Initial submissions for Australia’s Productivity Commission report on airport regulation published

10 September, 2018

In Jul-2018, Australia's Productivity Commission called on individuals and organisations to prepare submissions for the Commission's inquiry into the economic regulation of airports. The inquiry is designed to report on the appropriate economic regulation of airport services, including the effectiveness of the price and quality of service monitoring, in achieving the following objectives:

  • Promoting the economically efficient operation of, and timely investment in, airports and related industries;
  • Minimising unnecessary compliance costs;
  • Facilitating commercially negotiated outcomes in airport operations.

The deadline for the Initial submissions was 03-Sep-2018 and have now been made public. The following groups and individual provided submissions to the Commission's review:

  • Bioenergy Australia:
    • Submission focuses on providing comment on competition of the jet fuel market in Australia;
  • Australian Airports Investor Group, representing:
    • AMP Capital Investors, AustralianSuper, Capital Airport Group, Colonial First State Global Asset Management, H.R.L Morrison & Co, IFM Investors, Macquarie Infrastructure and Real Assets, New South Wales Treasury Corporation, Palisade Investment Partners, Perron Group, QIC Private Capital], State Super (SAS Trustee Corporation), StepStone, Sunsuper and UniSuper;
  • The Committee for Sydney;
  • Disability Professionals;
  • David Starkie: Former adviser on economic regulation UK Civil Aviation Authority and former expert advisory panel member for UK Airports Commission.

Example submission: Sydney Business Chamber (SBC)

SBC's submission focussed on landside access and transport linkages, the 'regional ring fence', and other operating restrictions impacting the economic performance of Sydney Airport. Details include:

  • Landside access and transport linkages:
    • SBC has both publicly and consistently advocated for reductions in the station access fee to encourage greater utilisation of rail in accessing Sydney Airport, and to ensure it can compete effectively with other transport options);
    • SBC calls on for the New South Wales Government's agreement with the Airport Rail Link company to remove provisions limiting additional bus services to and from the airport;
  • Regional Ring Fence:
    • SBC endorses the principle of the regional ring fence;
    • Issue should be discussed in more detail with airline operators to see how the current regional ring fence rules may be inhibiting airlines from looking to support regional air routes;
  • Other operating restrictions:
    • SBC argues there is a strong case for a review of operating restrictions on Sydney Airport and at the very least the Commission should convene a separate inquiry into the economic impact of the specific operating conditions at the airport.

In a recent interview with the Blue Swan Daily, among other key issues, Regional Express executive chairman The Hon John Sharp discussed that airport owners do not understand the difficulties of regional aviation and charge too much for the services they offer. He highlights that even in markets where it is the sole operator, it does not hold a monopoly due to strong competition with the motor car and urges a review of airport charges and services. He also discusses that while pilot training is a “cost centre” its training academy makes pilot training a potential profit centre and a potential “big export earner” for Australia.

The Commission will seek further information and feedback following the expected release of a draft report in early 2019, while the final inquiry report is to be handed to the Australian Government in Jun-2019.