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Australian regulator warns airports against price gouging to recover pandemic losses
September 29th 2021
Australia’s competition regulator has warned the nation’s airports against using their monopoly positions to raise fees and recover COVID-19 losses. Read More » The Australian Competition and Consumer Commission (ACCC) said it had heard concerns from some airlines that airports may seek to significantly increase charges to carriers to recover lost profits from the pandemic. The regulator warned this would be inconsistent with the Australian government’s aeronautical pricing principles and be a clear example of airports systematically taking advantage of their market power. “We would be very concerned if the major Australian airports sought to use their monopoly positions to charge airlines excessive prices in order to recover any lost profits from the pandemic,’’ ACCC chairman Rod Sims said. “This could limit an already vulnerable sector’s ability to recover and impact on both consumers and the economy.” The warning, which was welcomed by airlines, emerged as the ACCC released its latest report on airline competition in Australia. The report observed that travel restrictions, because of the latest outbreaks of the COVID-19 delta variant, had brought the majority of domestic flying to a halt and delivered a significant blow to the local aviation industry. The ACCC also supported recommendations from a recent Australian government review that would limit the ability of incumbent airlines to keep more landing and take-off slots than they need at the nation’s major gateway, Sydney Airport. “Access to take-off and landing slots at Sydney Airport can be a significant barrier for airlines to enter the market or expand their services,” Sims said. “The recommendations proposed by Peter Harris, such as greater transparency and a stronger system for monitoring compliance with airport slot rules, should make more slots available for new and expanding airlines.” Other issues raised in the report included the increasing dominance in the domestic market of Qantas Airways, which has raised its share of passengers from 63% before the pandemic to 70%, and competition in regional areas.
