Has a monoply enjoyed by Airservices Australia’s in the provision
of air safety services and
regulation allowed it to get away with providing sub-standard services?
A handful of increasingly vocal industry critics claim it has, and they
point recent comments at senate estimates committee hearings
by Airservices Australia CEO Greg Russell as confirmation. Russell
recently to the Senate committee that the fire service at
Victoria’s Avalon Airport is a “sort of service” and “we are
working toward bringing it up to category, and there need to be some
amendments made to the fire service facility there”.

Industry insiders argue this isn’t good enough for an airport with well
over 600,000 passengers a year. It’s not as though
there are no competitors looking for a slice of the aviation fire
services pie. But they claim the ACCC shut them out recently when it decided to
approve a return to network-based charges for aviation rescue and fire
fighting (ARFF) services – rather than location specific pricing, the
system put in place in 1997 after a government-commissioned independent

standards require that any airport with over 350,000 passengers a year
must have a fire service. Airservices Australia currently provides this
service across Australia. It charges
levies at gateway airports (Sydney, Melbourne and Brisbane) and that
money cross-subsidises the regional airports, which in some instances
charging as little as 30% of the actual operating cost.

The system makes good business sense for Airservices, arguesTerry Godde of
Delta Fire Service. But it’s hardly good for competition, or consumers,
because it shuts out potential smaller competitors from bidding at individual airpots. The Board
of Airline Representatives of Australia argues that by reverting to network-based
charges, the ACCC has “effectively overturned one of the key principles
underpinning the reform of Australian airports and Airservices.”

Need comment from ACCC here.

Critics also say the ACCC decision has stymied competitition,
so no-one else is “going to want to go there”. Who said this quote: “Monopolies will do whatever they
can to maintain their position, they do not care about the consumer (the fare
paying passenger), they simply don’t have to, they have an entrenched position.”

Peter Fray

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Editor-in-chief of Crikey

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