Qantas v Perth Airport stoush gets ugly

A court battle between Qantas and Perth Airport has heard the airline charged passengers full price for airport services but failed to pass it on.

The Qantas business lounge at Perth Airport.

Qantas has been accused of charging passengers more for airport services than what the airline was paying Perth Airport, in a court hearing over $11m in unpaid fees.

The airport is trying to recover the money from Qantas, accumulated in the second half of 2018, after an aeronautical services agreement lapsed.

The West Australian Supreme Court heard in the absence of an agreement, Qantas settled on its own payment system which allegedly resulted in the shortfall.

Appearing for Perth Airport, Neil Young QC said notifications to the International Air Transport Association showed Qantas was adding $17.28 to airfares for airport services, which was the amount normally levied by Perth.

But he said the airline paid back only $10.61 per passenger, effectively short-changing the airport.

“For international charges, Qantas has passed on to their customers amounts that are greater than they have paid us and that not only applies to the last 6-months of 2018 but continues right through to the current time,” Mr Young said.

“Qantas has been retaining the difference.”

He alleged the same was happening with domestic airfares but it was more complicated because Qantas operated out of two terminals but only paid fees on one.

“That category of domestic is a little bit special in that you have this blending of charges,” said Mr Young.

“Passengers using T4 where no terminal charges are applicable, are being charged $9.26 but that’s another dimension to the unjust enrichment we say has transpired.”

John Sheahan QC for Qantas was expected to portray Perth Airport as a money-hungry monopolist when he delivered his opening statement on Wednesday.

The airline has previously accused the airport of “price gouging” and seeking an almost 40 per cent increase in charges over five years.

When Qantas declined to sign the new agreement, Perth Airport began to invoice the airline at the higher rate regardless.

The conflict over the charges followed the launch in March 2018 of Qantas’s most successful long-haul service in its history, the non-stop Perth-London flight.

With load factors above 90 per cent and record customer satisfaction ratings, Qantas was preparing to deliver a second daily service on the route from April 2020.

But the arrival of the Covid pandemic derailed those plans, and in recent weeks Qantas boss Alan Joyce suggested the airline could move those direct London flights to Darwin instead.

He said Qantas had amassed much experience operating international repatriation flights in and out of Darwin, and had teams “looking at what could be done on lounges for example”.

“Given the conservative nature of Western Australia, we again hope for the best but have to plan for the worst,” Mr Joyce said last month.

“So if the only option is to operate the London flights via Darwin, we think we’re very capable of doing that. We will have a look at whether that’s a long-term position or a short-term position.”

Mr Young told the court on Monday, that legally Qantas could stop flying to Perth but in practical terms, the airport was obliged to provide services to airlines whether they paid their bills or not.