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Airport Users Call on Government to Adopt ACCC Recommendations on Monopoly Airports

September 11, 2019 Airport No Comments Email Email

Retailers, operators of rental cars, commercial passenger vehicles, off-airport car parking, and ride-share drivers, have joined with major airlines in warning that the Government’s productivity agenda will be held back if they don’t act on the important issue of monopoly airports.Leading the call was Airlines for Australia and New Zealand (A4ANZ) Chairman, Professor Graeme Samuel AC, who said today that it was well understood that Australia’s monopoly airports were now the only privatised infrastructure assets in Australia not appropriately regulated for the protection of consumers.

Professor Samuel, a former Chairman of the ACCC, said, “For decades now, Australian travellers have felt the impact of monopoly pricing at our airports, and the ACCC has repeatedly said that we have a problem. But while other sectors have caught up with regulatory regimes that better reflect consumer interests and expectations, the Productivity Commission (PC) – inexplicably – seems intent on retaining the status quo for airports.”

“In practice, this means inefficient, protracted negotiations, disputes that end up in court, costing millions of dollars, and creating uncertainty over investment. The system has passed its use-by date; it’s neither efficient nor effective.”

The impact of this is not only felt by the airlines; it follows passengers at every stage of their journey. On-airport retailers are another group seeking a fairer deal. Russell Zimmerman, Executive Director of the Australian Retailers Association, said “With current economic conditions and retail spending, it is hardly the time for the government to endorse the Productivity Commission’s recommendation that permits airports to continue to charge monopoly rents unchecked.

Compared to traditional shopping centres, there is a lack of transparency on lease terms at some airports, and airport rents are much higher. But there is no scope for negotiation on terms and conditions, and many airport lease clauses prohibit retailers from speaking out. There needs to be a system to hold the monopolists to account, just like there is in other sectors.”

The Australian Finance Industry Association (AFIA), who represent rental car operators, also supports sensible, evidence-based reforms to encourage better negotiations and resolve disputes. AFIA CEO, Helen Gordon said, “Consumers bear the brunt of high airport charges, with a significant proportion of the cost for a car rental representing passed-on costs charged by the airports to the operator. While the rental car operators provided the Productivity Commission with compelling evidence, including the fact that it is more expensive for them to operate at Australian airports than LAX, Heathrow and Charles de Gaulle, it is unclear how this was taken into account by the
Commission.”

Other ground transport operators have also pointed to the significant imbalance in negotiating power they face when trying to strike a deal with a monopoly airport operator over landside area access fees. President of the Commercial Passenger Vehicle Association of Australia, Mr André Baruch, said that the solution to this was not complex nor unreasonable, and had worked in other sectors. “All we’re asking for is for the same to apply to airports: an open, transparent and inclusive process.”

Ride Share Drivers Association of Australia’s President Ms Rosalina Kariotakis agreed that the current system does not support ground transport operators to bargain efficiently or effectively with monopoly airports. “Drivers have simply been forced to accept airport access fee increases – in some cases over 200% in 4 years – which in turn pushes the prices up for passengers.”

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