Airport fee rises ‘choking growth’
THE nation’s airline lobby group has called for Australia’s major international airports to slow the aggressive ramping-up of fees, which it claims risks “choking” future growth.
The Board of Airline Representatives of Australia, which represents 29 international *airlines operating in the country, said prices charged by the *nation’s major international *airports had doubled in real terms over the past 12 years, from about $10 to $20 a passenger.
In a report into infrastructure of the nation’s major airports, to be released today, BARA says charges at Sydney and Brisbane airports are now “well above” the Asia-Pacific and European averages. “If the industry is to maintain airfare affordability, it is not possible to sustain the trend of rising investment levels funded through continued increase in airport prices,” the BARA report says. It says the industry needs to ensure the cost of meeting growth does not end up chocking the very growth it is intended to foster.
The report highlights the very high investment returns being delivered to the nation’s airports, with pre-tax returns soaring from below 6 per cent annually in 2003 to above 12 per cent at present and averaging 11 per cent over the past five years.
A key to the growth in that revenue was the government’s 2002 moves to *remove price controls set by the Australian *Competition & Consumer Commission and *replace them with “light-*handed” economic regulation, placing more control in the hands of operators.
The result of this *light-*handed regulation has led to *unnecessary “protracted negotiation processes between international airlines and airport operators”, BARA says.
The report comes after the ACCC findings last week that the nation’s four *biggest *airports were continuing to ramp up fees despite most *delivering no real increase in *service quality.
The ACCC, which delivers an annual report on the performance of the Brisbane, Melbourne, Perth and Sydney airports, found all but Brisbane had delivered only “satisfactory” performance over the year to June 2013.
Brisbane’s average quality of service was lifted from satisfactory to “good”. Sydney delivered the worst quality of service, *despite charging the highest “aeronautic *revenue” per *passenger at $15.53.
The lobby group for the Australian Airports Association challenged the ACCC’s findings and said they presented a *“historical snapshot” as they *related to data that was already nine months old. “The ACCC’s findings provide an historical snapshot of the state of our major airports, given the extremely dynamic nature of the aviation industry and the ongoing investment being made in better airport infrastructure,” said AAA chief executive *Caroline Wilkie.
BARA notes the ACCC’s *service quality monitoring has been criticised by the AAA.
“It is notable, however, that the industry has not developed more sophisticated service quality measures and included them in agreements with airlines,” the BARA report says.
The airline body calls for the government to commission research into the productivity of the nation’s aviation industry and the “rate of return across *infrastructure providers”.