Centreline

Following extensive consultation with the industry, the Commission proposes a ‘strategy for reform’ on the basis that the deficiencies of the existing regulatory environment and the air transport infrastructure impose a high net cost on Australians. Not surprisingly the Commission deduced that the economy would be best served by an aviation industry that is as efficient as possible and delivers best possible service at cheapest possible prices.

To achieve this the Commission recommends a four phase programme designed to achieve this objective. The first of these is of significance to the development of airport facilities, that of ensuring that new entrants to the domestic market have adequate access to domestic terminals.

It is a sad reflection on the management of national air transport policy and resources that the 30 year leases for the domestic terminals were negotiated and completed with Ansett and Australian before the establishment of the FAC and prior to deregulation. Under the terms of the leases, the two airlines have been placed in a very strong position whereby they can effectively strangle any competition. For example, a new entrant wishing to access either of the domestic terminals can only expect a sub-lease of ten years (and not beyond 2000) with Ansett and Australian having the capability to specify conditions of use etc. Not exactly the best conditions for starting an airline.

The notion that new entrants to the market would place themselves in the hands of the incumbent carriers under some ill-conceived arrangement whereby they would be magnanimously granted limited facilities under the terms of a somewhat punitive sub-lease, simply defies understanding. The fact that this was done and I quote the Draft Report “with an eye to deregulation” is clearly ludicrous. It is incredible that the DoTC submission to the enquiry stated “The Government is well aware that the success of deregulation depends upon new entrants having access to airport facilities. The long-term airport terminal leases negotiated with Australian and Ansett provide for access by new operators if the Federal Airports Corporation could not provide facilities. ” The Commission suggests, quite rightly, that depriving new entrants of fair access to terminal facilities negates the effects and implicitly the intent, of deregulation. If entrant airlines cannot operate because of insufficient or limited facilities, then the supply of alternative services available to the travelling public is equally limited. To overcome this the Commission presents three options in that the Government could:

• renegotiate the leases with Ansett and Australian;

• provide new and/or new common user facilities; and

• allow private interests to develop new facilities.

These options, apparently, would at least allow new entrants to know what facilities would be available after October 1990. However, when examined more closely all of these options have a common weakness – none of them could realistically be achieved prior to deregulation and certainly not in sufficient time for the new entrants to make any alternative arrangement for their operations.

Renegotiating the leases could, under the most well intentioned circumstances, take at least eighteen months. Even if there were sufficient space for common user facilities, it would take more than two years to plan and construct them. Finally, deregulation would be well under way by the time any private investor could realistically hope to negotiate a lease with the FAC and build terminal space – again presupposing that suitable land for terminals, aprons and the associated, space consumptive, prerequisites of airline support is available, which it isn’t.

The intentions of the Commission with respect to airport access are to be applauded as they are genuinely intended to remedy a totally inequitable situation. Unfortunately, it is unlikely they will solve anything in a practical sense. It looks like the FAC will be the unfortunate and hapless beneficiary of an expensive legacy.

The other recommendations on the reform of the system, particularly the relaxation of constraints on international air services, are broadly consistent with the Minister’s recent statement effectively shifting the bilateral approval mechanism away from the historic protection of Qantas and towards the benefits accruing to the nation as a whole, provides the opportunity for the creation of an active, competitive and effective industry. An industry within which airports in Australia should be able to thrive and grow unhindered by discriminatory and highly regulated practices – to the overall benefit of the travelling public.

ICAO ANNEX? – PREVENTION OF THE NIMBY SYNDROME

The ICAA Airport Forum recently reported on the US Air Traffic Control Association’s 33rd Annual Conference. One highlight of the discussion was “Aircraft noise and the Nimby syndrome”. To cope with increasing traffic demand, the USA needs 12 new airports. At one of the sessions the point was made that aircraft noise is the most important obstacle to expansion of the airport system – and don’t we know it! Whenever the subject of new airports is mentioned, the standard response of the local citizenry is known as the Nimby syndrome. Nimby stands for “Not In My Back Yard”.

Airlines are spending billions of dollars to modernise their fleets to comply with ICAO Stage Three noise requirements. Currently, us·airlines are 40% Stage Three equipped. Not good enough it seems – airlines using Burbank Airport now operate there with nothing but Chapter Three aircraft” – but the neighbours still complain about the noise!

A portent of things, eg. even more noise legislation, to come perhaps?