The Australian Competition and Consumer Commission has decided not to apply access regulation* to the Domestic Express Terminal at Melbourne Airport because airlines are well protected by other arrangements, ACCC Chairman, Professor Allan Fels, said today.
"The decision comes after Virgin Blue asked the ACCC to find that the terminal is covered by access regulation. 'Access regulation' gives businesses the right to negotiate to use certain facilities. It also gives a right to arbitration by the ACCC if the parties cannot agree on terms and conditions.
"However the terminal is already subject to price control under the Prices Surveillance Act. In August 2000 the ACCC approved a price of $1.65 per passenger for use of the new terminal. This is much lower than the $2.20 sought by Melbourne Airport, and followed careful analysis of costs and passenger projections. These statutory price controls limit Melbourne Airport’s ability to exercise its market power over the terminal.
"Virgin Blue is already using the terminal under a commercially negotiated agreement. It has now asked the ACCC for formal right to use the terminal. This would enable Virgin Blue to seek ACCC arbitration if Melbourne Airport did not agree to lowering its price.
"In deciding not to apply the access regulations to the terminal, the ACCC was mindful that it has already determined a fair price for the terminal. The ACCC also notes Melbourne Airport has not denied Virgin Blue access to the terminal. Virgin Blue is using the terminal under a negotiated agreement that applies until 2007.
"This decision is based on the characteristics of this particular case. Any future request for access regulation of airport terminals will be considered on its merits".