Airport fees are becoming a hot topic as Australia moves away from regulated rates and New Zealand considers whether it would be wise to impose them.

Fuelling this debate is talk by the new owners of Sydney airport about peak-hour pricing, which is said to be aimed at regulating traffic flow at the airport, Australia's busiest gateway and hub, rather than at raising revenue.

Price controls at Australia's major airports ended on 1 July, five years after all except Sydney were privatised. The move was recommended by a productivity commission, but the Australian Consumer and Competition Commission opposed it. Now, instead of inflation-linked increases, airports can charge what they like. They are still required to consult with the airlines, but the Board of Airline Representatives of Australia (BARA) says that it has few options if such talks fail.Ê

For the next five years the government says it will monitor airport pricing and may reimpose price controls if it finds airports are abusing their monopoly.

With the end of controls, Melbourne airport plans a 40% increase in fees, Brisbane 50%, Perth 70% and Adelaide 130%. The federal government gave Sydney permission a year ago to hike its fees 97% - a move airlines criticised as mainly designed to boost the airport's value on the eve of its privatisation.

Sydney's sale in late June for A$5.6 billion ($3.1 billion) - roughly A$1 billion more than analysts predicted - has fuelled fears that the winning consortium, led by Macquarie Airports, might increase rates to help recover its outlay. Warren Bennett, BARA's director, warns that in view of last year's fee rise, Sydney has "no justification for any further increases in aeronautical charges", regardless of what the new owners paid.

Across the Tasman, New Zealand's commerce commission is set to release a report on its own two-year study of airport pricing. New Zealand airports must consult airlines before raising fees, but those fees are not regulated. The commission is considering whether to impose price controls. In the interim, Wellington airport has raised fees 10% and seeks a court order delaying the commission's report for fear it may block further increases. According to reports, Wellington wants a total fee increase of up to 80%.

Source: Airline Business