Sydney Airport and the bush airline Regional Express (Rex) are in a bitter stoush over a proposed increase in fees.
Rex claims Sydney Airport is trying to edge out regional operators by raising plane parking charges to such an extent that their operations will no longer be commercially viable.
The regional airline says the rise in charges would increase its annual costs from $700,000 to as much as $3.7 million.
Rex said last week that Sydney Airport’s attempt to increase parking charges by almost 100 per cent – on top of huge increases in other revenue – must be clearly resisted, otherwise it would spell the end of access to Sydney airport for all the NSW regional airlines.
“Rex is committed to defending the rights of the bush and will make a vigorous submission to the ACCC (Australian Competition and Consumer Commission),” the airline said.
Sydney Airport – now run by a private consortium, dominated by the MAp Group (whose major shareholder is the Macquarie Group) – has defended its position by claiming the proposal will only increase aeronautical fees by 22 to 23 cents a passenger, and be the first such increase since 2001.
The full increase would not apply to QantasLink, Virgin Blue or Jetstar, as these airlines had negotiated commercial agreements with Sydney Airport.
NSW Farmers Association’s Business, Economics and Trade Committee planned to move at the annual conference this week that the association ensures the Federal Government maintains ring-fencing of regional slots, which would guarantee regional airlines’ access to Sydney Airport at present levels.
Committee chairman, Sam Archer, Gundagai, said the loss of Rex airlines in regional areas would have a phenomenal effect.
“We rely on airlines such as Rex to connect us to the city, and it is the fundamental right in rural and regional NSW to have access to Sydney airport,” Mr Archer said.
Sydney Airport needed to revisit its pricing structure to accommodate regional aircraft, he said.
Mr Archer doubted the claim by airport authorities that the $100 million investment in providing a runway safety area had been of benefit to regional passengers.
“For most regional flights you have to walk out onto the tarmac and up a set a stairs onto the planes – I can’t see a great deal of infrastructure spending there,” he said.
NSW Farmers, as part of the Rural Alliance, met with the NSW Opposition parties last week in Dubbo at an open forum, “Rebuilding the Regions”, at which transport and infrastructure were discussed.
Rex is Australia’s largest independent regional airline, operating a fleet of 50 Saab 340 aircraft on about 55,000 flights each year to 35 destinations through NSW, Victoria, Tasmania, South Australia and Queensland.
More than half those flights go through Sydney.
The group comprises Regional Express, the air freight and charter operator, Pel-Air Aviation, and the Dubbo-based regional airline Air Link, as well as the Australian Airline Pilot Academy.
The ACCC is now seeking comment from interested parties on the Sydney Airport proposal to increase its regional charges.
The airport says it intends to increase prices by a maximum of 2.9 per cent, which it estimates represents an increase of about $4.70 for each aircraft movement.
Under the prices surveillance provisions of the Trade Practices Act 1974, the ACCC has a role in assessing proposed price increases for services that Sydney Airport provides to regional airlines operating passenger flights wholly within NSW.
It has invited comment on the issue, with a deadline of July 30 for submissions.
Details of Sydney Airport’s price notification and supporting documents and the ACCC issues paper are available on the ACCC website, www.accc.gov.au/aviation
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