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Battle lines

High hopes continue to provide stakeholders with cash-generating unit rather than
The terms of reference also include ‘That all the information on the airports’ quality of an essential community transport
the question of the effectiveness of service,” the ACCC said. service”.
the monitoring regime conducted players let But the ACCC also backed a Regional Express (Rex), which is
by the ACCC, whether the current new regulatory model, telling the a member of the RAAA, said regional
regime impacts on the ability fly in their commission commercial negotiations airports needed to be regulated to
of airports to price, operate and between airports and airlines would “dissuade the local councils from
invest in airport infrastructure in submissions be “further supported if the parties acting in a myopic manner that
an efficient and timely manner are provided with a fallback option of could end up destroying the local
and whether the existing regime is suggests seeking arbitration”. community”.
effective in appropriately deterring It would also address the imbalance “Rex would recommend a
potential abuses of market power by there is a lot in bargaining power between framework whereby the airline
airport operators. monopoly airports and airlines, and the regional airport owner
The ACCC advocates continuing at stake.’ particularly small airlines. would negotiate in good faith but if
its monitoring of the major Privatisation of Australia’s airports agreement could not be reached then
Australian airports, as it does began in the late 1990s, when the either party could request the ACCC to
currently with an annual report on government sold off most of the make a decision as to which of the two
price and service quality monitoring nation’s major airports in the form of positions to accept and such a decision
for Brisbane, Melbourne, Perth long-term operating leases. would be binding on both parties,” the
and Sydney airports, alongside an Sydney Airport’s submission to The 20-year history of privatisation airline group’s submission said.
arbitration regime. the Productivity Commission has shown higher charges that have “Such an approach would be the
“Monitoring would support calls on the federal government not resulted in a commensurate most cost-effective as the very threat
commercial negotiations, help to to revisit the operating improvement in service levels, the of intervention by the ACCC and the
assess whether the arbitration regime restrictions currently in place. ACCC said. negative publicity that would generate
is achieving the desired results, and seth jaworski The issue was debated at the in the local community would be
recent International Air Transport sufficient in most cases for the local
Association (IATA) annual general councils to act responsibly.”
meeting in Sydney, where its member
airlines passed a resolution calling Campaigns of disparagement
on national governments to take a That all the major players let fly with
cautious approach on privatising strong criticisms in their submissions
airports. suggests there is a lot at stake in the
Further, the resolution encouraged outcome of the review.
governments to “prioritise the long- The AAA’s submission hit back
term economic and social benefits against the ACCC’s “ill-founded
delivered by an effective airport ahead slurs”, described sections of the
of the short-term financial gains airline industry’s push for change as a
provided by a poorly thought-out “campaign of disparagement”, accused
privatisation”. IATA of leading an “ill-informed
“Airlines had high hopes that global debate” on the topic and
private sector investment and business described the ACCC’s commentary as
acumen would bring benefits,” IATA “inflammatory and misleading”.
director general and chief executive It said policy reform designed
Alexandre de Juniac told delegates in to reduce prices, as opposed to
his opening address on June 4. enhancing efficiency, would “place
“There were some quick wins. future investment at risk”.
But they were outnumbered by The airlines have not been shy
disappointments. As customers of either. As noted earlier, Qantas
many airports in private hands, said Australia’s airports display
airlines have far too many bitter monopolistic behaviour and have
experiences.” been “price gouging” everyone from
de Juniac has said previously the airlines to the cafes that rent retail
the conclusion from three decades space in the terminal to the taxis
of airport privatisation showed it that pick up and drop off passengers
has been a failure, with airports kerbside.
performing better in public hands. And Rex said the examples
shown in its submission “clearly
Regional distress demonstrated” that the “airport
Away from the major capital city owners, councils for the majority,
airports, the Productivity Commission are often misguided, political and
has also heard from the Regional myopic and would not hesitate to
Aviation Association of Australia abuse market power for their self-
(RAAA), which had regional council- serving purposes even if that would
owned aerodromes in its sights. result in long-term damage to the local
The RAAA said “all too often community”.
council-owned regional airports The Productivity Commission is
regard their local airport as a due to release a draft report in 2019.
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