The Australian competition watchdog is calling for tougher regulation of airports to cut down on monopolistic behaviour on carparking and services to airlines.
In a submission to the Productivity Commission's inquiry into the economic regulation of airport services, the Australian Competition and Consumer Commission says the existing monitoring regime ofairport charges needs to change. It has called for regulations to be introduced that encourage proper commercial negotiations, taking away the ability of airports to exercise their market power.
"The ACCC is concerned that some airports may have used their market power to achieve monopoly profits in services provided to airlines and in carparking," chairman Rod Sims said. "The ACCC sees the use of market power contributing to higher prices or lower quality services. "This not only directly affects airlines and passengers that use the airports, but can have flow-on effects in related markets such as tourism.
"In the ACCC's view, more monitoring and inquiries will not constrain the airports' monopoly behaviour. An effective permanent solution is needed."
The ACCC has been monitoring Australian airports for over a decade and has reported annually on the prices charged for services to airlines and for customer services such as carparking.
Under its proposed regulations, the ACCC would be an arbitrator for negotiations on services provided to airlines.
For other services, such as carparking, court-enforceable undertakings that set minimum terms and conditions would need to be submitted by airports with significant market power. These agreements would promote efficiency and be more beneficial to consumers and businesses, the ACCC said.
When it launched its inquiry in August, the commission said it believed there was a need for better rather than just more regulation in the aviation industry. The commission reports in December, after public hearings this month.
