The International Air Transport Association says the aviation sector faces a capacity crisis but private airports are not the necessarily the answer. Photo / Getty Images
The International Air Transport Association says the aviation sector faces a capacity crisis but private airports are not the necessarily the answer. Photo / Getty Images
A global airline body has taken a swipe at privatised airports, saying they have delivered ''far too many bitter'' experiences.
The International Air Transport Association' s director general Alexandre de Juniac said the aviation sector faced a capacity crisis but private airports were not the necessarily the answer.
Governments aroundthe world struggled to build quickly and with a shortage of funds many were looking to the private sector for solutions.
''We need more airport capacity. But be cautious. Expecting privatisation to be the magic solution is a wrong assumption," he said at IATA's annual meeting in Sydney.
"As customers of many airports in private hands, airlines have far too many bitter experiences.''
IATA had found privatised airports were more expensive.
But there is little difference in efficiency or investment levels compared to airports in public hands," said de Juniac.
Auckland Airport was privatised in 1998 although Auckland Council owns a 22 per cent stake, Wellington Airport is two-thirds privately-owned by Infratil, with the remaining third owned by the Wellington City Council, while Christchurch Airport is publicly-owned by the government and the Christchurch City Council.
The results of airport privatisations run counter to that of airline privatisation, which saw the cost of travel drop dramatically.
The average return fare (before surcharges and tax) of US$380 is forecast to be 59 per cent lower in 2018 than it was in 1998 after adjusting for inflation.
''Airlines do not accept that privatising airports must lead to higher costs. And neither should consumers or voters. How can making the transport infrastructure more expensive— which means less competitive — be a legitimate public policy objective?" said de Juniac.
The International Air Transport Association says the aviation sector faces a capacity crisis but private airports are not the necessarily the answer. Photo / Getty Images
IATA, which represents 280 airlines providing more than 80 per cent of capacity, will vote on a resolution on the privatisation of airport infrastructure calling on governments to:
• Focus on the long-term economic and social benefits of an effective airport as part of the country's critical infrastructure.
• Learn from positive experiences with corporatisation, new financing models, and alternative ways of tapping private sector participation.
• Make informed decisions on ownership and operating models to protect consumer interests.
• Lock-in the benefits of competitive airport infrastructure with firm regulation.
The attack comes as Airlines for Australia and New Zealand (A4ANZ) attacks counter claims from airports in this region.
Graeme Samuel, chairman of A4ANZ said claims by the Australian Airports Association (AAA) and Airports Council International (ACI) that Australia's airport regulatory framework was a "global role model" were laughable.
"A model in which the regulator only has a watching brief has set both Australia and New Zealand up as global leaders in making airport shareholders rich at the expense of passengers," Samuel said.
"When airports are raising prices and earning more per passenger while quality stagnates and congestion worsens, how can they pretend to be enabling economic activity?"
With a Productivity Commission Inquiry into airport regulation in Australia, and New Zealand's regulatory model under scrutiny, attention had turned to how the sector could operate better to support genuine commercial negotiations between airports and their customers.
The New Zealand Airports Association has said analysis of airport margins in NZ shows that they operated very efficiently.
They passed on lower operating expenses to customers than other airports (for example, staff costs, consultancy, insurance and energy) with most charges going towards covering depreciation costs on infrastructure investment, tax and a closely monitored regulated return on their investment, said association chief executive Kevin Ward.
The regulatory regime covering airports in New Zealand had been in place for more than 10 years, Ward said.
"This has been refined through a series of very detailed reviews by the New Zealand Commerce Commission that places a sharp focus on what's best for consumers, airlines and airports."
• Grant Bradley travelled to Sydney courtesy of IATA
