Qantas (QF, Sydney Kingsford Smith) and rival Virgin Australia (VA, Brisbane Int'l) have reacted angrily to an Australian government green-paper proposal to allow foreign airlines to freely operate domestic flights between airports located north of the Tropic of Capricorn (latitude 23.5° south).

The Australian newspaper reports the "open skies" proposal is aimed at boosting connectivity to the country's more remote cities and towns, many of which have traditionally relied on Perth Int'l, Melbourne Tullamarine, and Sydney Kingsford Smith - all located in the country's southern regions - for their international flights.

As such, the move could see foreign budget carriers operating flights between Broome, Darwin, Cairns, and Townsville while allowing mining towns such as Port Hedland direct access to the international market.

While the Northern Australia Green Paper proposal has been welcomed by politicians and the mining and agriculture sectors eager to cut transport costs domestically as well as to Asia, Qantas and Virgin Australia have reacted angrily stating it would have damaging repercussions not only for them, but also for smaller operators for whom regional feeder flights are their bread-and-butter.

"Allowing foreign carriers to operate as de-facto domestic airlines would have far-reaching, unprecedented and damaging consequences for Australian aviation," a Qantas spokesman told the newspaper. "It would change the economics of already commercially marginal routes in some parts of northern Australia, which a number of regional carriers have been serving for decades."