Virgin Blue terminal hopes rise

[Wirraway]

Fri "Australian Financial Review" 11/10/02

Virgin terminal hopes rise
Oct 11
Jane Boyle

Macquarie Airports and Virgin Blue have begun high-level negotiations on new proposals to end a stalemate over access to Ansett's old terminal at Sydney Airport and avoid a drawn-out and costly court battle.

Macquarie and Virgin Blue reopened talks several weeks ago after Federal Transport Minister John Anderson urged the parties to cease their public spat and return to the negotiating table.

A group of Macquarie and Virgin Blue executives met yesterday at the discount carrier's Brisbane head office.

Virgin Blue's head of commercial operations, David Huttner, confirmed Macquarie had put forward new proposals to allow the airline to move into the terminal, known as T2.

"We have had very high level discussions with Macquarie," he said.

"Documents are being looked at back and forth," he said. "If the proposal's interesting we'll look at it."

Neither Virgin nor Macquarie would elaborate on the proposals, and a Sydney Airports Corporation Ltd spokesman said he could not comment.

But Mr Huttner said the airline would be interested only in a proposal that offered the same key terms as an alleged agreement with SACL in April.

Virgin has launched legal action against SACL in an attempt to uphold a deal that it claimed would have allowed it to access up to nine gates in the terminal at a cost of $18 million a year for 15 years.

SACL disputes that such an agreement was reached, and the matter is due to be heard in the NSW Supreme Court in March.

"We are looking for a deal that reflects the key terms of the April agreement both in financial and operational terms," Mr Huttner said.

Virgin Blue has also applied to have domestic terminal services at Sydney Airport declared under the Trade Practices Act, which would take years to resolve but would allow the ACCC to arbitrate on disputes.

Virgin Blue is paying far less at its basic domestic express terminal in Sydney than it would have to pay at T2, where Qantas is believed to be paying a charge of $6.50 a passenger for six gates.

But space constraints at the DET have resulted in long queues for Virgin Blue customers, forced the airline to overhaul its flight schedule for the summer season and limited its ability to expand its fleet.

An agreement on access to T2 could pave the way for a decision on a multibillion-dollar expansion of its fleet to 40 planes, which has been repeatedly deferred, and a public float next year.

However the prospect of a war in the Middle East, which has sparked a sell-off of airline stocks around the world, has cast new doubts over the timing of a float.

[TIMMEEEE]

If it's good enough for everyone else to pay the going rate in the T2 (ex Ansett) terminal then why should VB be any different?

Yeah yeah - we dont all like Macquarie Bank and we hate SACL even more but thats the way it is like it or not.

We know that VB will have to go in there eventually so why dont they just cut the bleeding heart hard done-by bed-wetting crap and just do it.
I doubt that pax will refuse to use VB over a $6 surcharge on a ticket or whatever they chose to slug the punters.

If they were that dead-set keen on being a true discount no-frills carrier then stay in the god-damned shed then.

[Skinny Dog]

Timmeeee, you sound like an opposition pilot who has limited knowledge of the price gouging that goes on amongst service providers and airport operators who are in a monopoly type position. IATA even commented on the problem in today’s Singapore Business times. Maybe it is time for the other user / users to stand up and protest the charges that are proposed by Macquarie Bank / SACL


Iata hits out at profiteering by some airline partners
Many airports, air services not matching cost cutting undertaken by airlines
By
Beth Jinks

(SINGAPORE) The world's dominant airline representative group yesterday hit out strongly at what it labelled as 'profiteering' by its partners - airports, air traffic control and computer reservation systems - who glean their income exclusively from the air travel industry.
Expressing his frustration over the issue, the director general and CEO of the International Air Transport Association (Iata), Giovanni Bisignani told industry leaders here that while some airports - including Singapore's and Hong Kong's - had fairly reduced fees to soften the impact of Sept 11, he was far less complimentary about a number of others.


More strongly than before, Mr Bisignani said the actions of 'unregulated monopolistic suppliers' meant the competitive cost cutting undertaken by airlines was not being matched by partners, arguing running airports was 'not a licence to print money'.
He said many airports and some air services did not understand that the 'world has changed' and that airlines were suffering enormously reduced yields while their partners raked in huge margins.
Citing a recent survey which shows enormous disparity between airlines and partners in their average 2000 and 2001 operating margins - placing airports at 27.6 per cent, select air traffic controllers at 23.4 per cent and the top 150 airlines at just 4.8 per cent - Mr Bisignani declared 'there is structurally something wrong with this situation'.
'We are all in the same industry, yet airports and ATC suppliers are posting record profits and airlines are losing billions and some are facing bankruptcy,' he said, explaining that while the lines offered more service at cheaper fares, new government taxes and fees were increasing the cost of travel.
He again urged governments to introduce regulations to prevent airline being forced to pay for 'inefficiencies' and warned Iata would continue to benchmark the charges and performance of all partners, appealing for transparency, efficiency and value-for-money.
Mr Bisignani also raised Iata's push for a broad-based liberalisation of the aviation industry, particularly with regard to current ownership restrictions and government bail-outs. 'Airlines need to do more to rekindle investor interest. The current ownership and control rules do not allow the access to global capital markets that most other industries take for granted.'
Iata's proposal allows individual states to define their interests, paving the way for 'bi-, multi- or pluri-lateral arrangements' without forcing - or stopping - any state's liberalisation.
'To breathe new life into our industry, we need a level playing field with other industries in terms of how we do business,' he said.
'This should be one of the many lessons learnt from September 11.'
Among other lessons, Mr Bisignani said this year the aviation industry globally was still expected to lose between US$10-US$12 billion - on top of last year's US$18 billion losses and the loss of 400,000 aviation-related jobs.
He warned the hope of a 'small profit in 2003 on international scheduled traffic' was highly vulnerable to the outcome of the Iraq standoff, with massive hikes in oil prices and the devastating impact of war on passenger numbers two areas of extreme concern.
Iata figures show the strongest aviation recovery in Asia Pacific, with Singapore experiencing a 5 per cent traffic growth over 2001.