The Australian Competition and Consumer Commission has received a draft notification from Sydney Airports Corporation Limited of its intention to raise charges for aeronautical services at Sydney (Kingsford Smith) Airport.
The proposal represents an estimated increase of around 116 per cent on current aeronautical revenues. Part of the increase seeks to recover costs associated with a substantial program of investment recently undertaken. The remainder relates to an evaluation of the required rate of return on existing assets. Aeronautical charges at Sydney Airport have not increased for more than four years.
SACL publicly issued a draft aeronautical pricing proposal to interested parties in December 1999. This provided the basis for ongoing consultation between SACL and airport users. The ACCC has been an observer to this consultation process.
SACL has now submitted its revised pricing proposal to the ACCC for evaluation. Accordingly, the ACCC is now beginning its assessment, which includes a process of industry consultation. Given the complexity of the issues involved, this process is likely to be conducted over a period of several months. The ACCC will seek submissions from interested parties prior to releasing its draft decision. Further submissions, commenting on the draft, will then be sought prior to the ACCC making its final decision.
"Over the course of this year, aeronautical charges at Sydney Airport have been the subject of much industry and media attention", ACCC Chairman, Professor Allan Fels, said. "However, the ACCC has only now received a definite pricing proposal from SACL. In its assessment of the appropriate price level, the ACCC will be looking at a range of issues, including the efficiency of the cost base that SACL is working from to earn a return, and the reasonableness of the rate of return that SACL is seeking".