Airservices looks to increase fees by 60% over next 5 years

“We’ve put a proposal in [to increase fees] with the ACCC on 2 April. It will become public once they’ve actually reviewed the documentation and ensured that it meets the requirements that they have, so imminently,” he said.

“The process then is that the airlines and the airline community who are impacted by any price increase actually put submissions in and there’s a review process by the ACCC who will then provide feedback to us in regards to the baseline proposal that we’ve put up.

“Obviously through that process there will be debates around the building block model. There’s a standard pricing model that actually generates a price. So, it’s not us just putting a price in, it’s actually us building a building block model, which is the methodology that a number comes out of.”

According to Sharp, the increases would not necessarily be per ticket or per flight, but would be spread more broadly across the sector.

“It’s a weighted average of all the movements, and our movements are based on the maximum take-off weight of aircraft. So that is averaged by location and averaged by service,” he said.

“We charge independently for three service lines: for en-route navigation, for terminal navigation, and for ARFF services. And that figure is effectively the composite of all of those.

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“We’ve actually taken the opportunity to propose to the ACCC – and again, I must emphasise the ACCC are the arbiters of this decision – that we push higher incremental pricing changes into the major capital city airports and lower incremental pricing changes into regional airports.”

Sharp also said that, as charges are based on movements rather than seats, passengers on larger planes would potentially see less of an impact than on smaller ones.

“International carriers potentially ask for reduced fares because they fly further. Regional airlines are obviously in a very, very cost-constrained environment. And so, we actually take a view across the likely impacts,” he said.

“We have consulted across probably 20 industry bodies to see whether we can get that balance as right as we can. We’ll get visibility of their feedback through the next stage of the process and the ACCC’s view on it.

“But just at a regional level, which is something that I was particularly interested in, the increases on average would be about $1 a year, we believe, on an airfare over five years. So that would be the scale at a passenger level.

“Now, obviously, each aircraft type does vary, and airfares vary, but based on an economy ticket, that was our estimate of what that flow through would be.”

Airservices had reduced its prices in 2019 but recently raised them due to rising costs.