The Australian Competition and Consumer Commission today issued a draft decision to allow introduction of a "passenger facility charge" of $3.45 per arriving and departing passenger at Adelaide Airport.
The draft decision is in response to an application by Adelaide Airport Limited to pass costs of a "Multi-User Integrated Terminal" through the price cap. The MUIT proposal combines the currently separate domestic and international passenger terminals in a new terminal building.
"The regulatory arrangements covering price capped airports allow airport operators to apply to the ACCC to recover the costs of necessary new infrastructure expenditure through charging increases outside the cap", ACCC Chairman, Professor Allan Fels, said today. "In assessing such requests the ACCC is required to have regard to a number of criteria. These focus on the efficiency and quality outcomes of investment for the airport's operations, the relationship of the proposed charges to costs and support from users for the proposals.
"The $3.45 charge agreed to in the draft decision compares to AAL's request for a charge of $3.66. The difference arises from the rate of return methodology used and the allocation of costs between aeronautical and non-aeronautical functions of the MUIT. AAL's proposed a pre-tax real weighted average cost of capital of 8.89%. The draft decision is for 8.25%."
The ACCC now seeks submissions on the draft decision. The submissions will be considered by the ACCC in reaching its final decision.
