Mar 30, 2012

Release of Productivity Commission report into airport pricing

The Australian Government today welcomed the release of the report of the Productivity Commission into the Economic Regulation of Airport Services.

At the end of 2010, we asked the Productivity Commission to look at the effectiveness of current economic regulation of airports in supporting ongoing investment in infrastructure while deterring potential abuses of market power.

We also asked the Commission to look at land transport and ground access issues around the major airports.

The Government broadly accepts the Commission’s findings that the current system of regulation should be maintained but needed ongoing monitoring by the Australian Competition and Consumer Commission.

The Government also welcomed the ACCC’s annual Airport Monitoring Report for 2010-11, which provides a detailed analysis and comparison of prices, costs, profits, investment levels and quality of service at the nation’s largest airports.

In response to the Productivity Commission report, the Government will support and improve transparency of prices charged by airports by: 

  • Extending monitoring of airport pricing by the ACCC for another seven years to 2020, including airport car parking prices and costs;
  • Improving how the quality of service provided by airports is measured and monitored to make sure it is accurate and relevant;
  • Encouraging the ACCC to use its existing powers to investigate if it believes there are concerns about airports abusing market power, including being able to recommend a full pricing inquiry to the Minister responsible for competition; and
  • Continuing to implement the Government’s initiative of planning coordination forums and community aviation consultation groups to address ground transport and planning issues and improve community engagement.

We will continue to monitor airport pricing closely and reserve the right to look at any regulatory options necessary if we find evidence of inappropriate behaviour by the major airports.

Since the previous government removed direct regulation of airports, this Labor Government has taken unprecedented steps to improve transparency for passengers and the community.

Our priority has been to strike a balance between giving passengers the information they need about prices charged by airports and providing certainty to airport operators to continue investing in necessary airport infrastructure. 

The Government thanks the Productivity Commission for its comprehensive analysis and reporting on an issue that affects more than 100 million passengers using our major airports each year.