Albury City
Reference: 30/60/0010
Contact: Mauro Dei-Agnoli
4 October 2006
Price Regulation of Airport Services Inquiry Productivity Commission
PO Box 80
BELCONNEN ACT 2616

Dear Sir

Subject:	PRICE REGULATION OF AIRPORT SERVICES INQUIRY

AlburyCity wishes to provide comment to the Productivity Commission on the following matters relating to the above inquiry;

1) Price Regulation

AlburyCity declares its support behind the current Australian Airports Association (AAA) submission to the Price Regulation of Airport Services Inquiry. Without reiterating the thrust of the AAA submission, Council itself supports the light handed regulatory regime provided by the Government.

The current regulatory regime as it relates to periodic monitoring of price and quality is considered to provide the necessary boundary conditions within which airports can operate in a fair market environment and provide adequacy of service for the mutual benefit of airlines and passengers alike.

With the objective of seeking to have airports operate at commercially sustainable levels and at the same time provide the quality of service sought by airline travellers it is necessary for regulatory intrusions to be restrained. All individual airports operate under their own unique set of benefits and constraints but it is generally recognised that regional airports operate under a significant scale disadvantage to the major ones. As commercial sustainability is directly related to passenger numbers it is necessary therefore that airports are encouraged and supported in customising commercial agreements with airlines and their customers. Such agreements which may incorporate commercial incentives (such as volume rebates, discounts and new carrier incentives) contribute to the economical operation of airports and the community which they serve. The unique constraints under which individual airports operate must be recognised and respected to allow them to be economically sustainable.

The absence of any evidence of systematic misuse of market power by airports supports the success of the current light handed regulatory approach in allowing airports to set charges for aeronautical services. By continuing this approach the Government is facilitating 
local control of commercial dealings with the respective stakeholders and allows the airports to provide the necessary investment in maintaining and enhancing service provision in the face of growing demand for air travel.

2) Regional airlines' access to Sydney Airport

It is understood that Bankstown Airport, as it always has in the past, is seeking to attract regional airlines into its facility on the grounds of advantageous economic value compared with the current legislative arrangements in place allowing regional airlines access into Sydney Airport.

AlburyCity wishes to point out that such an economic argument put forward by Bankstown is extremely narrow because it fails to address the disadvantages that would be imposed upon regional airline passengers if such a proposal were to be taken seriously.

Any form of relocation of regional services to Bankstown airport would adversely affect passenger travel on regional services to Sydney with connecting domestic and international connections.

The Bankstown airport master plan approved in March 2005 allows for the introduction of Regular Public Transport services (RPT) of up to 12 movements per day. Albury airport currently has 26 RPT movements per day to Melbourne, Sydney and Canberra with seamless transfers of passengers and their luggage to other domestic destinations and access to international destinations via Sydney airport.

Quick, reliable and easy access into capital city airports enabling accessibility to major clients and markets both within Australia and internationally has a significant positive impact on the development of regional economies and as such it is imperative that these arrangements be retained.
It is trusted the foregoing comments will be duly considered by the Productivity Commission in support of maintaining the current arrangements of price regulation of airport services and regional airlines' access to capital city airports.
Yours faithfully
Mauro Dei-Agnoli

Group Leader Projects