21st Sep 2018
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Customers paying the cost of airport fee gouging
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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    COMMENTS

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    Concerned
    22nd Sep 2018
    6:10am
    This would be Qantas who have passed on their profits to staff!
    MICK
    22nd Sep 2018
    9:30am
    Actually the CEO of Qantas.
    Leon is way off the mark here. Airports cost a motza to run so how is charging a fee "gouging". If you want to talk about gouging then think about last year's pay packet for Alan Joyce: $22 million. That's right, no mistake. Work out what that adds to every ticket Leon.

    You might like to write a story about CEO remuneration Leon and the cartel which allows these bastards to put up their pay to whatever level they like.
    Nerk
    22nd Sep 2018
    7:13am
    Are passengers still paying the air new zealand levy that was bought in a few years ago to pay for crew superanuation?
    David
    22nd Sep 2018
    8:07am
    That's the pot calling the kettle black.....Qantas is price gouging itself by doubling their ticket prices for AFL Demons fans to travel to Perth for the preliminary final.
    TREBOR
    22nd Sep 2018
    8:29am
    SNAFU - flog off your services and utilities and naturally - at the end of the line - the consumer pays extra to fund the happy profiteering of the organisation to which you flogged it off.

    Been telling yez about it for years.... we need a good hanging in the halls of government... a fair trial for the privateers .. a fair hearing.. then a fair hanging....

    And before the Philistines start - NO - we, the people did NOT have a say..... we were handed this manure pile without a by your leave by either of the two major parties of The Tag Team who are so poor in government that we choose the other over and over, and are thus forced to accept their dismal overall policy thrusts.

    Such things should always be placed in the hands of the people....

    I vote NO!
    TREBOR
    22nd Sep 2018
    8:35am
    ACCC? No balls in the game as usual.. Malbun won last night in the NRL - whoo hoo for my tipping.
    Ritza
    22nd Sep 2018
    8:47am
    BTW Qantas did you drop the fuel levy ?
    Can we pay for tickets any other way than credit card with accompanying fee ?
    Oh and booking flight with accrued points.....
    Really Alun ????? Suck it up buttercup. We do
    ekbg2002
    22nd Sep 2018
    9:33am
    Why don't the airport cater for disabled people preferring to put it onto individual airlines. So far as I am concerned Tullamarine is the worst airport if you are disabled. Airport staff should transfer a disabled person in wheelchair, from point of entry to plane, once on plane, then airline takes over, but no they put it as the responsibility of the airlines who don't have resources. Compare to shopping centre. You can hire wheelchair for free and go into any shop. Each shop doesn't individually require you to use their wheelchair. Wake up Tulla, get with the times and help people, don't tell me you aren't making huge profit.
    KSS
    22nd Sep 2018
    10:34am
    Of course there is price gouging at airports, everything from car parking to coffee comes at a premium price. Why? Because as a captive audience you have no alternative. Try buying a last minute pack of Tim Tams and you'll be up for $7 on 'special' at Sydney airport! Why? Because they can and the rents vendors have to pay to the airport owners are excessive but again there is no other option.

    Having said that, Qantas are not exactly paragons of virtue either. They are generally the last airline I choose simply because they can be up to double the cost of any other comparable airline but service is certainly not double the quality. How is this justified? Because the CEO is over paid and over here!

    BTW I don't buy Tim Tams - ever! Anywhere!
    Cyril
    22nd Sep 2018
    12:22pm
    Lower fees to airlines would mean they could pass the savings on to consumers, yeah right and there is a Santa Claus....
    Sea Dog
    22nd Sep 2018
    3:40pm
    anytime macquarie bank gets its fingers into anything there is profiteering and price gouging.

    22nd Sep 2018
    9:42pm
    Rubbish
    My Sydney airport shares have only seen a modest capital gain and the dividends are average. Perhaps they not charging airlines enough
    Sea Dog
    23rd Sep 2018
    8:09pm
    you should ask them where all the money goes then
    islandguy
    23rd Sep 2018
    10:34am
    The tourism industry would benefit hugely from reduction of outrageous charges for airport terminal infrastructure, parking, food and retail. Brisbane airport recently advertised how proud it was of reduction in parking fees. Pity they're still too expensive to consider using.
    Jim
    23rd Sep 2018
    11:40am
    Some very good arguments here regarding Qantas and their profiteering and the pay their executives get, but isn’t the topic about the profiteering of the airports, it’s my understanding that Sydney parking charges are the highest of any airport in the world, I don’t know if it’s true, but if it is why is it? I picked my daughter up from Sydney last week, the cost was $16 and we were there for about 40 minutes, I have just returned from the UK the parking charge at Heathrow was £7 for about the same amount of time so there doesn’t seem to be a lot of difference. I recall when I first started to travel in the 60’s the cost at airports for a drink in the bar was far more expensive comparatively than it is today, so are the airports gouging less now?
    Londoner
    23rd Sep 2018
    10:04pm
    I'm sure that you enjoyed paying the cheaper prices then you would have had to in Australia for the same thing. £7 is actually around $12.60, not $16, and one would ask why you were taking a car to Heathrow when the airport is served by a fabulous public transport system that is fast, reliable and cheap (e.g. no airport station access fee for one) if you know what you're doing and runs during the hours that the airport is operating.
    Also, food and drink are usually reasonable given that it's an airport and the airport doesn't charge (to my knowledge) for the use of a luggage trolley.
    Name me a major Australian Airport that's the same and doesn't practice the saying of robbing the poor to give to the rich.
    Londoner
    23rd Sep 2018
    9:36pm
    I do have a laugh when Australian companies try to disguise the exorbitant prices they charge by pointing a finger at others as the reason.
    I've yet to find out why the flight ticket price for flying out of Australia is generally several hundred, sometimes thousands (depending on cabin class), of dollars more expensive than a ticket price for flying into Australia using the same airline, cabin class, dates and times.


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