With a reported $75 billion in the resources pipeline, it is critical for WA that the dispute between Perth Airport and its biggest customer Qantas is resolved — and quickly — or billions of dollars of infrastructure will be in jeopardy and with it the ability of the airport to handle the boom.
The disagreement over charging, the focus of the $11 million Supreme Court writ issued on Monday, is just one of numerous agreements that must be reached for the airport to be able to handle the next resources boom that is about to take off.
The airport has a grand plan that involves the expansion of T1 — the international terminal — building a third runway and the relocation of Qantas by 2025 to the eastern side of the airport.
All of the plans require Qantas’ sign-off. It is heartening that Premier Mark McGowan wants to get involved and get the parties back to serious negotiations, though the dispute will be settled by the WA Supreme Court as government — neither State or Federal — has any power in the matter.
At the heart of the problem is that the Commonwealth set the pricing model all airports follow, with no outside arbitration provisions, when it gladly accepted $9.6 billion in proceeds from the airport trade sales.
According to a former airport executive, “a major factor in the higher than expected sales value was the fact that the Commonwealth did not require the airports to use the profits from business activities such as duty free and car parking to subsidise the aeronautical charges” that are levied on airlines and thus passengers.
“Had the ‘single till’ model been in place, aeronautical charges might be a few dollars lower but the Commonwealth would have received several billion dollars less and Australia would not have seen the massive investment in airport infrastructure particularly in the last 10 years,” the former executive said.