Wirraway
30th Jan 2004, 01:05
Fri "The Australian"
Virgin fury on airport U-turn
By Steve Creedy
January 30, 2004
VIRGIN Blue was last night reviewing appeal options after the National Competition Council backflipped on its draft decision to "declare" Sydney Airport and allow its aeronautical and terminal charges to be regulated.
The airline was "extremely disappointed" with the decision but it would not affect forecasts of a $150 million profit in 2003-04 because it was already paying the increased charges.
"Today's decision clearly leaves the NCC open to rigorous examination as it completely contradicted a number of their earlier findings," Virgin spokesman David Huttner said. "These inconsistencies should leave them exposed if we choose to appeal."
The NCC initially recommended the airport be declared, a move which would have allowed Virgin to negotiate fees and lodge disputes with the Australian Competition and Consumer Commission.
Virgin is opposed to paying a per-passenger fee for using Sydney Airport facilities and believes charges should remain on a per aircraft basis.
But NCC changed its mind after reviewing submissions and extra information related to its draft recommendation, which was strongly opposed by airports around the country.
The commission concluded the threat of regulation and the need to maintain passenger numbers provided a strong enough incentive for SACL to maintain competitive prices.
It was not convinced that even big increases in airside charges, which were a small proportion of airline costs, would force airlines to reduce services.
The revised decision let the federal Government refuse the application without going against the NCC.
The Parliamentary Secretary to the Treasurer, Ross Cameron, said he was not satisfied Virgin's application met all six criteria necessary for a declaration.
He said Sydney's demand projections, the lack of short- to medium-term capacity constraints and the high costs of establishing an airport meant building a competing facility was not economical.
But he was not satisfied that declaring the airport would promote competition or that it was in the public interest.
Sydney Airport chief execu tive Max Moore-Wilton welcomed the decision and said it confirmed the Government's policy of light-handed regulation of major airports. He said SACL would continue to develop a co-operative commercial relationship with Virgin and the airport was committed to supporting an open, competitive environment.
The setback came as Virgin yesterday launched its Pacific Blue offshoot with an inaugural flight between Christchurch and Wellington.
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Virgin fury on airport U-turn
By Steve Creedy
January 30, 2004
VIRGIN Blue was last night reviewing appeal options after the National Competition Council backflipped on its draft decision to "declare" Sydney Airport and allow its aeronautical and terminal charges to be regulated.
The airline was "extremely disappointed" with the decision but it would not affect forecasts of a $150 million profit in 2003-04 because it was already paying the increased charges.
"Today's decision clearly leaves the NCC open to rigorous examination as it completely contradicted a number of their earlier findings," Virgin spokesman David Huttner said. "These inconsistencies should leave them exposed if we choose to appeal."
The NCC initially recommended the airport be declared, a move which would have allowed Virgin to negotiate fees and lodge disputes with the Australian Competition and Consumer Commission.
Virgin is opposed to paying a per-passenger fee for using Sydney Airport facilities and believes charges should remain on a per aircraft basis.
But NCC changed its mind after reviewing submissions and extra information related to its draft recommendation, which was strongly opposed by airports around the country.
The commission concluded the threat of regulation and the need to maintain passenger numbers provided a strong enough incentive for SACL to maintain competitive prices.
It was not convinced that even big increases in airside charges, which were a small proportion of airline costs, would force airlines to reduce services.
The revised decision let the federal Government refuse the application without going against the NCC.
The Parliamentary Secretary to the Treasurer, Ross Cameron, said he was not satisfied Virgin's application met all six criteria necessary for a declaration.
He said Sydney's demand projections, the lack of short- to medium-term capacity constraints and the high costs of establishing an airport meant building a competing facility was not economical.
But he was not satisfied that declaring the airport would promote competition or that it was in the public interest.
Sydney Airport chief execu tive Max Moore-Wilton welcomed the decision and said it confirmed the Government's policy of light-handed regulation of major airports. He said SACL would continue to develop a co-operative commercial relationship with Virgin and the airport was committed to supporting an open, competitive environment.
The setback came as Virgin yesterday launched its Pacific Blue offshoot with an inaugural flight between Christchurch and Wellington.
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