Productivity Commission to investigate airport regulation effectiveness

According to the government’s terms of reference to the Productivity Commission, “The purpose of this inquiry is to examine the effectiveness and efficiency of the current economic regulation and quality of service monitoring regime for airports and whether new arrangements are needed. It is also to make recommendations in relation to the requirement for future regulation and monitoring of services and the scope and appropriate mechanism for the provision of greater transparency and accountability in airport infrastructure provision and services.”

According to its website, areas the Productivity Commission will investigate include:

• aeronautical services and facilities provided by airport operators
• passenger-related aeronautical services and facilities provided by major airline tenants
• land transport facilities providing access to the airports
• the effectiveness of remedies in dealing with potential abuses of market power
• the effectiveness of the Australian Competition and Consumer Commission’s monitoring regime
• regulatory impacts on the ability of airports to price, operate and invest in infrastructure in an efficient and timely manner
• the effectiveness of arrangements for the control of planning, operation and service quality monitoring of land transport access to major airports.

The Productivity Commission will undertake a public consultation process as part of its inquiry, which will include public hearings, public submissions, and releasing a draft report for public comment.

“We encourage airport operators, the aviation industry, users of airports and local communities to engage with the inquiry and have their say on the future regulation of airports,” the ministers said.

The Aviation White Paper committed the government to a Productivity Commission review into airport pricing in 2012, but the government has brought this forward to 2011.