ACCC Clears Path for Airservices Price Increases

The Australian Competition and Consumer Commission (ACCC) has raised no objections to a proposal by Airservices Australia to increase prices for some of its monopoly services from July 1 2012.

The proposed price increases are part of the second year of Airservices’ five-year pricing agreement. In summary:

• Terminal navigation charges will increase at 24 airports by between 0.2% and 3.5%, and will decrease at six airports by between 1.0 and 5.1%
• Charges for aviation rescue and fire-fighting (ARFF) services will increase at 21 airports by between 2.4% and 10.4%, depending on location and aircraft category.
• Charges for en route services will decrease by between 0.7% and 1.1%.

The ACCC believes Airservices “has made sufficient progress on its commitments to improve consultation with industry on capital expenditure and to develop internal drivers of efficiency. These commitments were a critical component of the ACCC’s consideration and acceptance of Airservices’ five-year pricing agreement in 2011 as they help to ensure that Airservices invests prudently and efficiently manages its costs.

“Airservices is now providing its customers with more information that allows them to better assess and provide input on the costs and benefits of major capital projects. This has been a significant step in the right direction.”

Before giving the new charging regime the go-ahead, the ACCC consulted with stakeholders including airlines and aviation representative bodies. According to the ACCC release, the stakeholders were “overwhelmingly supportive of the changes made by Airservices to date”, but stakeholders also noted that “there was still scope for further development and improvement.”

The ACCC says it expects to see further improvement in future proposals by Airservices.

Airservices intends to implement its proposed prices on July 1.