Airports accused of fee gouging

Qantas has accused Australian airports of “blatant profiteering” and has told the Productivity Commission that current regulations fail to prevent airports from “gouging” airlines on fees charged by using runways, terminals and other infrastructure.

Qantas claims these fees are “world-leading” and that new rules are needed to stop them abusing their monopoly positions.

“Lack of effective regulation has opened the door to blatant profiteering,” said Qantas group executive for government and regulatory affairs, Andrew Parker.

“It is the family visiting the Great Barrier Reef for the first time, the business traveller flying from Melbourne to Sydney for meetings, and the dairy farmer sending fresh milk to the Chinese market that ultimately pay for the high and rising costs.”

Qantas says that, since 2015, it had cut its own operating costs by four per cent (excluding fuel), but the fees it paid to airports had risen 6.5 per cent during the same period.

“While we negotiate successfully with other suppliers to reduce costs and ultimately deliver better airfares … charges by Australian monopoly airports are largely non-negotiable,” said Mr Parker.

According to the International Air Travel Association, in 2015, airports worldwide enjoyed an average earnings margin of 55 per cent, while Sydney Airport had an earnings margin of 83 per cent, Melbourne 75 per cent, Brisbane 74 per cent and Perth 66 per cent.

Qantas says that reducing airport fees by $4 per passenger would save airlines $648 million a year, and those savings could then be passed on to consumers.

The total number of passengers passing through Australian airports has more than doubled between 2002 and 2017, from 76 million to 159 million. Qantas believes this increase in passenger volume should translate to lower fees, but this has not happened.

“Charges levied by airports bear little relation to passenger volumes, geography, type of traffic or level and quality of services and facilities,” Qantas stated in its submission to the Productivity Commission.

“The only discernible pattern is a quest for excessive returns by Australian monopoly airports.”

Qantas says the Australian Competition and Consumer Commission only monitors profits and charges based on earnings from aeronautical operations. It believes a better measure would be to also consider the money airports make from retail spaces and from car parking, as is done in the UK.

Australia’s major airlines are now lobbying for extra power to dispute airport fees.

Do you think that if airports lowered their fees, those reduced costs would be passed on to you?

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Written by Leon Della Bosca

Leon Della Bosca has worked in publishing and media in one form or another for around 25 years. He's a voracious reader, word spinner and art, writing, design, painting, drawing, travel and photography enthusiast. You'll often find him roaming through galleries or exploring the streets of his beloved Melbourne and surrounding suburbs, sketchpad or notebook in hand, smiling.
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