carriers new theme songs.
In 1986, after a change of airline management, the name Trans-Australia Airlines was controversially dropped, in favour of Australian Airlines. Associated with this image change was a new livery for the airlines' aircraft, which now sported the single word title - ‘Australian’.
By the end of the 1980s, the government began to move towards a total deregulation of domestic aviation market. Deregulation took effect in October 1990. A by-product of this impending change was the Australian pilots’ dispute in 1989. The end result of this dispute saw the resignation of a majority of Australian Airlines' aircrew and the basic structure of the airline was changed forever.
During the 1990s the domestic aviation scene was again preparing to change. Throughout this period of transformation and deregulation, where new carriers were able to enter the market, Australian Airlines continued its successful run by posting healthy profits, increasing passenger loads and gained much favour from its catchy television commercials. Although the merger with Qantas was seen as inevitable to give the latter a domestic network and to revive its bottom line, many former staff of Australian Airlines (TN) and the general public mourned the loss of this iconic Australian brand.
The decision had been made at Federal Government level to offer both government owned carriers for sale, Australian (which as a government corporation and Qantas being an unlisted public company following its shares being purchased by the Commonwealth in 1947) was offered first but was quickly snapped up by Qantas who offered $400m to purchase the domestic carrier.
Qantas then decided to merge the airline into its network and subsequently the government offered the entire merged operation in a public float, after selling a cornerstone stake to British Airways (25%), thus returning 'Qantas' to the stock market after being absent from listing since 1947.