Qantas: Five words in a statement about Virgin reveals flag carrier’s rage with Perth Airport

One the surface it was a note of support from Qantas towards embattled rival Virgin, but it’s reignited a furious stoush with one of the country's biggest airports.

ANALYSIS

It was an extraordinary intervention from a competitor in the defence of its bitter rival.

But Qantas’ statement on Friday berating Perth Airport for its effective impounding of several Virgin Australia jets appeared to prove the old adage correct: the enemy of my enemy is my friend.

It’s laid bare an ongoing multi million-dollar spat between the flying kangaroo and the country’s fourth busiest airport that, Qantas has claimed, has hampered Perth from becoming a major Australian air hub and put “passengers over a barrel”. It’s claims the airport denies.

Last week, Virgin Australia went into voluntary administration after the heavily indebted carrier – majority owned by several foreign airlines – struggled as passengers dried up in the face of COVID-19 lockdowns.

The administrators Deloitte have said they are confident a buyer can be found that will keep Virgin in the air once the pandemic has passed given Australia has some of the busiest air routes in the world. Virgin Australia continues to operate under administration.

Perth Airport has blocked four Virgin Australia aircraft from leaving to ensure it is paid $16 million it claims it is owed by the collapsed airline.

However, eyebrows were raised when Perth Airport parked vehicles, including a bulldozer, in front of a number of Virgin’s planes.

Perth Airport has said it wants Virgin to recover, but it’s owed $16 million by the airline and had seized the aircraft to protect its interests.

You might think Qantas would quietly smirk from the sidelines at Virgin’s humiliation. After all, just last month Qantas was urging the government not to bail out its rival.

But on the contrary, it leapt to Virgin’s defence and has said it was “no way to treat a customer of 20 years”.

“Protecting your interests is one thing but parking a bulldozer in front of an aircraft while saying you’re ‘working to secure an agreement’ is ridiculous,” Qantas said in a statement.

“Even by Perth Airport’s standards, this is extraordinary behaviour.”

Qantas and Perth Airport haven’t been BFFs for some time. Picture: AAP Image/Darren England.

FIVE WORDS

Press releases issued by big corporates are often so anodyne, it’s like they have been shorn of any skerrick of emotion or passion. Which made Qantas’ statement all the more stunning. It appeared to drip with concentrated hospital grade rage.

Just read five of those words again: “Even by Perth Airport’s standards…”. It shows that, as far as Qantas is concerned, this is no one-off but a pattern of behaviour from the airport.

Perth Airport released a statement soon after which said it was, “puzzled by Qantas’s latest comments and the motivations behind them”.

But it shouldn’t be. At the heart of this issue isn’t Virgin and its current woes; it’s an ongoing battle between Qantas and the airport with the pair facing off in an active high-profile court case.

A legal spat over landing fees and terminal charges has dragged on since 2018 with Qantas chief executive officer Alan Joyce saying last year it was the “perfect example of just how broken the system is”.

Indeed, later in Friday’s statement, Qantas referred to the dispute over “excessive charges”.

Back in 2018 things were rosier. Qantas had just rerouted one of its two London flights via Perth instead of Singapore. It had plans to introduce services to Paris and Johannesburg from the Western Australian city.

Then in December of that year, Perth Airport sued Qantas alleging it had charged the airline $27.8 million to use the airport between July and October that year, but Qantas had only paid $16.5 million. The red roo owes it $11.3 million, the airport has said.

Qantas boss Alan Joyce has said Australia’s main airports have airlines and passengers “over a barrel”. Picture: Lisa Maree Williams/Getty Images.

‘PASSENGERS OVER A BARREL’

Airlines and airports have fractious relationships at the best of times with carriers often grumbling about sky high landing fees. That’s a particular issue in Australia where most capitals are served by a single airport.

At the National Press Club last September, Mr Joyce said that in Australia the main airports were “the only game in town”.

“Their business model is based on it. We can’t just up stumps and fly to the next airport 15 minutes down the road. They have airlines and passengers over a barrel.

“The status quo isn’t working: fees and charges from monopoly airports are excessive and damaging the economy.

“And airports continue to reap super profits because there is no real threat of intervention to moderate their behaviour,” he said.

It should be noted that Qantas posted a profit of $1.3bn last year.

Mr Joyce has claimed the disputed Perth fees amounted to a 40 per cent rise over five years which they were very unhappy about shelling out for.

“I can’t see us flying from Perth to Paris before 2022. Had we not had this dispute we could have been flying the route by early 2020.”

In January, the Supreme Court of WA told the airline to hand over thousands of documents so Perth Airport could check the fees it was charged at other airports and the profitability of its Perth routes, The Australian reported.

Last year, the airport said Qantas was the only airline that had not agreed its landing fees.

In a statement to news.com.au, a Perth Airport spokesman said the firm was, “on the record as repeatedly trying to seek a commercial resolution with Qantas and has made multiple offers to achieve this, all of which have been rejected by Qantas”.

Perth Airport has said it just wants what is rightly its – from both Virgin and Qantas. Picture: AAP Image/Richard Wainwright.

TERMINAL TROUBLE

Another sticking point is where Qantas’ planes depart from and the costs of terminal space. Perth’s international and domestic terminals are on opposite sides of the airport which can make connections lengthy.

Qantas wanted any future international flights to leave from a remodelled domestic terminal 4 where it is based. Perth Airport has been keen to consolidate all overseas flights at its international terminal 1. It has allowed Qantas’ London and Singapore flights to fly from T4 and has said “any new direct route service to Europe” could leave from terminal 3.

The airline and airport are also in dispute about the value of terminal 4. The carrier has said it’s worth “well over $150 million”.

In fighting talk, it has warned it could treat Perth Airport the same as it claims the airport has treated Virgin.

“How would they feel if we talk the same approach to collections as them?” Qantas said on Friday.

Or, conceivably, the reverse could happen and Perth Airport might decide at some point to block a few Qantas planes to recoup the $11 million it has said it is owed.

“In relation to terminal 4, we are following an agreed joint independent valuation process. Qantas is fully aware that an independent valuer has been agreed and appointed because they have been involved in the process,” the airport said.

On why it had barricaded in the Virgin jets, Perth Airport said on Friday that it was “standard practice” to hold the planes, none of which were currently in use and had been parked for “some time now”.

“Virgin has significant outstanding invoices for airfield and terminal use charges – money the airline has already collected from its passengers. Perth Airport needs to protect its own interests.”

The airport said it wanted to “work with Virgin’s administrators” to get the airline back into shape.

“Maintaining a two-airline system in Australia Post-COVID-19 is absolutely essential for the aviation and tourism sectors, and the broader economy.”

Qantas and Perth Airport’s bad tempered spat continues. Both sides show no signs of backing down anytime soon, virus or no virus.