This anti-competitive arrangement ensured that they carried approximately the same number of passengers, charged the same fares and had similar fleet sizes and equipment.
[1][2] The Two Airlines Policy was formulated by the Fifth Menzies Ministry with the Civil Aviation Agreement Act 1952 taking effect.
[3][4] The policy took practical effect when Ansett purchased the failing Australian National Airways in 1957,[5] resulting in it being the only competitor for the government-owned TAA.
This led to some minor intrusions by other airlines, for example in 1970, East-West Airlines briefly operated between Sydney and Melbourne by linking a longstanding Sydney to Albury service with a newly added Albury to Melbourne sector, thereby including a nominal number of through passengers at lower than normal fares.
[4] Subsequent governments continued to allow TAA and Ansett to hold a duopoly over domestic flights in Australia for almost four decades until the deregulation of the industry which resulted in Compass Airlines, Impulse Airlines and Virgin Australia to compete from 1990.