Going In To Bat For Rex
17 December 2010
Taree would be effectively without an airport if regional airlines such as Rex were forced to use Bankstown instead of Sydney Airport, a Taree businessman has warned.
The additional time for Taree passengers to travel from Bankstown to the city would make it quicker to drive from Taree to Sydney, solicitor Maurie Stack OAM says.
This would have a significant impact on the growth and development of the Manning and Great Lakes region, he believes.
Mr Stack, chairman of Stacks The Law Firm, this week came out in strong support of a suggestion by Rex (Regional Express Airlines) that the Australian Competition and Consumer Commission (ACCC) head an inquiry into the fees and charges levied on airlines by Sydney Airport Corporation Limited (SACL) prior to the deliberations of the Productivity Commission.
“To my mind there is not the slightest doubt that Macquarie Bank (owner of SACL) have made the most of their monopoly position at Sydney Airport and that their inflated costs are being passed onto consumers and run the real risk of forcing regional airlines such as Rex to Bankstown,” Mr Stack told the Times.
“If that ever happened Taree would be effectively without an airport because the additional time to travel from Bankstown to the city would make it quicker to drive to and from Sydney.”
Mr Stack is a regular airline commuter, with his family’s locally established firm now having more than 200 employees and branches across New South Wales, including offices in Macquarie Street, Sydney.
He supported statements by Rex this week, applauding the federal government’s decision to bring forward a Productivity Commission inquiry into privatised airports (originally scheduled for 2012) as a result of widespread concerns by the aviation community, the International Air Transport Association (IATA) and the ACCC over the pricing policies of the Sydney Airport Corporation.
Rex pointed out that the ACCC 2008-2009 Airport Monitoring Report released earlier this year suggested there is a possibility of SACL engaging in monopoly rents but stated there was a lack of conclusive evidence for this.
Both the ACCC Monitoring Report and the Productivity Commission do not directly examine SACL’s actual fees and charges. Accordingly, Rex has made a submission to the Federal Government highlighting the need for a specific factual investigation of pricing and urging it to give notice to the ACCC under Part VIIA of the Trade Practices Act to conduct this type of inquiry into SACL.
Such an inquiry will provide the ACCC with the legislative authority to compel SACL to fully disclose how it allocates costs and sets pricing between different types of users at Sydney Airport including regional airlines, a Rex spokesman said.
“This inquiry will provide the Productivity Commission with the factual basis on which to make an informed decision and also be invaluable to the government when formulating aviation policy in relation to the regional aviation users of Sydney Airport.”
Rex is Australia’s largest independent regional airline, operating a fleet of more than 40 Saab 340 aircraft on 1300 weekly flights to 35 destinations throughout New South Wales, Victoria, Tasmania, South Australia and Queensland.
The Rex Group comprises Regional Express, air freight and charter operator Pel-Air Aviation and Dubbo-based regional airline Air Link, as well as the Australian Airline Pilot Academy.
The Rex spokesman said SACL has never disguised its ambition to drive regional aviation away from Sydney airport to Bankstown so that it could attain even more astronomical profits than the $698m EBITDAR it is now enjoying.
“While some defined aeronautical charges are currently regulated, it has time and again sought to chase away regional operators by all other means possible.”
Earlier this year the airport corporation told Rex it intended to charge an airport parking fee that would translate into an additional annual cost of $3m for the airline. Rex spent a great deal of effort and legal fees to mount a challenge through the ACCC, which threw out the airport operators’ attempt.
SACL also sought to increase aeronautical charges, and again after opposition by Rex, the ACCC ruled there was no justification for a price increase. Last week Rex received yet another notification of a price increase for its Sydney Airport hangar lease.
The Rex spokesman said regional air services are a lifeline to the regional communities like Taree “and we cannot have this threatened by the pure commercial interests of Macquarie Bank”.