Market powers?

And with the ACCC calling for more comprehensive monitoring of airports and the Productivity Commission’s 2012 review of airports brought forward by a year to address general discontent about airport performance Dixon’s comment appear to have currency.

In December last year the Gillard Labor Government asked the Productivity Commission to investigate airport pricing, investment and services as part of a major public inquiry into the economic regulation of major Australian airports.

“We have brought this inquiry forward to shine a spotlight onto a range of charges at the nation’s major airports including Sydney, Melbourne, Brisbane, Adelaide and Perth,” the Prime Minister’s office said.

“The inquiry is being brought forward from 2012 in response to the Australian Competition and Consumer Commission’s (ACCC) Airport Monitoring Report, which was released earlier this year. In that report, the ACCC stated, for example, that car parking prices at all monitored airports “are consistent with charges reflecting an element of monopoly rent,” the statement said.

The Government asked the Productivity Commission to assess the effectiveness of economic regulation of airports in supporting ongoing investment in aviation infrastructure while deterring potential abuses of market power.

Importantly the inquiry will also review the provision and quality of land transport facilities for those wanting to access to airports.

Privatisation

Australia’s airports privatisation program began in April 1994 when the Australian Government announced its decision to sell 22 major and secondary airports that were owned and operated by the Federal Airports Corporation, which had been established in 1986 as a wholly-owned unlisted government enterprise.

Complicating the sale process was the use of the lease model (typical in the US) for management of domestic terminals with some airlines responsible for all operational features at the terminal and in some cases maintaining terminal infrastructure, with the airport operator providing only the land for the domestic terminals that are under lease.

The selloff of Australia’s 80 airports actually began in 1987 with the smaller facilities being spun off to regional councils through various measures such as the Aerodrome Local Ownership Plan.

The stated rationale for the disposal of the airports was to “improve the efficiency of airport investment and operations in the interests of users and the general community, and to facilitate innovative management.”

Duration of the leases is for 50 years with an option for an additional 49 years and the total sale netted the government $8.5 billion, nearly half of which came from the privatisation of Sydney Airport, which attracted a bid of $4.23 billion a figure some analysts at the time warned was too high.

The initial heavily regulated oversight was replaced in July 2002 with a more light-handed approach with price notification and price caps discontinued for all airports and replaced with price monitoring for most airports.

In 2007 this was further eased by the introduction of a “show cause process” whereby price monitored airports may be required to demonstrate why their conduct should not be subject to more detailed scrutiny.

Monitoring

The ACCC has responsibility for economic oversight and monitoring of quality of service of the 12 major airports, which are deemed core-regulated airports under the 1996 Airports Act.

However in its submission to the Productivity Commission’s Economic Regulation of Airport Services the ACCC warned that “the monitoring experience has indicated that airport users have insufficient countervailing power to influence behaviour of the major airports.”

The ACCC qualifies thus; “To illustrate, the monitoring results indicate that, over several years (including the most recent year), the quality of service provided to airlines by Sydney Airport has remained less than satisfactory on average, while over the same period, the airport’s average prices and profitability for those services have continued to increase. In their survey responses, airlines have consistently identified Sydney Airport as the least responsive of the airports with respect to service delivery and quality over a sustained period of time. This lends support to the notion that airlines have been unable to negotiate an acceptable level of service with Sydney Airport, despite paying higher prices. The other airports were rated satisfactory by the airlines on average over the last five years, although Perth Airport received a rating of poor in 2007-08 and 2009-10.”

The ACTU claims that the regulation of Australia’s airports is “extremely flawed” a view shared, it claims, by widespread and expert opinion.

Those flaws include:
Lack of regulation of market power of airports and lack of incentive to keep prices at socially optimum prices;
Low incentive to invest in aviation infrastructure and improved safety or aeronautical services;
Failure to contain rent seeking behavior;
Low investment in direct workforce and skills acquisition.

The ACTU maintains that the regulatory framework is flawed in that it only monitors prices over cost, so provided prices increase with costs, no regulatory intervention is triggered.

And no regulatory intervention is triggered by car parking costs with costs rising 77 per cent at Australia’s five major airports despite passengers only increasing 41 per cent.

In its 2008/09 report ACCC chairman Graeme Samuel said that the performance of Sydney Airport was of greatest concern.

“The indications are that Sydney Airport has increased profits by permitting service quality to fall below that which the airlines reasonably expect,” Samuels said.

“Airport users, including passengers and airlines, rated Sydney Airport last amongst the monitored airports for the fourth consecutive year and it appears that investment in the international terminal has been slow. And while Sydney Airport was the only airport to report a fall in passenger numbers, its revenue and profit margins still increased. Sydney Airport also recorded the highest average prices at $13.63 per passenger, compared to the lowest of $7.96 at Melbourne Airport,” said Samuels.

The ACCC found at the time that only Brisbane Airport was rated by passengers as “good.”

Sydney Airport however claimed that the ACCC report was “out of date” and since the period in review the airport had commenced construction of the $500 million upgrade of Sydney Airport’s International Terminal and precinct with new areas being commissioned. The airport also challenged the ACCC’s methodology.

Jetstar’s CEO, Bruce Buchanan, responding to the ACCC report said at the time that the aeronautical charges levied on airlines by Australia’s airports aren’t related to costs but are a “wealth transfer” from airlines to airports.

Sharing the pain

Samuel also criticized Australian capital cities airports in general for not helping stimulate travel through the GFC. “While airlines lowered their airfares to attract business in the global economic slowdown, the airports appear to have enjoyed the security of guaranteed prices as well as benefiting from the airlines’ efforts to encourage travel,” Samuel said.

During the GFC (FY 2008/09) Australia capital city airports all increased charges from Perth with a small 1.7 per cent lift to Brisbane with a 13.6 per cent jump.

In contrast Singapore’s Changi Airport, which is government controlled reduced its charges by 25 per cent to help airlines, while state run Malaysian Airports, slashed its charges by 50 per cent during the worst of the GFC.

The ACCC also surveys airline users on whether they are receiving a reasonable level of service. According to the ACCC in the responses, “airlines have consistently identified Sydney Airport as the least responsive of the airports with respect to service delivery and quality over a sustained period of time.”

Former Qantas Group Executive Government and Corporate Affairs, David Epstein mused with Australian Aviation last year that “it is a truism that the relationship between airports and airlines should be symbiotic, ideally a loving partnership. More often than not, it resembles Oscar and Felix in The Odd Couple, rather than Romeo and Juliet.”

“The task is to make airports work for all stakeholders, and to do that we must remember that, above all else, airports are airports. They exist to serve the aviation industry, so that it in turn can serve its customers. Sometimes that is forgotten, particularly in Australia and New Zealand. But it is not just airport investors and operators who can be accused of this sin on occasion. It is also governments and local governments, particularly local governments,” Epstein argued.

In a September 2006 paper, Airport Policy in Australia and New Zealand: Privatization, Light Handed Regulation and Performance, Peter Forsyth of the Dept of Economics at Monash University claimed that airports in Australia– and New Zealand – “do possess market power, and the use of countervailing power by airlines, or commercial negotiations, is not strong enough to eliminate this market power.”

Updating and expanding the work with Australian Aviation, Forsyth said that compared to many other developed countries there was a lack of competition for Australia’s airports.

Forsyth points to the US for instance where many cities – such as the LA basin – have a number of alternative airports, enabling airlines to weigh and select competitive offerings.

“But take Perth in Western Australia for example. There is only one airport – for hundreds of kilometers,” Forsyth notes. “While Qantas has some market power due to its size, if Perth Airport raises it charges significantly, [which it is yet to do], airlines have few options.

Forsyth suggests that Australian and New Zealand’s major airports’ charges are close to the average for those for the larger airports around the world with some good and some poor performers. On balance he believes that the privatization has been a success. “My reading is that the airlines would prefer more dispute mechanisms, and while they say they are unhappy, they probably can’t tell you why they are unhappy. They have gripes but maybe they will always have gripes.”

And Qantas also has grips about Australia’s regional airports. Late in 2010 Epstein told Australian Aviation that in Qantas’ experience “an overwhelming number of emerging/regional airports have taken advantage of their market power, as no [ACCC] guidelines or incentives exist to prevent them from doing so.”

“Airports have had no incentive to reach a negotiated commercial arrangement, as the outcome achieved by arbitrarily imposing high charges is far more advantageous,” Epstein added.

And the numbers bear out Epstein’s concerns. Whereas the head departure /arrival tax, excluding security screening at Perth airport is $7.65 the figure soars at regional airports within Western Australia. Kalgoorlie charges $21.76, Albany $20 and Geraldton $16.36.

Concerns are also expressed about the valuation of assets underlying pricing regimes and the degree to which the capital funding component of operator costs and, thus pricing, can be a charge on incumbent customers that funds infrastructure that is intended to entice new airlines to compete against them.

Another issue is whether or not airline customers should bear the costs of gold-plated infrastructure or infrastructure that may do more to enhance the non-aviation segments of airport operators businesses rather aviation services.

Government no better

However the Centre for Asia Pacific Aviation’s executive chairman Peter Harbison gives privatization a tick, suggesting that the airports – and thus airlines – would be no better under government ownership.

The Tourism & Transport Forum commissioned URS Australia to study the subject and that report, “Assessing the impact of airport privatization” paints a positive picture. URS, a global consultancy which works with airports, argues that “the privatization of Australia’s airports has been a resounding success with airports generating significant investment and economic growth at no cost to the taxpayer.”

It adds that the privatization policy has delivered improvements in airport operating efficiency, financial performance and investment levels and has delivered significant benefits to the Australian economy overall.

Supporting that claim the Air Transport Research Society claims that Perth Airport is as efficient as Seoul’s Gimpo and above the mean for Asia.

The TTF, while noting that non-aeronautical development on the airports has led to controversy with users claiming that airports were focused on non-aeronautical investments such as warehouses, particularly in the years immediately following privatization, maintains that “non-aeronautical development and revenues are fundamental to ensuring that airports remain a bankable proposition.”

“Diversity in an airport’s revenue stream will help to protect it from external shocks, industry trends and volatile markets,”

Privatization can be put under the microscope at Perth Airport, which was sold off in 1997 to Westralia Airports Corp.

For the first five years of its lease WAC had to submit investment plans in the first instance to the ACCC and very few were approved. This limited what could be done with the airport which had user-leased (Ansett and Qantas) domestic terminals on one side and a poorly-designed dysfunctional international terminal on the other.

After the removal of the ACCC from the approval process, WAC was able to work directly with the airlines but air travel was in a savage downturn after 9/11 and the collapse of Ansett.

However, by late 2002 investment in improvements started to flow and the initial focus was the international terminal. Despite this, a major $30 million upgrade of that terminal was not sanctioned by the major airlines.

Both WAC and the airlines get the thumbs down for their slow response to the dramatic upswing in traffic that started in 2003. It took nearly four years for the airport and airlines to get on the “same plane” for improvements to flow.

Part of the problem is the improvements must be made on both sides of the airport and some major upgrades needed to come from Qantas, which holds the lease on its domestic terminal.

Qantas proved a laggard in 2007 with local management seeking photos of early morning departures taken by Australian Aviation to prove to the Sydney-centric head office that ramp congestion was a serious problem.

Quickly, funds flowed with a $75 million upgrade for its terminal.
For its part, WAC needed a blast from the then state premier to galvanize it into action.

It produced a vision document five weeks later that showed a new integrated international and domestic facility with 42 parking bays on the site of the current international terminal on the eastern side of the airport plus an adjacent low cost airline building with 32 hard stands.

The airport is now getting ticks from travelers and airlines alike with an aggressive but balanced building program to meet the wide variety of needs between LCCs full service and charter operators.

From a public perspective, Australia’s airports suffer from comparison with the airport palaces of Southeast Asian hubs such as Singapore Changi, Kuala Lumpur International, Bangkok and Hong Kong but they have not yet made IATA’s DG Giovanni Bisignani’s infamous “Wall of Shame.”

Hall of Shame

But while they may not have made it to IATA’s Wall of Shame, they may make it to the Productivity Commission’s Hall of Shame in August if submissions from airlines and the ACCC are any guide.

The PC will issue its Draft Report in August with a final report to government in December.

Qantas has blasted airport’s monopoly power in its submission to the PC saying while some progress has been with certain airports towards a more appropriate commercial negotiating approach “reasonable commercially negotiated outcomes with airports are the exception rather than the rule.”

It adds in its submission that “where such agreements have been reached they are inevitably the result of protracted negotiations often taking years.”

Qantas maintains that airports are “natural monopolies” and the current light handed monitoring approach to regulation has been ineffective in preventing the operators of major airports from exerting significant market power in the provision and pricing of airport facilities and services.

“Whilst the Government’s Aeronautical Pricing Principles were intended to
serve as a guide for the pricing of aeronautical services at the non monitored capital city and larger regional airports, many of these airports also exert significant market power and exhibit behaviours that are not consistent with those of service providers operating in a competitive environment.”

Qantas maintains that “the current regulatory regime provides no disincentive at all for the major airports in charging demonstrably excessive rates for any core aviation facilities that sit outside the current light handed regime. In particular, excessive lease costs for critical infrastructure such as airline offices, lounges, hangars, maintenance facilities, check in counters, service desks and staff car parking all sit outside any protection provided
by the current regime.

The airline warns that “airlines, and indeed airports, cannot function without these facilities and yet no protection is afforded to airlines in relation to the provision of these services by airports.”

“Collectively these costs add significantly to the total cost of operations at airports and to the costs airlines and consumers must incur as a result.”

Qantas arguers that the current regulatory framework does not strike
the appropriate balance between providing incentives for airports to invest and ensuring that mechanisms are in place to prevent unreasonable behaviour and excessive pricing of facilities and services.

“In the Qantas Group’s view, the pendulum has swung too far in favour of airports. The light handed framework is enabling airports to generate excess returns at the expense of consumers and airlines,” the airline maintains.

Qantas is concerned that with airports expected to invest almost $6 billion on airport infrastructure over the next ten years, “these distortions are likely to be exacerbated unless the current regulatory regime is given the necessary rigour to more effectively monitor the provision of airport
services.”

In its submission Qantas gives evidence to support its claims of;

• Airport profitability being achieved at the expense of airline profitability
• Monopolistic behaviour in negotiating commercial leases
• Inefficient airport investment decisions
• Inequitable pricing of aeronautical assets
• Excess returns from aeronautical assets
• Uncertainty and inconsistency surrounding use of the regulatory modeling process across airports
• Limited application of ‘line in the sand’ valuations
• Monopolistic behaviour of regional airports

The submission also provides evidence invalidating the perception that airports share the risks associated with demand volatility. “Recent experience during the Global Financial Crisis (GFC) demonstrated that airports and airlines have asymmetric risk profiles and that airports exercised significant market power in transferring risk to airlines during a particularly turbulent global economic period,” Qantas says.

Qantas believes that the solution for improving the current system would be for consistency in the application of the regulatory framework across all airports.

It adds that the current light handed regulatory framework has not proven to be sufficient to adequately regulate aeronautical assets in Australia. But it warns that the re-introduction of heavy handed regulation could address these issues but it would also be accompanied by the risk that its implementation will have more costs than benefits.

“The Qantas Group’s preferred alternative is to work within the current light handed regulatory framework through the introduction of codes of conduct that cover:

• The regulatory modelling process
• Capital expenditure planning and pricing
• Definition of aeronautical services
• Benefit sharing
• The use of precedent leases for commercial airport lease negotiations
• Clarification and extension of the application of the line in the sand approach to asset valuation
• Binding, independent dispute resolution

It adds that “the legal framework for this approach is provided through the Competition and Consumer Act 2010 and evidence from other industries in Australia and the US aviation industry suggests that it can be effective.”

The bell tolls

The Toll Group is also not happy with Australia’s airports and in its submission said it was “essential that regulators and airport managers
alike to realise that Toll Group businesses like Toll Dnata and Toll Air Express provide aeronautical services that are vital for the community and necessary to ensure the profitability of airline operators.”

In its submission it said that it had “become increasingly concerned by the actions of some airport operators who show little regard for the needs of businesses, such as Toll Dnata and Toll Air Express, and give priority to non-aeronautical businesses such as retail outlets, motels and other industrial uses.”

It added that “the Toll Group firmly believes the primary function of airport managers should be to manage their facility as an airport and promote aeronautical operations for the benefit of Australia’s economy and population; unfortunately we see substantial evidence to the contrary.

The group calls for the “Australian Government to adopt methods by which the scrutiny and oversight of airport ownership and operations with
respect to pricing and service quality standards could be strengthened.”

It adds that “we would strongly argue against the removal of regulatory oversight and scrutiny currently applied to airport owners by the Productivity Commission and Australian Competition and Consumer Commission.

And not surprisingly IATA is not happy and it summarised its discontent to the PC thus:

Australian airports generally have high profitability and a tendency to increase charges wherever possible.
There are no adequate incentives for the airports to reach fruitful commercial agreements with airport users.
Price monitoring is not effective.
Proper commercial negotiations are lacking.
There are no clear rules on asset allocation between aeronautical and non-aeronautical activities.
There is an abuse of the investment process (NNI process) allowing the airports to increase charges on an ad-hoc basis.
There is a lack of transparency on financial information and detailed accounts.

Stinging attack

The most strident attack comes from The Board of Airline Representatives of Australia (BARA) which says that another “high level” review of the regime by the Commission is the wrong response to concerns over the conduct of SACL.

“Rather, the Australian Government should have initiated a detailed investigation by the ACCC into SACL’s price and non-price conduct, BARA says in its submission.

Reviews by the Commission argues BARA were never the intended response to concerns over the conduct of individual airport operators and the Commission’s role is to provide guidance and recommendations on the overarching approach to the economic regulation of airports.

BARA is concerned that “the Commission has previously been supportive of SACL, regardless of its poor commercial conduct. The current problems with SACL, therefore, stem from a failure by both the Australian Government and the Commission to hold SACL accountable for its poor commercial conduct.”

BARA maintains that the current problems with the [alleged] conduct of SACL can be explained, at least in part, by its different privatisation process compared to the other major airports.

“Adelaide, Brisbane, Melbourne and Perth airports‟ aeronautical assets were sold on a regulatory framework of CPI-X price caps based on the “single till” prices of the former Federal Airports Corporation (FAC). This regulatory framework suppressed the sale value of the aeronautical assets,” reasons BARA.

“With the removal of the CPI-X price caps on 1 July 2002, Adelaide Airport Limited (AAL), Brisbane Airport Corporation (BAC), Australian Pacific Airport Melbourne (APAM) and Westralia Airports Corporation (WAC) all benefited from substantial increases in prices, revenues and returns far beyond their expectations when forming their bids for the airport
leases. BARA estimates that APAM, BAC and WAC obtained a combined windfall gain of around $750 million with the move to the current prices monitoring regime.”

BARA says that while some of the increases in aeronautical prices from July 1 2002 were justified to fund future investment programs a large portion of the price increases represented unnecessary rent transfers from airlines to airport operators.

“In its 2002 Inquiry, the Commission placed little weight on the issue of rent transfers. The rent transfers are now embedded in the 2005-06, line in the sand asset valuations.”

“These rent transfers represent a loss to the Australian community. The Australian Government could have achieved far higher lease sale prices if the basis upon which aeronautical prices were to be set after the first five years of privatisation was known to all potential bidders.”

BARA says that the underlying problem for SACL is that its aeronautical prices were reset on a dual till basis prior to sale. “This means the rent gain associated with dual till pricing and asset revaluation appropriately accrued to the Australian Government. As a consequence, SACL’s shareholders have not obtained the large rent transfers currently enjoyed by the shareholders of AAL, BAC, APAM and WAC.”

“For AAL, BAC, APAM and WAC, it is clear that substantial windfall gains can be both obtained and endorsed by the Commission. Available evidence suggests that these airport operators now consistently earn more than 20 per cent per year on their actual investments in aeronautical assets.

We are great airports?

Naturally Sydney Airport – and others airports – do not agree with the general thrust of airline submissions.

Instead Sydney Airport argues that “given that increased commercial uncertainties associated with large and long term investments which have been more apparent over the last decade, it is even more important that investment in airports is not also subject to regulatory uncertainty.”

It adds that Sydney Airport “operates under a range of economic and operational regulations that are numerous, complex and intrinsically connected. These regulations are more onerous than those applying to other Australian airports or to any of the other top 50 airports in the world.”

“These regulations inhibit the economically efficient and timely operation and use of Sydney Airport and this materially fetters the airport’s contribution to the economy.”

And Sydney Airport hits out at price and quality monitoring which has been a key feature of the light-handed regime. While the airport supports its continuation it warns that it is “important that this regime is updated and serves its policy purpose as well as possible.”

In a swipe at the ACCC the airport says that “monitoring needs to respond to changing competitive and commercial circumstances, as the costs and benefits of monitoring are not static. Recent monitoring reports fail the contemporary policy purpose through the absence of useful, comparable and up to date information, and contain poorly founded data and unsupported and out of date commentary.”

“To have integrity and be useful the monitoring process must be consistent with the principles above and compliant with appropriate ISO standards. The current ACCC Monitoring Reports fail the basic test of natural justice,” the airport claims.

Sydney Airport notes that “in preparing its report the ACCC makes extensive use of airline surveys that seek to record the opinions that airlines express about the performance of airports. The details of these airline surveys are not disclosed and the anonymity of the airline sources is protected by the ACCC.”

The issue of passenger surveys is clouded by fact that at some airports the domestic terminal is owned by Qantas and in the case of Perth Airport much of the dissatisfaction directed at the airport was in fact caused by the lack of investment of that airline’s domestic terminal.

While airport, airlines and regulators play the blame game there is one issue that unites them all – transport infrastructure around airports which is squarely the province of governments and councils.

Sydney Airport in its submission has slammed the transport infrastructure. It calls the land transport access “inadequate” citing the following;

The train fare costs are prohibitively expensive for many users citing the example that it is cheaper to get to Bathurst than the airport from Sydney Central.
In addition, trains have inadequate luggage storage for passengers travelling to or from the airport
There is only one public bus route to Sydney Airport for 140,000 passengers, meeters and greeters, and staff each day.
There is congestion on the surrounding roads, particularly during the peak hours when the roads are also being used heavily by commuters.

“This inadequacy is the result of a lack of investment in roads, buses and rail over the past decades by the NSW government, which is responsible for providing for consumers land transport infrastructure to Sydney Airport and Port Botany,” says the airport.

“It is therefore critical that the NSW Government prepares the long overdue Sydney Airport/Port Access Plan in consultation with the community and other key stakeholders.”

The issue with road infrastructure was highlighted recently by a report Accessing Our Airports, complied by Booz and Co for the Tourism and Transport Forum.

It claims that Australian airports will not handle the expected fourfold increase in passengers in the next 20 years unless governments do something urgently about failing road infrastructure.

An example is Perth Airport with the $700 million Gateway WA project labelled as crucial to fixing the “bottleneck” around the airport.

The roads around the airport are already snarled for much of the day and passenger numbers are forecast to grow more than 250 per cent to almost 25 million a year in 2029-30.

At the same time airport employment is tipped to grow from 8,500 to about 37,000.

Gateway WA calls for widening Tonkin Highway to six lanes with a flyover interchange at Leach Highway to the airport and an interchange where Horrie Miller Drive meets Tonkin Highway. Work is due to begin in 2014 and finish by 2017, although government budget cuts in the wake of the recent natural disasters may de-rail that timetable.

The report says jammed roads around the airport delay airport access and give visitors a negative perception of Perth as a destination.

But the main issue is that without the upgrade the long term goal of integration of domestic and international operations scheduled for 2018 cannot be completed.

The report says a lack of long-term investment in transport to airports and poor planning resulted in severe congestion around Australian airports.
“There is little ownership of responsibility by government and little recognition of the role that transport to our major airports plays in wider city and national transport networks, ” the report says.

It claims State and Territory governments had not embraced the importance of growing demand for transport to airports as a key for national economic growth.

With airports a Federal responsibility and urban transport a StateTerritory responsibility, critical transport infrastructure to airports has too often fallen through the cracks, it says.

And Perth Airport’s submission to the PC highlights another more local issue.

“It is an unproductive historical outcome that travellers check-in for their international flight at Perth Airport in the City of Belmont and they arrive off their international flight in the Shire of Kalamunda. While the City of Belmont and WAC have very effectively engaged on all issues of mutual interest, including land transport planning, the same cannot be said of the Shire of Kalamunda,” says Perth Airport.

“This has resulted in patently short-sighted road network outcomes in relation to a key arterial road adjacent to Perth Airport. Land transport planning that is important for the development of Perth Airport should not be the province of the Shire of Kalamunda.”

The Shire of Kalamunda’s concerns are that the road improvements are to the south and west of the airport mainly for passenger traffic not to the east for freight in its shire.

Possibly the root of the problems surrounding Australia’s airports is a fundamental lack of understanding by politicians of the importance of aviation to economic growth not to mention the extraordinary growth of the industry.

To many politicians travel and tourism are “Mickey Mouse” industries and the history of aviation policy has been “policy on the run” and usually in the “run up” to the next election to garner votes.

We are now stuck with a hopeless industry mismatch of full deregulation of air services staffed by in most cases heavily unionised labour operating from monopoly airports.

Editors /Authors Note:
Many of the submissions to the Productivity Commission have sections removed from public viewing because of commercial confidentiality and thus it is not possible to make definitive comparisons, while some airports have not had an opportunity to fully address all the submissions with supplementary notes.