For more than two decades a ‘light touch’ regulatory regime has existed in Australia (and New Zealand), which to all intents and purposes, allows airports to charge whatever they like to airlines that use their facilities.
It is so light it might blow away in a gust of wind, and it has enabled airports to make EBITDA margins (a measure of profitability) well above the average for other parts of the world, and even greater than found in the hi-tech sector globally.
While margins reduced during the COVID-19 pandemic, they were still very high even for normal times elsewhere.
The argument against this degree of profitability that is put forward by the airlines is that it is often not matched by the degree of investment into airport infrastructure that they require, although that is debatable.
With the pandemic coming to an end, this disagreement – which had gone on the back burner during its period of impact – is bound to raise its ugly head again.
Figures released by the Australian Competition and Consumer Commission will again put pressure on airports, either to reduce charges or to offer more bang for the airlines’ buck.
Meanwhile, the position in New Zealand could become even more acute, with IATA demanding urgent changes to the country’s Economic Regulatory Framework for Airports.