Australian watchdog objects to Airservices' proposed price hikes

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The Australian Competition and Consumer Commission (ACCC) has issued a preliminary objection to proposed price hikes by air traffic control provider Airservices Australia.

Airservices' proposed prices are higher than needed to cover costs, said the competition watchdog.

"The ACCC needs to be satisfied that Airservices undertakes its capital expenditure prudently and efficiently. Airservices' customers are in a strong position to advise on whether or not this is the case," said ACCC chairman Graeme Samuel.

"In the current matter it appears that Airservices has not provided users with sufficient information that would have allowed them to assess the costs and benefits of some major capital projects."

Airservices had proposed to raise prices for terminal navigation and aviation rescue and fire-fighting services over the next five years. Aircraft operators landing at Australian airports and flying in Australian airspace would have to pay these increased charges.

Samuel also called on Airservices to improve its consultation processions before submitting pricing proposals and to "improve the transparency and accountability of its operating performance".

"Further, the ACCC considers that Airservices needs to adjust its proposed prices as Airservices would over-recover its costs by A$101 million ($108 million) (or 2%) over the five years," said the ACCC.

The commission is seeking comments from interested parties on its preliminary objection by 1 August.