The Australian Competition and Consumer Commission has not objected to temporary price increases for air traffic control, airport rescue and firefighting services provided by Airservices Australia.
ACCC Chairman, Professor Allan Fels, said today that this follows a four year period of cumulative, real price reductions by Airservices Australia of more than 20 per cent and Airservices Australia proposal to return prices to their existing levels by 1 July 2003 unless it notifies the ACCC otherwise.
"Overall, the average price increase is 5.1 per cent", Professor Fels said. "This translates to an increase of between 0.1% and 0.2% of the fare, estimated to be not more than $1.47 for an international fare from Australia or $1.15 for a domestic fare.
"The ACCC believes this represents a fair balance between the interests of Airservices Australia and the interests of travellers".
Airservices Australia claimed the increases were required to offset the effect on profits of lower traffic volumes as a result of the events of 11 September 2001 and the end of Ansett. It proposed price rises that would result in a return on revenue of 9.1 per cent in 2002-03.
The new prices are scheduled to take effect from 28 July and comprise:
- a 3.9 per cent increase in en route air navigation services
- an average increase of 5.9 per cent in terminal navigation charges, with increases at nine of the 27 airports where services are provided
- an average increase of 8.1 per cent at the 16 airports where rescue and firefighting services are provided.
The ACCC decided that while there was justification for a price rise in the 2002-03 financial year, it could not extend its agreement beyond this period without a review of traffic forecasts.
Professor Fels said an important factor in the decision was the fact that Airservices Australia had taken the initiative to reduce prices in recent years when airline activity has been growing.
The ACCC put out an issues paper in May and its preliminary view in June. Submissions were received from Qantas, the International Air Transport Association, Virgin Blue, the Board of Airline Representatives of Australia, British Airways, Adelaide Airport, Gold Coast Airport and Karratha Airport. Most argued against the proposed increases in charges.
Airservices Australia is the only provider of such services in Australia and is therefore 'declared' under the Prices Surveillance Act 1983. With its monopoly position, Airservices Australia must notify the ACCC of proposed price increases.