Perth Airport takes Qantas to court over unpaid fees

Qantas has been depicted as a corporate bully in a court action brought by Perth Airport to recover $11m in unpaid fees from the airline.

Qantas has ditched plans to launch a Cairns-Tokyo service after the ACCC refused to approve its partnership with Japan Airlines. Picture: Getty Images

Qantas has been depicted as a corporate bully by Perth Airport in the opening statements of a court hearing over the airline’s alleged failure to pay $11m in fees.

In his opening remarks, barrister Neil Young QC for Perth Airport, told the West Australian Supreme Court the debt was accumulated between July and December 2018 when an aeronautical agreement expired.

Although other airlines had signed new long-term deals with the airport, Qantas was alleged to have resisted because the carrier objected to the proposed charges.

“Notwithstanding the expiry of the previous aeronautical agreement by Qantas and Perth Airport, Qantas continued between July and December 2018 to transport passengers and freight to and from the airport,” Mr Young said.

“On each occasion they did so, they used and obtained the benefit of services supplied by Perth Airport. Qantas did not pay a requested fee for those services. They tendered a small amount of money, significantly less than the value of the services.”

He said Qantas now accepted they must pay, and to that end had stumped up $2.23 million to Perth Airport less than a fortnight ago.

Mr Young suggested the money was only paid because of the impending court case, and still fell well short of what the airline owed.

“They’ve not offered any payments by way of interest reflecting the fact Qantas has unjustly withheld for three years money they should’ve paid to Perth Airport,” Mr Young said.

The court heard the airport and airline were still without a long-term agreement, as Qantas “continued to refuse to pay a fair value for services”.

“They have done so on the basis they will pay what they consider to be sufficient,” said Mr Young.

“Every other major airline, knowing all the relevant facts entered into agreements with Perth Airport at price levels similar to what we seek to recover from Qantas.”

The bitter payment dispute between Qantas and Perth Airport evolved amid a plan to relocate the airline from its existing terminals (T3 and T4) to a single integrated terminal by 2025.

John Sheahan QC for Qantas was expected to make his opening remarks in the case on Tuesday afternoon.

The court battle began as the Australian Competition and Consumer Commission delivered a blow for Qantas, rejecting the airline’s proposed joint business agreement with Japan Airlines.

ACCC chair Rod Sims said the push to co-ordinate pricing and flight schedules on routes between Australia and Japan would undermine competition to the detriment of passengers.

“We accepted that there was likely to be some short-term benefits from the alliance being able to jointly reinstate services more quickly when borders are reopened, which may initially stimulate tourism,” Mr Sims said.

“However the longer term benefits of competition between airlines are cheaper flights and better services for consumers, which is vital to the recovery of tourism over the coming years.”

Qantas domestic and international chief executive Andrew David said the ACCC’s decision was disappointing, and would sink plans to launch a new Cairns-Tokyo route.

He said without the ability to co-ordinate with JAL, the flights were not commercially viable for Qantas.

“We know the recovery of international travel is going to be slow and bumpy. It will take years for the whole travel and tourism industry to fully recover from Covid, so getting the policy settings right is going to be critical as key routes are rebuilt essentially from scratch,” he said.

“Getting that right will ultimately benefit the recovery of the Australian economy.”

JAL executive officer and senior vice president of route marketing Ross Leggett expressed similar disappointment with the decision.