ACCC not to object to price changes for aviation rescue, fire fighting services

The Australian Competition and Consumer Commission will not object to a proposal from Airservices Australia to change the prices of its aviation rescue and fire fighting services, ACCC Chairman, Mr Graeme Samuel, said today.

Airservices Australia is the monopoly provider of fire fighting and rescue services at Australian airports and is required, under the provisions of Part VIIA of the Trade Practices Act 1974, to notify the ACCC of proposed price increases.

"This pricing proposal, which changes the structure of Airservices' pricing, was developed after the ACCC objected to proposed price increases for Airservices' ARFF services in 2004", he said. "The ACCC was concerned that the previous pricing structure was not likely to be efficient or equitable.

"Airservices continues to face incentives to reduce its costs through the administration of long-term pricing proposals. The new pricing methodology proposed by Airservices will promote economic efficiency.

"Given that it does not appear such competitive entry into ARFF services will occur during the period of Airservices proposal, the ACCC maintains its view to not object to Airservices' proposal".

A copy of the ACCC's final view and Airservices Australia's formal price notification will be made available on the ACCC's website.

Background

Airservices Australia is the monopoly provider of en-route air navigation, terminal navigation and aviation rescue and fire-fighting services in Australia. These services are declared under Part VIIA of the Trade Practices Act 1974, which means that Airservices must notify the ACCC when it wishes to increases prices. The ACCC may object or not object to the proposed increases.

Airservices Australia's draft pricing proposal follows the ACCC's 2004 decision in relation to Airservices' long-term pricing proposal (2004-2009) to object to price increases for ARFF services on the basis that the structure of pricing was unlikely to be efficient and should be reviewed before being incorporated into long-term pricing arrangements.