[Peetwo]

More on A4ANZ vs Airports war -  

Via Oz Aviation (ps congrats AA on new format for the website -  ):

Passengers “paying the price of airport privatisation” says A4ANZ

written by Jordan Chong May 25, 2018


Australia’s airlines say light-handed airport regulation is not working. (Seth Jaworski)

Light-handed regulation of Australia and New Zealand’s airports has been ineffective at protecting consumers from higher charges due to their monopoly power, a report says.

The findings are in the “Performance and Impact of Australia’s Airports Since Privatisation” report prepared by Frontier Economics and commissioned by recently-formed lobby group Airlines for Australia and New Zealand (A4ANZ).

The report, released at Parliament House in Canberra on Thursday, called for changes to the current way airports are regulated, which has been in place since the start of the century.

“Australian passengers and our economy are paying the price of airport privatisation in the absence of appropriate constraints on monopoly power,” the report says.

“More effective regulatory pressure is required to prevent excessive profits by airports and return more value to consumers and the economy.

“Monopoly infrastructure operators have the ability to raise prices above a level that would prevail in competitive markets and little incentive to improve services above a minimum standard of service quality, to the detriment of economic efficiency and the living standards of consumers.”

A4ANZ’s membership comprises Australia’s and New Zealand’s major airlines – Air New Zealand, Jetstar, Qantas, Regional Express, Tigerair Australia and Virgin Australia.

The organisation was formed in March 2017 to represent the airline industry’s interests and lobby against including lobbying efforts to fight infrastructure constraints, high taxes and other matters of aviation policy.

The report cites figures from IATA Economics, the independent economic consultancy of the International Air Transport Association, that passengers would have saved $180 million through lower charges if airport passenger charges had remained at their 2008 levels instead of increasing over the past decade at the four Australian airports of Brisbane, Melbourne, Perth and Sydney.

A4ANZ chief executive Alison Roberts said the report showed airports have been using their monopoly position to earn excessive profits “in the absence of a credible regulatory threat”.

“This is a trend that began over a decade ago and shows no sign of stopping,” Dr Roberts said in a statement.

“A4ANZ is not a lone voice in suggesting that our economy could benefit from a change in the regulatory settings for airports, to mimic the effects of a competitive market.

“As others have noted, Australia is lagging behind the rest of the world in protecting air travellers from monopoly airports.

“Our report makes it clear that it’s time for Australia to catch up and ensure our regulatory system can do what it is supposed to, which is to protect consumers from monopolies.”

The report put forward a “negotiate-arbitrate” model as one that would be “most likely to result in genuine commercial negotiations between airlines and airports to effect fair outcomes for airport users”.

Under the proposed scheme, the ACCC would give consideration to “final offer arbitration”, a method the report said had been used in various sectors in Canada and the United States.

“The final offer chosen by the arbitrator binds the parties to the dispute and in most applications, forms the basis of an agreement between them for the provision of services,” the report said.

“In Australia, the adoption of final offer arbitration would be unlikely to require legislative direction but could be adopted by the ACCC through an amendment to its guidelines, providing an indication to the parties as to its approach to arbitrations.”

“With the arbitrator selecting one party’s final position (or parts of each party’s final position) without the possibility of compromise or variation, the risk of arbitration is raised and therefore, increases the incentives for the parties to bargain and negotiate on reasonable terms prior to the regulator’s involvement.

“In other words, creating a highly credible threat of intervention.”

A4ANZ chairman Graeme Samuel said it has been consumers that have lost out from the current setup and change was in everyone’s interests.

“In the absence of an effective regulatory regime, airport privatisation has ultimately resulted in higher costs for both airlines and passengers,” Prof Samuel said.

“Consumers are the ones who ultimately lose in this scenario, whether it’s the exorbitant landing and service fees paid by airlines on the passenger’s behalf, their car parking fee, taxi surcharge, or the bottle of water they buy in the terminal.

“No one is suggesting the airports don’t deserve to make a decent profit. But the current levels of profit are excessive, and it’s ultimately being paid for by the travelling public.

“Given the importance of air travel to the national economy, A4ANZ and its member airlines are committed to maintaining positive, constructive commercial relationships with airports.”

The A4ANZ commissioned report follows the latest release of the Australian Competition and Consumer Commission (ACCC) Airport Monitoring Report for 2016/17, which said average revenues per passenger had increased by 25.9 per cent in real terms across the four airports of Brisbane, Melbourne, Perth and Sydney over the past decade.

Further, the ACCC report said Brisbane and Perth were rated “good” in terms of quality of service, while Melbourne and Sydney were given a “satisfactory” rating in that category.

Australian Airports Association backs current regulation regime

The industry group representing the nation’s airports, the Australian Airports Association (AAA), said in response to the Frontier Economics report that Australian airports had spent $11.5 billion spent on airport improvements over the past 10 years to increase efficiency, enhance the experience and attract new services.

“Attracting international airlines and growing competition has been key to the rise of the tourism industry as a power house of Australian small business and regional economies,” AAA chief executive Caroline Wilkie said in a statement.

“The current regulatory regime for Australian airports has served airlines, airports, Australian and overseas travellers and the broader economy extremely well.

“Airports have enabled significant economic growth since privatisation, giving passengers access to more of the world than ever before and supporting our growing visitor economy.”


A4ANZ says airports have been using their monopoly position to earn excessive profits.

Canberra Airport incident highlights tensions that can exist between airports and airlines

The tension that can exist between an airline and an airport was in sharp focus earlier in May when reports emerged of a March 2017 incident where a Qantas Boeing 737-800 had been delayed from departing Canberra Airport after diverting there while en route from Auckland to Sydney due to weather.

Qantas claimed the incident was Canberra Airport “essentially ransoming an aircraft full of passengers on the tarmac by parking a car behind it”.

Canberra Airport labelled the claims that aircraft and the 170 odd people on board were held hostage until a diversion charge was paid “absolute baloney”.

The reporting of a March 2017 diversion more than a year after it occurred came amid Canberra Airport’s efforts to seek an improvement in the number of flight cancellations on key trunk routes from the nation’s capital to Brisbane, Melbourne and Sydney.

The airport, owned by Terry Snow’s privately-held Capital Airport Group, has been vocal about the high rate of cancellations, even calling for the government to become involved.

In late 2017, the airport announced an incentive payment for airlines to try to get the percentage of cancelled flights down close to the national average, as measured by the Bureau of Infrastructure, Transport and Regional Economics (BITRE).

Next from the other Aunty:

Graeme Samuel speaks to The Business
4 days ago 6:02 

•Episode home•Series home•Public Feed

Australians are being gouged by under-regulated monopolistic airports abusing their market power, according to former competition watchdog boss Graeme Samuel. Airlines are demanding the government regulate airports to bring down costs which they estimate are increasing ticket prices by 10 to 20 per cent for the premium airlines.

And a Skynews version off Twitter:

.@A4ANZ Chairman Graeme Samuel says monopolists are rarely efficient because they don’t have to be and attributes their profits to competition.

'Sydney and Auckland airports are the highest profitability airports in the world.'

MORE: https://bit.ly/2GLGBvX   #Ticky

Again via the ABC, a bit more on the Canberra airport vs Alan Joyce bunfight - 

Qantas boss Alan Joyce likens Canberra Airport to Somali pirates; airport responds with bewilderment

By Jordan Hayne
Fri 25 May 2018, 12:14pm

Photo: The fight erupted between Canberra Airport managing director Stephen Byron and Mr Joyce. (ABC News/AAP: Joel Carrett)

A fight between Qantas and Canberra Airport has escalated dramatically, with the airline releasing an email suggesting a plane was held to "ransom", and chief executive Alan Joyce comparing the airport's behaviour to that of Somali pirates.

In response to Mr Joyce's claims of an $18,000 ransom requested by credit card, Canberra Airport managing director Stephen Byron responded incredulously: "Do these people walk around with a credit card machine?"

In an interview with ABC Canberra, Mr Byron said the airport had "absolutely not" requested payment before the plane was allowed to leave, after it was diverted to Canberra in March 2017.

But according to an email and invoice supplied to the ABC, a sum of $20,503.77, including GST, was requested with the email reading: "Please note the aircraft cannot depart until the invoice is paid."

The ABC has not been able to independently verify the documents, which support Qantas' claims that the airport asked for money to be paid before the plane could depart.
The email requests payment by credit card.



Photo: An email sent to Qantas requesting payment before the plane could depart Canberra airport. (Supplied)

The stoush revolves around a plane that was diverted from Sydney and landed in Canberra, and was physically prevented from leaving when a car was parked behind it.

Canberra Airport contends Qantas had been causing safety hazards by diverting flights to it without proper planning, but Mr Joyce compared the tactics to Somali pirates.

"They actually ransomed one of our aircraft, I mean talk about appalling behaviour," he said.

"I've never seen it in my nearly 30 years in the aviation industry where a pilot's been told to pass over a credit card of $18,000 otherwise the aircraft can't go.

"Maybe the airport should be called the Canberra Pirates, because you wouldn't have this in Somalia."

Mr Byron said that was incorrect, though admitted a car had been parked behind a Qantas jet.



Photo: Canberra Airport said the stoush began over Qantas diverting too many flights. (ABC News: Jana Black)

He said the incident only lasted for eight minutes.

"Qantas had landed two 747s unannounced and put other aircraft in danger, five weeks before this incident," he said.

"This was an incident where Qantas had to be held to account in terms of safety and putting other aircraft at risk.

"There was no payment made at all, there was no dispute about payment.

"This was the last in a series of multiple incidents where unannounced, Qantas were diverting large international aircraft to Canberra Airport, and putting other aircraft that had planned and arrangements in place to divert to Canberra Airport in jeopardy.

"It is true that we said we want a dialogue before the plane leaves and a commitment that these unauthorised landings do not occur again and we got that commitment."

Better arbitration called for

Tension between the companies has been brewing for weeks, with Mr Byron campaigning against the high cancellation rates of domestic Qantas flights between Sydney and Canberra.

Mr Joyce's position was backed up by former Australian Competition and Consumer Commission (ACCC) head Graeme Samuels, who said the position airports held amounted to a monopoly.

"That's not Australia, that's a third-world country," he said.

"In fact, I'm assured by Qantas that doesn't even happen in third-world countries."

But Mr Byron said safety had always been the airport's priority, calling Mr Samuels a "well-paid lobbyist" for Qantas' interests.

"Canberra Airport can't handle multiple diversions, Qantas was putting too much pressure with their diversions," he said.

"Qantas was running roughshod over all the other airlines and Canberra Airport, making up its own rules and putting other aircraft in danger."

Mr Joyce called for better arbitration between airlines and airports, and accused airports around the country of passing costs onto airlines and consumers.

"We think an arbitration role that the ACCC can fulfil where the airlines and airports can get to agreement, it forces them to go in and do arbitration," he said.

"Consumers are losing out, because there's hundreds of millions of dollars in higher charges that we can't pass on to our customers.

"They can just sit back, increase the fees, and let the airlines pay for it."

According to Mr Byron, Qantas and the airport had agreed to an effective ceasefire over the incident, until Mr Joyce's comments last night.

Further update:

Kenyans now enter the fray of Qantas scrap with Canberra Airport

By Steven Trask
27 May 2018 — 6:38pm


View all comments

Talking points

• Canberra Airport has been at loggerheads with Qantas for months. 
  
• Last week the airport's behaviour was likened to that of a Somali pirate crew.
  
• The Kenyan embassy has now entered the fray, rejecting such comparisons.
  

The public bust-up between Qantas and Canberra Airport has taken another unexpected twist, with a senior Kenyan diplomat now entering the fray.

Last week the former chair of Australia’s competition watchdog, Graeme Samuel, likened the aggressive behaviour of Canberra Airport to something out of Somalia or Kenya.


Jomo Kenyatta International Airport in Kenya was named the best-improved airport in Africa in the 2015 Airports Council International Airport Service Quality Awards.
Photo: Kenya Airports Authority

In response, Kenya’s high commissioner to Australia, Isaiya Kabira, has rebuked the comparison in an open letter sent to Fairfax Media.

“While it is in your full right to express your outrage, we find it extremely unfortunate that you draw parallels of inefficiency and imagery of piracy to a respected and much-admired airport of Nairobi,” Mr Kabira wrote.

“We also bring to your attention that thousands of young Kenyan soldiers have put their lives on the line to pacify and bring peace in Somalia, a corner of the world, long forgotten by many nations, as part of a peace keeping force of the African Union,” he added.

The letter attributed the comments to Qantas boss Alan Joyce, although the quote referenced in the letter was made by Mr Samuel, who chairs industry body Airlines for Australia and New Zealand.


Not happy: Kenyan High Commissioner to Australia Isaiya Kabira.
Photo: Jay Cronan

A spokeswoman for the industry body said they would apologise to the Kenyan embassy.

“The comments were made on the spur of the moment and were a poor choice of wording,” the spokeswoman said.

“There was never any intention to cause offence to Kenya. The intention was to demonstrate our ongoing frustration with the anti-competitive behaviour of Canberra Airport.

“We will issue an apology to the Kenyan Embassy accordingly.”

Mr Samuel made the comparison at an airline industry event at Parliament House on Thursday last week.

“I can’t contemplate any place in the world, except perhaps Somalia or perhaps Nairobi, where an aircraft would, having had to make an unscheduled landing because of weather, had a car parked in front of the aircraft, saying you cannot move until the airline provides a Visa card to extract a charge of $18,000,” he said.

“That’s not Australia. That’s a third world country. I’m assured by Qantas it doesn’t even happen in third world countries they are involved in.”

In contrast, Mr Kabira said Nairobi Airport was a bustling freight and transport hub of which Kenyans were proud.


Qantas chief executive Alan Joyce, who labelled Canberra Airport's behaviour "absolutely appalling".
Photo: Dominic Lorrimer

“The Jomo Kenyatta International Airport in Nairobi is the centrepiece of this hub, serving millions of passengers every year,” he said.

“We are indeed proud that later in the year our national airline, Kenya Airways, will begin direct flights from Nairobi to New York.”

At the same event Mr Joyce had likened Canberra Airport to a band of Somali pirates.

“Maybe the airport should be called ‘The Canberra Pirates’ because you wouldn’t have this in Somalia,” Mr Joyce said.


Canberra Airport managing director Stephen Byron.
Photo: Graham Tidy

“You wouldn’t have this in other parts of the world. It is unbelievably appalling behaviour.”

Mr Joyce’s comments referred to a stoush in March last year, in which the airport had asked Qantas to pay an $18,000 diversion fee following an unexpected landing due to bad weather.

A Canberra Airport spokeswoman said Qantas was bullying them after a flare-up over flight cancellations.

“Qantas doesn't like Canberra Airport calling them out on the cancellations,” the spokeswoman said.

Canberra Airport said the plane was only delayed for eight minutes while they negotiated a diversion agreement to prevent unexpected and unsafe landings in the future.

But Mr Joyce said he had encountered nothing like the incident in almost 30 years working in aviation.

A Canberra Airport spokeswoman said last week the airport had a positive meeting with Qantas, and was focused on repairing its relationship with the nation’s biggest airline.

“If Graeme Samuel or Alan Joyce wants to continue this bullying behaviour, so be it,” the spokeswoman said.

“Unfortunately, this new attack comes after a positive meeting with Qantas yesterday and puts the progress we made on behalf of our customers in question.”

Canberra Airport has been publicly at loggerheads with Qantas for months, repeatedly speaking out against cancellation rates plaguing flights between Sydney and Canberra.

The airport has gone as far as seeking federal government intervention and recently met Deputy Prime Minister Michael McCormack to discuss the issue.

MTF...P2