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The Australian Productivity Commission has delivered Perth Airport a major win in its ugly Supreme Court battle with Qantas over passenger charges. The commission’s draft report into airport regulation found Australia’s major airports, including Perth, do not earn excessive profits or systematically exercise their market power to the detriment of travellers. It said the airports, which are monitored by the Australian Competition and Consumer Commission, had “generated returns sufficient to promote investment while not earning excessive profits”. In December, Perth Airport took the Qantas Group to the Supreme Court alleging Qantas owed it $11.3 million in unpaid aeronautical service fees. The airline claimed Perth Airport was using its monopoly power to make excessive profits and abusing its position as a monopoly. The Productivity Commission found that the airport’s “return on aeronautical assets” was about 18 per cent in 2007-08 and had experienced sharp falls, to be less than 8 per cent in the past two financial years. While finding airports did not make excessive profits, presiding commissioner Paul Lindwall stated: “The current form of economic regulation remains fit for purpose although more scru-tiny of Australia’s four busiest airports is justified to ensure prices paid by airlines and passengers do not lead to monopoly profits.”
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On the thorny issue of airport parking costs, the commission said “there is little evidence that Sydney, Melbourne, Brisbane and Perth airports are exercising their market power in carparking”.
Perth Airport has the lowest carparking charges of the big four, although it does not have multi-storey carparks near terminals. The Australian Airports Association chief executive Caroline Wilkie said the association welcomed the draft report’s confirmation that major airports had not misused their market power. “The Productivity Commission has found airport returns are sufficient to support the need for sustained, long-term and often costly infrastructure investment at Australian airports to facilitate the growth of the aviation industry,” she said.
Story sourced from here
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