Res Communis

Australian Airport Pricing Is Not Unfair, Commission says

by Sara M. Langston with the blog faculty

Source: Aviation Week

An Australian government review has determined that despite airline complaints to the contrary, airport charging practices are reasonable, particularly when compared with other countries.

While the government’s Productivity Commission found that the “light-handed regulation” of airport pricing is generally working well, it does recommend some changes aimed at giving the main competition watchdog the ability to proactively intervene if unreasonable pricing is occurring or suspected.

The Australian government began privatizing airports in 1997, culminating with the sale of Sydney Airport in 2002. A price cap system was imposed, although this was subsequently replaced with the light-handed regulation concept after a government inquiry found that the price controls risked “distorting production decisions and chilling airport investment.” [Full story]