Virgin Australia has denied reports it is planning to move its national headquarters out of Brisbane.

The airline says it is frustrated over negotiations with the Queensland Government to fly to more regional centres.

Many regional routes are controlled and in some cases subsidised by the State Government.

Virgin Australia is currently locked out of those routes but contracts with existing carriers expire in March.

The threatened pullout comes as Virgin tries to tender for several routes, either regulated or subsidised by the government, including to Roma, Longreach, Cloncurry, and Charleville.

Qantaslink's contracts for these routes are due to expire in March, and Virgin has been seeking to have the market deregulated to give it a chance to fly them.

http://www.couriermail.com.au/news/queensland/airline-war-casts-doubts-on-local-virgin-base-virgin-threatens-brisbane-pullout/story-e6freoof-1226535716615

Regional flights in Qld are quite expensive – you may more to fly from Brisbane to Cloncurry than to Perth – and include lucrative air freight services with them.

Note there are really two decisions here. One is to subsidise regional air fares and restrict competitors. The second is to give the contract to Qantas Link without tender. It is the second part I question.

It is touching to see that the Newman government’s commitment to the efficiency of the private sector does not stop it protecting a private monopoly.