A change in the way Sydney airport charges landing fees could lead to their reregulation at Australia's major gateway and hub.

Sydney's plan to switch from per-tonne to per-passenger domestic landing fees provoked a complaint from Virgin Blue, Australia's discount airline. It argued to the National Competition Council, a government advisory board, that Sydney Airport is capable of using its market power to damage airline competition. Virgin Blue claims Sydney's fee change would increase its charges 50%, while charges paid by Qantas, which operates many larger aircraft, would stay the same or even drop.

In a draft decision the council has agreed with Virgin's market power claim. If the council sticks to this view, the government will be able to step in as an umpire in future fee disputes between the airport and airlines. Australia dropped airport fee regulation a year ago, but this could effectively reintroduce it at Sydney.

Source: Airline Business