Big news for airlines may mean lower fares

Big news for Australian airlines that will hopefully translate to lower fares.

Big news for airlines may mean lower fares

Australian carriers will save tens of millions of dollars a year, after Airservices Australia announced a first-ever reduction in aviation charges for airlines.

This is big news for Australian airlines that will hopefully translate to lower fares for passengers.

As of 1 July, AA reduced aviation charges by two per cent, thanks to productivity improvements and cost-saving measures at the national navigation service provider.

The two per cent reduction will be subtracted from aviation costs that have already been frozen since 2015.

“Not only has Airservices Australia frozen the cost of air-traffic control services since 2015, they have also been able to identify productivity improvements resulting in cost savings that will now be passed on to their airline customers,” said IATA Asia Pacific regional vice-president Conrad Clifford.

At a time when airlines are facing a deteriorating business environment, with rising fuel prices and a substantial weakening of world trade, every cost-saving opportunity matters.”

The annual savings for carriers should be around $20 million a year.

“I am very proud of the fact that Airservices is in a position to support the aviation sector in Australia, both through operational excellence and now through lower costs,” said Airservices chief Jason Harfield. 

Deputy Prime Minister Michael McCormack, who is also Minister for Infrastructure, Transport and Regional Development, said the price cuts would “go some way to help keep the cost of operating aircraft in Australian airspace as low as possible”.

“It’s a credit to Airservices for providing a world-class service to Australian aviation at the highest safety and operational standards whilst reducing costs,” he said.

Are you hopeful these savings will be passed on to passengers?

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    COMMENTS

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    Paulo
    6th Jul 2019
    11:27am
    Cheaper airfares? When pigs fly!
    Polly Esther
    6th Jul 2019
    11:59am
    sad sack

    6th Jul 2019
    12:22pm
    "..big news for Australian airlines that will hopefully translate to lower fares for passengers."??? Great news for Airlines, but only a "hope" for lower fares? These productivity savings by a Govt organisation MUST be passed on to passengers. Strange that McCormack's comment only focuses on the benefit for airlines - shows that he DOES NOT expect it to be passed on. Also, if it is passed on, watch out for the "GST effect" as I called it then - the businesses raise the prices well before passing on the subsequent cuts, effectively neutralising the benefits for customers.

    This is where our Govts (BOTH Major parties) repeatedly fail, as both are in the pockets of big business. Federal ICAC and stopping big (say more than $1,000) donations from businesses to political parties should be a priority.
    pedro the swift
    6th Jul 2019
    2:03pm
    George, What makes you think Airports are gov. organizations. Most are privately owned and many by foreign companies so why should they reduce costs.
    Anonymous
    6th Jul 2019
    9:09pm
    I don't think you understood my comment at all, and also I never talked about Airports as this article is not about them - I know they are privately owned.

    Airservices Australia is a Govt organisation - the "national navigation service provider", who provides these services to airlines and bills "aviation charges" to the airlines.
    The article says Airservices Australia is going to reduce these charges to the airlines, and the point is who should benefit when such a Govt (taxpayer) owned organisation reduces costs - the airlines (for bigger bonuses for people like A.Joyce) or you & me (passengers).
    red
    7th Jul 2019
    12:54pm
    I a not convinced that the airlines - like the banks will pass on any cost savings


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