Airlines for Australia and New Zealand (A4ANZ) has condemned Airservices Australia’s proposal to double its service charges and impose $150 million a year in extra costs on flying in Australia.
Chair of Airlines for Australia and New Zealand, Professor Graeme Samuel AC, said the proposal to increase fees by 103.2 per cent was unacceptable at a time when airlines and passengers were already facing a wave of rising costs across the aviation system.
“This is an extraordinary price hike from a government-owned entity that has too often failed to deliver the services airlines and travellers need and are already paying for,” Professor Samuel said.
“Airservices Australia has been repeatedly criticised for disruptions caused by air traffic control staffing failures. Flights have been delayed and cancelled due to Airservices rostering failures. It is simply not good enough to ask travellers to pay dramatically more for a service that is failing to meet reasonable expectations.”
He said it was “extraordinary” that these service failures have led to an increase in charges for travellers and airlines, rather than organisational changes.
“This proposed increase does not land in isolation. It is part of a broader cost wave now hitting airline services, with fuel volatility, higher government charges, increased security and credentialling costs, airport passenger charges, accessibility reforms and sustainability-related policy measures all adding pressure at the same time.”
Passenger movement charge increases
The condemnation also follows the Australian Government’s controversial increase to the Passenger Movement Charge (PMC) in its most recent budget.
The wider Australian travel industry reacted with near-universal condemnation to the PMC increase from $70 to $80 per traveller.
‘An absolute shocker’: industry bodies furious over tax hike on Australian travellers
On top of this, a new industry-funded Aviation Consumer Protection Framework is currently before Parliament, which the A4ANZ says will again add millions of dollars in additional costs for consumers.
“Airlines have warned governments for some time that piling new taxes, fees, charges and regulatory costs onto aviation will inevitably flow through to higher airfares, fewer services, or both. That is not a threat; it is the commercial reality of operating routes on tight margins,” Professor Samuel said.
“The pressure is felt first on thin and marginal routes, including services that connect regional communities and support tourism, trade and investment.”
The A4ANZ said that rising costs on marginal routes have led to the recent axing of international routes from Sunshine Coast and Cairns to New Zealand, between Darwin and Singapore, and on a range of domestic routes servicing key areas such as Uluru, Alice Springs, Wollongong, Mount Gambier, Coffs Harbour, Devonport, Burnie and King Island.
“Air travel should not become a luxury. Governments and regulators must consider the cumulative impact of these decisions before more routes are lost, competition is weakened and travellers are priced out of the market,” Samuel said.
Update: Airservices Australia has responded to A4ANZ’s criticism, telling Travel Weekly the proposed increase would add approximately $1.50 per passenger to an average domestic one-way flight, and around $1 for regional flights, assuming the increase is passed on in full. Airservices says this would be its first long-term pricing agreement in a decade, and that its prices have fallen 24 per cent in real terms since 2015-16 – a trend it says is unsustainable. It says the additional revenue is needed for capital investment and service improvements the industry has been calling for, which it argues will reduce delays and generate efficiency savings over time.
