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Alan Joyce and Paul Scurrah NPC address: 18/09/19

Just catching up but if you have an interest in the Oz Aviation industry this is definitely worth the time to watch...  

Alan Joyce and Paul Scurrah

An historic joint address by the CEOs of Australia's major domestic airlines. Qantas CEO Alan Joyce and Virgin Australia CEO Paul Scurrah highlight the contribution airlines make to the Australian economy.

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Broadcast 12:30pm Wed 18 Sep 2019. Published 3 days ago, available until 1:30pm on 18 Oct 2019.

Ref: https://iview.abc.net.au/show/national-p...ub-address

 
And the AFR's summary:

Airport profits 'out of kilter', say Qantas, Virgin

Andrew Tillett Political Correspondent

Sep 18, 2019 — 12.01am

Reducing airports' passenger charges would lead to cheaper airfares for consumers and deliver a significant lift in productivity, the chiefs of Qantas and Virgin Australia will say on Wednesday as they combine to pressure the Morrison government to act on their monopoly.

But the airports counter it is the airlines being greedy and anti-competitive, with Qantas enjoying bumper profits that outstrip what the biggest four gateways made collectively last year.

Airlines and airport operators are at loggerheads before the release next month of a Productivity Commission inquiry into the regulation of airports.

Qantas chief executive Alan Joyce and Virgin Australia counterpart Paul Scurrah will address the National Press Club on Wednesday to argue airports are charging consumers more than they should.

"As a business person, I’m not suggesting for a minute that airports don’t deserve to turn a profit. Of course they do. But with margins like theirs, there is clearly something out of kilter," Mr Joyce will say according to speech notes.

"The difference between Qantas and the airports is that we actually face real competition. We compete every single day with Virgin, Rex, Air New Zealand and in some cases dozens of airlines for customers. We compete on the price of every single seat of every flight.

"And it’s this competition which ultimately sets airfares. So, if there is a cost advantage, history shows that airlines will use it to sharpen fares. That’s why they’ve dropped so much over the past 10 years."


Mr Joyce will say there should be a "straightforward dispute resolution" system to act as a check against the airports' monopoly, saying deadlocks between carriers and airports had cost millions of dollars over the years.


'The status quo isn’t working'


"Clearly, the status quo isn’t working. Fees and charges from monopoly airports are excessive and damaging the economy," Mr Joyce will say.


"And airports continue to reap super profits because there is no real threat
of intervention to moderate their behaviour."


Mr Scurrah, who assumed the top job at Virgin in March, will say airports are generating profit margins that are "grossly inflated" because of their pricing power.


He will say an arbitration model is fair, not one sided and will drive economic growth, not just for airlines but tourism operators, importers and exporters


"It seems hard to argue that Australian travellers, and the economy more broadly, should have to pay the price of a system which prevents airport customers from negotiating fair and reasonable deals," Mr Scurrah will say.


"Meanwhile, airports have become less productive despite the rising charges.


"With the government’s ambitious, productivity-boosting agenda, the airlines and other airport users shouldn’t be expected to do all the heavy lifting in the aviation sector."


Self-interest


But Australian Airports Association chief executive officer Caroline Wilkie accused the airlines of acting in self-interest and jeopardising $20 billion in investment in airport upgrades.


“This isn’t the first time we’ve seen this; Qantas was down in Canberra in 2014 asking for a handout from the government and since then they’ve made $6 billion in profit," she said.


"In the last year alone, Qantas made more profit than the four major Australian airports combined.


“Qantas and Virgin want to squeeze competition out of the market to entrench the domestic duopoly and they know that’s exactly what will happen if they turn the screws on airport investment.”


Australian Competition and Consumer Commission chief Rod Sims said airports were effectively unregulated monopolies and he had been proposing for some time a negotiate-arbitrate regime.

"That would give the airlines, be they Qantas, Virgin or the smaller ones, the ability to negotiate with the airports, and if they don’t get the deal they want, the right to arbitration. If you like, it would even up the bargaining power," he told the ABC.

MTF...P2