Sydney Airports loses appeal
Macquarie Airports owned Sydney Airport has lost its bid to overturn an Australian Competition Tribunal finding that it abused its monopoly position over airport fees, also failing to overturn the requirement that it declare its domestic aviation charges.
The decision also allows the Australian Competition and Consumer Commission to arbitrate on issues related to the pricing of domestic air services if airlines and the airport cannot reach an agreement.
Sydney Airport appealed to the Federal Court against the Tribunal’s decision last December that declaring domestic aviation charges for five years would promote competition in the market for the carriage of domestic air passengers into and out of Sydney, with the Tribunal finding Sydney Airport Corporation Ltd had used its monopoly power to favour Qantas by altering its pricing policy from a charge based on an aircraft’s maximum take off weight to a per passenger charge.
It also found Sydney Airport Corporation had the ability and the incentive to exercise its monopoly power in negotiations with airlines in a way that would produce results unlikely to arise in a competitive environment.
The tribunal did not accept that Sydney Airport Corporation was constrained by the countervailing power of the airlines or the threat of the reintroduction of price controls.
Virgin Blue yesterday welcomed the Federal Court’s decision to uphold the tribunal’s finding and said it would give airlines the safety net of an independent arbitrator if commercial negotiations failed.
Report by The Mole
John Alwyn-Jones
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