Perth Airport says Qantas, Virgin debts threatening operations

Perth Airport says Qantas and Virgin Australia’s unpaid bills totalling $36m have left it struggling to stay open.

Empty Perth Airport which is struggling to stay open in the current coronavirus crisis. Picture: Richard Wainwright/AAP

Perth Airport has revealed it is owed $20m by Qantas and $16m by Virgin Australia as it struggles to stay open to accommodate a raft of FIFO flights.

But Qantas has hit back, claiming the airport actually owed them $200m for the terminal the airline had to hand back.

As the coronavirus crisis continues to ravage the aviation industry, passengers travelling in or out of Perth have “fallen off a cliff”, resulting in the closure of three of the five terminals.

In April, 193,000 passengers went through the airport, down from 1.23 million in the same month last year.

Of those 193,000, 24,000 were from interstate or overseas with the remainder intrastate travellers, including FIFO workers on charter flights funded by mining companies.

Despite airlines collecting payment for those services, Perth Airport said it continued to see next to no flowthrough of funds that were vital for the continued operation of terminals.

Airport CEO Kevin Brown said this was having a devastating impact.

“I feel there’s been a lack of awareness from government, business and the community about how devastating coronavirus has been for airports,” Mr Brown said.

“We understand that airlines and the tourism sector have been hurt and we’re certainly not trying to downplay the impact of that. We understand because we’ve also taken a massive hit.”

The Qantas decision not to pay any aviation or lease payments for February and March had wiped $20m from the airport’s revenue, and Virgin Australia owed $16m.

Mr Brown said the money being withheld by Qantas had already been collected by the airline from its passengers and FIFO sector.

“While Qantas is not covered by the COVID-19 National Code of Conduct on commercial leases, their actions go completely against the spirit of the national code,” he said.

But Qantas International CEO Tino La Spina said the $200m owed by the airport to the airline was “money we could really use right now”.

“In fact they’ve been collecting all of the retail revenue for the terminal and haven’t paid us that money,” Mr La Spina said.

He said Qantas had told Perth Airport, they would pay outstanding fees soon, insisting they were far less than the $20m quoted

However that payment was conditional on the airport making a submission to the independent arbitrator on the value of the domestic terminal.

“They should be able to do this easily,” said Mr La Spina.

Liens remained on four Virgin Australia aircraft but the planes were no longer physically blocked by machinery following a written assurance from administrators (Deloitte).

Perth Airport was doing everything possible remain operational in order to service the FIFO workforce, allow freight to move in and out and help bring Australians home, said Mr Brown.

Almost all airport revenue was collected on a per passenger basis and when that fell away “the financial implications were swift and severe”.

“The infrastructure costs of the terminals remain as we need to stay operational even though airlines have cut back the number of flights,” Mr Brown said.

“We still need to maintain security processes, power, cleaning and airconditioning in terminal buildings and safety and maintenance work on our runways and tarmacs.”

Qantas and Perth Airport are currently locked in a court battle over $11m in unpaid fees.

The airline has also refused to pay rent to other airports around the country for February and March, in an effort to preserve its cash balances during the coronavirus crisis.