Current challenges in the WA aviation industry

by Kassem Seedat, Specialist Consultant - Legal and Commercial

In mid-December 2018, Perth Airport filed legal proceedings in the Western Australian Supreme Court against Qantas, claiming payment of outstanding aeronautical service charges for the July-October 2018 period when Qantas is alleged to have short-paid invoices despite having “passed on to their customers all or part of the charges”. 

It is possible that these proceedings presage more pain to come in the often fraught relationship between Australian airlines and airports over user pay models and facilities which the latter provide or should provide not just to benefit airlines but the flying public. These concerns in their more modern iteration date back at least to the early years of privatisation and the handing over of airport ownership and management from the erstwhile Federal Airports Corporation, which started in 1997.

Qantas’ defence is expected next month. In the meantime, it questions the nature of charges which the airport imposes and its late December 2018 submission to the Productivity Commission’s Economic Regulation of Airports Inquiry states that Perth Airport has engaged in “an abuse of its position as a monopoly”, is “blatantly profiteering” and that “[m]odern, effective light-handed regulation” is needed to bring recalcitrant airports to heel, to “deliver competitive prices, greater efficiencies and higher productivity”.

In the background is the airport’s tussle with the airline about what further international flights can be accommodated from the T4 terminal (which Qantas uses exclusively for regional, domestic and international flights) and the nature and timing of moving the airline to the growing T1/T2 terminal – this is part of the larger puzzle of co-locating all commercial airlines at one location to be straddled by a new parallel main runway and the new rail link to the city at that location being tunnelled at present. The State government will want to see this stoush with the airport’s biggest customer ended soonest.

Tags: Aeronautical Charges, Qantas

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