[Peetwo]

Alphabet allegiances tested by PC airport inquiry - 

It would appear that the current Productivity Commission inquiry into the economic regulation of airports is creating much angst and division within the ranks of the major aviation industry alphabet groups...  

Here is a short rehash of where the Airports vs Airlines bun-fight currently sits:

McDo'Naut does naut on airports vs airlines war - Part IV

Via the Oz today:

Airport probe exposes rift

ROBYN IRONSIDE

The Productivity Commission inquiry into the economic regulation of airports has exposed tensions between airlines and airports.

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Inquiry exposes tensions between airports and airlines

The Productivity Commission inquiry into the economic regulation of airports has exposed considerable tension between airlines and airports in Australia.

Almost 50 submissions have been lodged, some running to more than 100 pages.

While airlines say airports are exploiting their monopoly status by price-gouging, airports claim airlines are the real powerbrokers and are “overstating” the impact of their fees on airfares.

With billions of dollars in capital improvements to back them up, the monitored airports of Sydney, Melbourne, Brisbane and Perth have some credibility.

But as anyone who has used an airport would know, large terminals can mean high costs — for parking, taxis, food, drinks, retail items and trolleys — so it’s not much of a stretch to believe airlines are being ripped off as well.

In its submission to the inquiry this week, Qantas highlighted a couple of incidents as evidence of the need for more regulatory oversight of airports. These included sums of $18,000 and $64,000 charged by Canberra Airport in landing fees for Qantas aircraft forced to divert to the terminal because of bad weather.

The national carrier also called out Townsville Airport, with which it has been involved in protracted commercial negotiations, for positioning seats in such a way as to inconvenience passengers heading to the Qantas lounge.

Along with Virgin Australia, Air New Zealand and Regional Express, Qantas wants “faster and fairer access to independent arbitration to resolve disputes”.

It says this will encourage and incentivise airports to behave competitively during commercial negotiations to deliver lower ­prices and greater efficiencies, leading to innovations for passengers and users.

The Australian Airports Association, representing more than 300 airports and aerodromes, believes the present light-handed regime is working well and questions the need for change.

The AAA says since 2002, members have invested more than $15 billion in infrastructure, of which about $10bn has been in aeronautical assets.

“These investments have been necessary to improve safety, sec­urity and amenity for passengers, as well as provide the necessary capacity to allow total airport passenger throughput to grow from 76 million in 2002 to 159 million in 2017,” the AAA ­submission says.

In the airports’ court is the Airports International Council and the Australian Airports Investors Group, both of which believe changes to the present system would inhibit airports’ ability to invest in infrastructure.

The airlines have the Inter­national Air Transport Association onside in their calls for a more effective monitoring system. Other groups, including the Tourism and Transport Forum, the Australian Chamber of ­Commerce and the Business Council of Australia, are more concerned with easing constraints on the nation’s major gateway of Sydney Airport, particularly flight movements and night-time operations.

TTF’s submission says the curfew restrictions in Sydney have failed to take into account the growth in quieter aircraft.

The federal Department of Infrastructure, Regional Development and Cities says its preliminary view is that the case for changing the current “light-handed” approach has not yet emerged, but it will await the outcome of the inquiry before forming a final view.

Either way, the inquiry is shaping up to be one of the most significant for the aviation industry since the privatisation of airports in the 1990s.

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McDo'Naut does naut on airports vs airlines war - Part V

In the Oz today, Rex takes a shot at the airports...  

Rex hits out at airports

ROBYN IRONSIDE
Regional Express has taken aim at airports for adopting a ‘build it and they will come’ mentality at a significant cost to carriers.

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Australia’s largest regional airline has taken aim at airports for adopting a “build it and they will come” mentality at a significant cost to carriers.

In a scathing submission to the productivity commission inquiry into the economic regulation of airports, Regional Express (Rex) Airlines said many airports were undertaking upgrades to accommodate larger aircraft, without any real demand for those ­services.

In the case of Orange airport, the submission said a $19 million terminal and runway upgrade had resulted in the airport head tax per passenger rising 15.2 per cent, from $15.50 to $17.85. But the largest aircraft using the airport continued to be Saab 340s, with “not an A320 or B737 in sight” and passenger numbers stagnant.

“Orange airport is one of the best examples of airports that are comfortably making a tidy surplus from airport revenue and having a good reliable service …. who then started having aspirations for jet-loads of passengers based on wishful projections by consultants hired precisely for churning out such rosy outcomes,” the submission said.

Rex also singled out Mildura, Wagga Wagga, Dubbo, Mount Gambier, Kangaroo Island and King Island airports.

Melbourne airport was described as “a big cheat” because of its practice of “accepting 61 movements an hour on a runway that can only handle 50 movements”.

“Rex cannot state strongly enough that the actions of (Melbourne airport) are an extreme abuse of its market power and are both morally and ethically reprehensible,” the submission said. “Melbourne Airport should also be directed to compensate all the carriers who have suffered damages as a result of its behaviour.”

Like other airlines, Rex wants more effective regulation of airports, and the ability for the ACCC to intervene when negotiations for new commercial agreements stall.

“Rex is strongly of the belief that regional airports need to be regulated to dissuade the local councils from acting in a myopic manner that could end up destroying the local community,” the airline’s submission says.

Rex submission link:  https://www.pc.gov.au/__data/assets/pdf_...rports.pdf

   
It is therefore with interest that I note the following Ironsider article in today's the Oz...
https://www.theaustralian.com.au/busines...6fbf504dfb

Airports snub for Qantas, Jetstar

ROBYN IRONSIDE

It is Australian airports’ biggest customer but Qantas has been left off the guest list for the annual Australian Airports Association conference.

Due to be held in Brisbane next week, the conference will hear from 95 aviation industry leaders over four days.

Among the featured speakers are Virgin Australia group executive Rob Sharp, Civil Aviation Safety Authority chief executive Shane Carmody and Australian Transport Safety Bureau chief commissioner Greg Hood.

Deputy Prime Minister ­Michael McCormack will also take part, along with dozens of airport managers and other stakeholders, but neither Qantas nor Jetstar are represented ­despite carrying 65 per cent of domestic passengers, and 26 per cent of international passengers. At last year’s conference, in Adelaide, Qantas executive Andrew Parker spoke as well as Mr Sharp, and in previous years chief executive Alan Joyce has delivered a keynote address.

Qantas confirmed it had not been invited to make a presentations at the conference but ­declined to comment on the ­apparent snub. The AAA also refused to comment on the guest list other than to say it was a packed schedule for the conference.

This comes at a time of high tension between airlines and airports due to the Productivity Commission inquiry into the economic regulation of airports.

Submissions to the inquiry have exposed some deep-seated animosity including allegations of corporate bullying by Qantas and of price gouging by airports.

Several airports used their submissions to call out Qantas for refusing to pay increased fees, ­including Darwin, Alice Springs, Gold Coast and Townsville. In its submission, the AAA says Qantas sought to restrict airports from encouraging competition against them. “Qantas is able to procure these outcomes because of its dominance in relation to the aeronautical revenues of most airports, coupled with its ability to avoid payment of charges it does not agree with,” AAA says.

AAA chief economist and former Productivity Commission commissioner Warren Mundy will address the conference on the “truth about charges, profits and airfares”.

In its submission, Qantas takes aim at airport charges, pointing out that while airfares have fallen by nearly 40 per cent in real terms over the past decade, the four major airports have earned an ­average 25 per cent more per passenger. The airline is seeking more effective regulation of airports to allow for a third party to help negotiate agreements.

“Under the current ineffective regulatory regime, the only leverage an airport user has is the possibility of withdrawing services from an airport,” Qantas said.

“In reality, airlines cannot afford to make good on that possibility for reasons including loss of network connectivity, loss of business, claims by passengers with bookings, loss of revenue … and competition from other entrants.”

MTF...P2