Responding to the draft report on Monday, lobby group Airlines for Australia and New Zealand (A4ANZ) said the PC’s approach was based on “erroneous assumptions”, contained “fundamental flaws” and that its rejection of an arbitration body was “completely implausible”.
“This draft report falls well short of what we should all expect from the PC,” said Graeme Samuel, chairman of A4ANZ and the former chair of the ACCC.
“Access to arbitration when negotiations break down should be provided for all airports with monopoly characteristics.
“This is standard, commercial practice. Why should airports be treated any differently to other infrastructure in Australia?”
A4ANZ said the PC had ignored evidence, including that monitoring by the Australian Competition and Consumer Commission (ACCC) had failed to stop monopoly behaviour and price gouging; that the National Access Regime, which governs third-party access to infrastructure, was no longer a credible threat to airports; and that airlines and airports did not have equal bargaining power in negotiations.
While it rejected calls for new regulation of the airports, the PC did note that Sydney and Brisbane airports charged some of the highest fees in the world for international carriers to use their runways and terminals.
The PC said the airports should give the ACCC more details about those fees for the watchdog’s annual report on their operations, to keep them in check.
The draft report also raised concerns about the fees airports charged taxis, buses and hire car operators to drive up to their terminals.
However, car-parking facilities, which operate on profit margins of up to 70 per cent, were not gouging customers, the PC said, when considering that space available around the terminals was limited and in demand.
The airport lobby group, the Australian Airports Association, said in its follow-up submission that it welcomed the draft report and the rejection of the airlines’ claims.
“The commission has robustly analysed the evidence placed before it, and also that which it has sourced itself, and has reached well-informed conclusions,” the AAA said.
The commission is holding public hearings this week. The final report will be handed to the federal government in June.