Airlines, airports battle over fees, laws

Angus Livingston
(Australian Associated Press)

 

Airlines want airports to drop passenger fees and the federal government to impose more regulation.

But airports say the airlines are acting in their own self-interest rather than the interests of passengers.

Qantas chief executive Alan Joyce and Virgin boss Paul Scurrah will appear at the National Press Club in Canberra on Wednesday to argue for changes to airport passenger fees.

“Fees and charges from monopoly airports are excessive and damaging the economy. And airports continue to reap super profits because there is no real threat of intervention to moderate their behaviour,” Mr Joyce will say.

“Australian airports are literally the only game in town. Their business model is based on it.

“We can’t just up-stumps and fly to the next airport 15 minutes down the road.”

But Australian Airports Association chief executive Caroline Wilkie says airlines want to entrench their own position and make it harder for other airlines to compete.

“In the last year alone, Qantas made more profit than the four major Australian airports combined,” she said.

“Qantas and Virgin want to squeeze competition out of the market to entrench the domestic duopoly and they know that’s exactly what will happen if they turn the screws on airport investment.”

Former Australian Consumer and Competition Commission boss Graeme Samuel is lobbying for the airlines, and he says changes are needed to stop monopoly behaviour.

One of the changes airlines are arguing for is a new arbitration regime, which would allow disputes with airports to escalate faster.

The AAA says this will put investment on hold, making it harder for new airlines to enter the market and challenge the major players.

“Where is the case for additional regulation when the existing dispute mechanisms are hardly ever used,” Melbourne Airport boss Lyell Strambi said.

“It would give the whip hand to incumbent airlines, allowing them to delay investment and reduce competition.”

But Mr Joyce says the airports shouldn’t be afraid of an independent umpire.

“You would think that where monopoly exists, there would be a straightforward dispute resolution system as a safeguard,” he says.

A Productivity Commission draft report in May said a change to the arbitration regime “would need to balance the interests of an airline and airport and would not consider the broader public interest”.

“We think it would profoundly change the way in which contracts are negotiated between airports and airlines, disrupt investment and harm the community,” the commission’s report said.

Treasurer Josh Frydenberg is expected to release the Productivity Commission report and the government’s response later this year.

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