Qantas the victim of greedy Perth Airport, court hears
Qantas has claimed other airlines agreed to charges imposed by Perth Airport because they couldn’t afford to challenge them.
A court battle between Qantas and Perth Airport over $11m in unpaid bills, has heard other airlines agreed to charges imposed by the airport because they couldn’t afford the cost of a legal challenge.
John Sheahan QC for Qantas delivered his opening statement in the West Australian Supreme Court on Wednesday, suggesting the case was a simple matter of two commercial entities being unable to agree on a reasonable price.
He acknowledged Qantas expected to pay a lower price to Perth Airport for a new seven-year agreement than it did for the previous seven years, but denied that was anything unusual.
“It would be wrong for Qantas to be motivated by anything other than self-interest in relation to a pricing dispute,” Mr Sheahan said.
He made the point that according to the Australian Competition and Consumer Commission, the amount of aeronautical revenue per passenger collected by Perth Airport had risen 60 per cent in six years.
At the same time, discounted airfares had fallen by 40 per cent over the last decade, he said.
“While airlines are making less, Perth Airport is doing very well,” said Mr Sheahan.
That prompted Justice Rene Le Miere to interject “when you say you’re making less, airfares have fallen but the number of passengers has increased, the revenue hasn’t actually fallen”.
Mr Sheahan also criticised Perth Airport’s references to regulations which meant it could not ban Qantas from using its facilities in the absence of an agreement.
He said it was obvious Perth would have “no interest in excluding its biggest customer”.
“If we remind ourselves why are we talking about this at all, it’s because Perth Airport wants to rely on deals it did with smaller airlines to justify the price it wants to charge Qantas,” he said.
“Rex is one of the airlines that did a deal. Its volume is a 30th of Qantas. An airline the size of Rex could not conceivably take on an entity of this scale. Qantas can afford to.”
Asked by Justice Le Miere if the same was true of Virgin Australia, Mr Sheahan said it was.
“Its financial circumstances are quite weak compared to those of Qantas,” he said.
“Even though Perth wouldn’t exclude Virgin, the transaction costs involved in working out the right answer (on price) might be prohibitive for an organisation like Virgin.”
Central to Qantas’s argument was Perth Airport’s decision to accelerate the depreciation of Terminal 3, out of which the airline operated.
By the end of 2025, Qantas was expected to vacate the terminal and relocate to airport central with other carriers.
Mr Sheahan said it was unfair for Qantas to have to pay the price simply for being the last tenant of T3.
“The accelerated depreciation is a product of business decisions made by Perth Airport to maximise its profits,” he said.
Once Qantas did move out, the terminal would be demolished and the airport would repurpose the land for their own financial benefit, he told the court.
“They will reserve the right to get for themselves, financial advantages of non-aeronautical use without passing on any benefit of that to Qantas, who paid the depreciation.”
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