The ACCC is seeking views from the aviation industry and other interested parties on its preliminary view to not object to Airservices Australia's proposal to increase the prices it charges airlines.
Airservices Australia is proposing a weighted average of 6 per cent price increase across its enroute navigation, terminal navigation, and aviation rescue and fire-fighting services.
Weighted average proposed price increase, by service line and total, is shown in this table:
| Service | Airservices' proposed price increase (%) |
|---|---|
| Enroute navigation | 4.5 |
| Terminal navigation | 6.7 |
| Aviation rescue fire fighting | 8.9 |
| Weighted average (nominal) | 6.0 |
The ACCC considers that Airservices' proposed price increase is unlikely to lead to it over recovering its costs or being above efficient levels. It should assist Airservices Australia to stabilise its balance sheet and continue to focus on service quality improvements, which has been a key issue for industry.
Airservices' proposed price increase will allow it to recover its forecast efficient forward-looking costs and earn a reasonable rate of return over the 2025 and 2026 financial years.
The ACCC has provided Airservices with recommendations to improve its future consultation and information sharing with stakeholders.
For future price notifications, Airservices should improve its stakeholder consultation processes, including information sharing. This will provide stakeholders greater certainty and clarity about how Airservices has developed prices, the timing and delivery of projects, as well as the breakdown of its costs.
The preliminary view paper is available at: Preliminary view.
The ACCC invites submissions in response to its preliminary view paper by 27 September 2024. Submissions received will be considered by the ACCC in making its final decision.
The ACCC will issue a final decision after it receives a formal price notification from Airservices.
Further information, including the preliminary view paper and Airservices Australia's draft price notification, is available at Airservices Australia 2023.
Background
Airservices Australia is a government-owned organisation and the monopoly provider of air traffic control services in Australia. It provides:
- Terminal Navigation - air traffic control services provided at an airport to aircraft in close proximity to that airport (that is, aircraft arriving and departing at the airport).
- Enroute navigation - air traffic control services provided to aircraft travelling through Australian airspace but not within terminal navigation range.
- Aviation rescue and fire-fighting - emergency rescue and fire-fighting services provided at an airport.
These services are declared under the Competition and Consumer (Airservices Australia Prices Surveillance) Declaration. Airservices must notify the ACCC of proposed increases to prices charged for these services.
The ACCC is required to assess the proposed price increase in accordance with the Competition and Consumer Act and then notify Airservices on whether it objects to the proposal.
The ACCC does not have the role of approving the proposed price increase.
Following the consultation process, the ACCC expects Airservices to lodge a formal notification of the price increase with the ACCC.
Airservices must also give written notice of the proposed price increase to the Minister for Infrastructure, Transport, Regional Development and Local Government who may approve or disapprove of the proposal. Airservices can only increase its prices if the Minister approves or does not disapprove of the proposal within 30 days.
Airservices provided an initial draft price notification to the ACCC on 27 September 2023, relating to the period from 2023-24 to 2026-27. Following consultation with the ACCC, Airservices provided a revised draft price notification on 13 November 2023 covering 2023-24 to 2025-26, thereby removing the 2026-27 financial year. There were no other material differences between the original and revised notifications.
On 10 July 2024, Airservices provided an amended draft price notification, following stakeholder and ACCC feedback. Airservices' amended notification proposes a single 6% weighted average price increase.
The last price notification from Airservices Australia considered by the ACCC was in 2015.
