Perth Airport has launched legal action to recover what it says are over $11 million in unpaid aeronautical charges from Qantas, saying the airline group had unilaterally decided to short pay invoices for aeronautical services from July 1.
The airport says it has been negotiating with the Qantas Group for more than 18 months on a new aeronautical services agreement to supersede a previous agreement which expired on June 30.
“All other airlines which use Perth Airport had reached agreement with Perth Airport on charges for aeronautical services, effective 1 July 2018,” Perth Airport said in a statement on Monday.
“Qantas had not, but as an act of good faith, Perth Airport began invoicing Qantas at the proposed reduced rate from 1 July 2018.”
The airport says numerous attempts to negotiate an outcome with Qantas, which serves Perth with its Qantas domestic and international, Jetstar and QantasLink/Network Aviation operations, “have failed”.
“Despite the reduced price offered, Qantas unilaterally decided to short pay these invoices by around 40 per cent,” the airport said.
“The amount outstanding (July-October) totals approximately $11.3 million, which constitutes a material amount of revenue which is not sustainable. Accordingly, to bring the issue to a head as soon as possible Perth Airport was forced to commence legal action against Qantas in the WA Supreme Court.”
Qantas, meanwhile, has described Perth Airport’s new pricing as “unjustified”.
“Without agreement or reasonable justification, Perth Airport has been sending us invoices for higher fees and charges, when these were already too high to begin with,” Qantas Domestic CEO Andrew David said in a statement on Tuesday.
“While negotiations have been taking place, we have continued to pay Perth Airport, just not at the unjustified rates they have proposed.”
David says Perth airport is “one of the most expensive domestic airports that we fly to in Australia”.
“We are willing to pay fair and reasonable charges but want to ensure that our customers are not paying more in airport charges than is absolutely necessary.”
Qantas and Perth Airport have long had a fractious relationship. Earlier this year Qantas dropped plans to operate seasonal services from Perth to Johannesburg after being unable to reach an agreement over terminal access. Negotiations with Qantas to operate its new Perth-London nonstop Boeing 787-9 flights from what is otherwise its domestic terminal precinct at the airport were also hard fought.
The airport and airline are also continuing to negotiate over the terms of relocating all of Qantas’s operations at Perth Airport to an expanded international and domestic terminal precinct. (Virgin Australia moved across the airfield to new terminal facilities adjacent to the current international terminal in November 2015, allowing Qantas to expand into the former Virgin domestic terminal.)
In mid-November Perth Airport CEO Kevin Brown said the airport was looking to “accelerate” talks with Qantas over moving into a new “integrated domestic terminal project” by 2025.
“Qantas have a strong preference for a seamless transition for their passengers between domestic and international flights – and that’s what we are committed to delivering for all travellers,” Brown said on November 10.
“The current Terminals 3 and 4 are rapidly reaching their use-by date so we’ll be looking at new construction methods and new technologies to ensure an efficient and cost-effective outcome in the new integrated domestic terminal.”
The current dispute over aeronautical fees comes as the Productivity Commission is conducting a review into airport charging.
“This mindset of monopoly airports charging customers whatever they can get away with is why the Productivity Commission is reviewing airports and why a change in regulation is needed,” David asserted.
Perth Airport says its legal action is not affecting Qantas’s day-to-day operations there “and will have no impact on passengers”.
This is not the first time Qantas and an Australian airport have engaged in robust public debate – in May Qantas accused Canberra Airport of holding one of its Boeing 737-800s for “ransom” following a diversion due to weather in March 2017. Canberra Airport called that claim “absolute baloney”.