Airport quality monitoring report issued

The Australian Competition and Consumer Commission today issued its 2002–03 monitoring report on quality of service at major Australian airports.

The report is the first since price caps on airport charges were removed, and complements the ACCC's forthcoming report on airport price monitoring for 2002-03.

The quality of service report indicates there has been a general maintenance of overall survey ratings by users compared with the previous year.

Passengers generally rated facilities at Brisbane, Melbourne, Perth, Sydney and Adelaide as good.

Airline users generally rated facilities at the airports as satisfactory to good.

New information on aircraft traffic indicates that Brisbane, Melbourne and Sydney do not appear to be experiencing significant runway capacity constraints. Average delays in the peak hour appear fairly low, at around two minutes for Brisbane and Melbourne, although at Sydney delays averaged four minutes.

The report also contains a number of objective indicators of the adequacy of facilities at each airport.

In respect of the connection between the quality monitoring and the ACCC's forthcoming price monitoring report, there is little evidence that operators have used their market power to reduce quality standards.

BACKGROUND

The ACCC has been publishing regulatory reports for major airports since 1998 in accordance with its monitoring responsibilities under the Prices Surveillance Act 1983 and the Airports Act 1996. Those past reports covered both price cap and quality monitoring.

A new price monitoring regime for airports was introduced on 1 July 2002, to apply for a five year probationary period. Airport charges are no longer subject to a price cap, but the ACCC is to report annually on pricing outcomes. The ACCC will also continue to monitor the quality of airport services. These price and quality results will inform a review to be held at the end of the five year period. The review will examine whether there have been unjustifiable price increases that warrant reimposition of price controls.

As part of this new regime, the ACCC reviewed its approach to quality monitoring. As a result, the 2002-03 report includes new objective measures of quality, as well as survey results.

The airports currently subject to quality monitoring are: Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Darwin, Alice Springs, Coolangatta, Hobart, Launceston and Townsville. However, the current report covers only Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra and Darwin, as these are the airports also subject to prices monitoring.

Quality monitoring is complementary to price regulation, as there is potential for airport operators to use their market power to reduce quality as an effective alternative to increasing prices.