BARA seeks value for money in Airport Services

12 September 2018

The Board of Airline Representatives of Australia (BARA) welcomes the opportunity to provide its submission to the Productivity Commission’s Inquiry into the economic regulation of Australian airports.

“As far as the BARA’s member airlines are concerned, the operators of Australia’s major airports have not delivered on the intended efficiency benefits of the ‘light-handed’ economic regulatory model. BARA is particularly concerned with the growing disconnection between the performance assumed by airport management and the actual quality of services member airlines receive for the prices paid,” said Barry Abrams, Executive Director of BARA.

International airlines operating to and from Australia pay more than $800 million annually for airport services. They also incur over $250 million annually in additional costs due to excessive delays, mishandled bags and missed passenger connections.

“There are benefits to be gained from applying firmer economic regulation that would require airport operators to accept an appropriate level of commercial accountability in service delivery. If airport operators focused on improving core services and in conjunction with setting reasonable prices, airlines, passengers and Australia’s tourism industry would all benefit,” Mr Abrams said.

The commercial benchmarks that would drive improved performance include:

  1. pricing for different service outcomes (eg contact gates vs bussing operations)
  2. availability of services within a reasonable time
  3. price reductions if aggregate airline demands exceed the practical capacity of airfield and/or terminal services, causing airlines persistent significant delays
  4. proactive measures to restore in-terminal service standards, such as the cleanliness of the bathrooms and other terminal facilities.

“Genuine improvement requires a new path whereby the parties negotiate with a clear understanding of the underlying commercial benchmarks they are legally obliged to achieve. If these benchmarks can’t be clearly demonstrated in the final offer the airport operator provides, airlines should have access to recourse to obtain the minimum required standards”, Mr Abrams said. [ENDS]

Download: BARA’s submission; BARA’s policy document on airport services; BARA’s media release and Fact Sheets