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Virgin ‘too weak’ to challenge Perth Airport fees, says Qantas QC

written by Adam Thorn | September 16, 2021

Qantas has argued in WA Supreme Court that the only reason other airlines have agreed to charges imposed by Perth airport is that they couldn’t afford to mount a legal challenge.

The airline’s QC, John Sheahan, said this was even true of Virgin Australia, whose financial situation he described as being “quite weak” compared with Qantas’.

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Perth Airport has accused Qantas of owing it $39 million over a six-month period in 2018 but only receiving $22.89 million.

It follows the airline not signing a new seven-year deal to use the airport’s facilities in July of 2018, leading to a disagreement as to the amount owed.

Sheahan insisted Qantas were looking only for a fair deal, and pointed to data released by the ACCC that suggested the amount of aeronautical revenue per passenger collected by Perth Airport had risen 60 per cent in six years.

“While airlines are making less, Perth Airport is doing very well,” said Sheahan.

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Justice Rene Le Miere interjected to state that “when you say you’re making less, airfares have fallen but the number of passengers has increased, the revenue hasn’t actually fallen”.

Sheahan also criticised Perth Airport’s references to regulations stopping it from banning Qantas from using its facilities in the absence of a deal.

“If we remind ourselves why are we talking about this at all, it’s because Perth Airport wants to rely on deals it did with smaller airlines to justify the price it wants to charge Qantas,” he said.

“Rex is one of the airlines that did a deal. Its volume is a 30th of Qantas. An airline the size of Rex could not conceivably take on an entity of this scale. Qantas can afford to.

“Even though Perth wouldn’t exclude Virgin, the transaction costs involved in working out the right answer (on price) might be prohibitive for an organisation like Virgin.”

Earlier this week, Neil Young QC, representing Perth Airport, said Qantas had used its services and paid less than it should have, based on its own calculations rather than an agreed position.

“Qantas has continued to land planes at Perth Airport, carry freight, and to use the airport’s facilities and services without any agreement. Indeed, without any ongoing licence or right to operate terminals 3 and 4.

“Qantas has continued to refuse to pay a fair value for services and facilities since December 17, 2018. They have done so on the footing they do not need to make any commitments, whether short or long term. It’s done on the basis they will simply tender an amount of money they consider is sufficient.”

The case continues.

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2 Comments

  • Bryan

    says:

    Just another example of a entity trying to ‘screw over’ QANTAS.
    The costs airports here charge airlines are exorbitant & unnecessary.

    This has come about by various successive Federal Govts handing control of airports to private enterprise, instead of the former DCA looking after them.

    It’s amazing that the TWU hasn’t stuck its’ nose into this, as they’re always ripe to stick the boot into QANTAS!

  • Adrian P

    says:

    How long will it be before QANTAS ends up in court regarding a dispute with ground service companies.

    Would private pilots get away with partial payment of airport fees.
    By continuing to use a service, is it not inferred that there is an agreement to the terms and conditions of using that service .

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