Virgin Blue today asked the National Competition Council (NCC) to recommend the declaration of two services under Part IIIA of the Trade Practices Act.
These services are: - airside services, including the use of the runways and taxiways at Sydney Airport;
and domestic terminal services at Sydney Airport
Part IIIA of the Trade Practice Act is designed to promote competition by requiring owners of monopoly infrastructure to allow others to use that infrastructure on fair terms. It establishes a regime for access to bottleneck facilities of national significance that cannot be economically duplicated, such as Sydney Airport.
Where a service is “declared”, and someone seeking access to that service cannot agree with the owner on the terms for access, then the access seeker can have the Australian Competition and Consumer Commission (ACCC) arbitrate the access dispute. In conducting any arbitration, the ACCC is required to take into account a number of factors, including the public interest in having competitive markets in Australia.
In practical terms, this means that if the services are declared as requested by Virgin Blue, then airlines that use Sydney Airport can have the ACCC arbitrate any access dispute that they have with Sydney Airport over the use of the runways, taxiways and terminals. The ACCC will then set a price that is a reasonable balance between the interests of the airlines and Sydney Airport.
No airline can operate from Sydney without using the runways, taxiways and terminals at Sydney Airport, and they are significant cost elements in an airline’s business. Sydney Airport is a monopoly provider of these services. Declaration of these services would provide airlines with fair access to terminals, and some protection from excessive increases in fees and charges for using Sydney Airport. This will allow airlines to continue to offer affordable prices for flights in to and out of Sydney for many years to come.
David Huttner, Head of Commercial of Virgin Blue, stated, “We believe there is an issue here that affects all business and leisure flyers going to or from Sydney. We believe this is an important policy issue. Should these vital monopolies be allowed to operate without effective oversight and charge the travelling public whatever they please? This matter impacts upon all business and leisure flyers going to or from Sydney and we look forward to presenting our views.”
Consistent with Virgin Blue’s previously stated position, Virgin Blue will continue its proceedings in the Commercial Division of the New South Wales Supreme Court against Sydney Airport Corporation Limited (SACL) in relation to the former Ansett terminal.