Airlines of New South Wales Pty Ltd v New South Wales (No 2), was a High Court of Australia case about the validity of Commonwealth regulations about intrastate air navigation. Although the Commonwealth has the power to regulate interstate air navigation under s 51(i) of the Constitution, it can only regulate intrastate air navigation under the implied incidental power attached to that head of power. It was held that intrastate air navigation can be regulated to the extent that it provides for the safety of, or prevention of physical interference with, interstate or foreign air navigation. Background In October 1964 the Air Navigation Regulations (Cth), were amended to make them apply to intrastate air navigation by the enactment of regulation 6(1)(f). Regulation 198 prohibited the use of an aircraft in regular public transport operations except pursuant to a licence issued by the Director-General of Civil Aviation, who, according to regulation 199(4), will have regard to the "safety, regularity and efficiency of air navigation and to no other matters". Regulation 200B stated that "an airline licence authorizes the conduct of operations in accordance with the provisions of the licence". The plaintiff, Airlines of New South Wales, had applied unsuccessfully for a licence to perform commercial air operations between Sydney and Dubbo, and then sought to challenge the validity and constitutional consistency of the Air Transport Act 1964 (NSW). The decision Regulations 198 and 199(4) The Court rejected the American doctrine of commingling that has found favour in the Supreme Court of the United States. Commonwealth legislative power cannot be enlarged to cover intrastate air navigation regardless of the integration of intrastate and interstate activities. However, Commonwealth laws can include intrastate activities within its ambit if for the Commonwealth law to be effective, it must operate indifferently to all activities, whether intrastate or interstate, in the relevant area. In particular, Kitto J stated that "the Australian union is one of dual federalism", and it is the Court's role to preserve such distinctions, however arbitrary; this distinction was also referred to by Dixon CJ in Wragg v State of New South Wales, which was quoted by Barwick CJ in this case. Kitto J continued to state that to ascertain the true character of the law, we examine what it does "in the way of changing or creating or destroying duties or rights or powers". Furthermore, Barwick CJ reiterated the rejection of the reserved