Aeronautical Services Agreement confirmed with airlines
May 31, 2007
Melbourne Airport today announced that it had reached a five-year pricing agreement with its international airlines, together with domestic carriers including Qantas, Virgin Blue and Tiger Airways. This will enable Melbourne Airport to meet the airlines' needs over the next five years.
The agreement locks in aeronautical charges and will allow the extensive capital program for Melbourne Airport to continue over the next five years.
Airport CEO Chris Barlow said this agreement provided stability in prices for airlines, allowing them to confidently plan their operations at Melbourne Airport.
“This agreement is clear proof that the Federal Government’s light-handed approach to airport regulation works,” said Mr Barlow. “We have been allowed to negotiate a deal directly with our airline partners.”
“We can get on with our job of delivering millions of dollars in capital projects to give the airlines space to grow their business.”
Of particular note, the agreement for domestic airlines is linked to CPI in year one, with the following four years having no price increases. This will reduce prices in real terms over the period.
International charges will increase on July 1st this year from $11.12 to $12.50 per passenger (excluding GST) in year one and linked to CPI thereafter. This will allow the airport to significantly expand and improve the capacity of the international terminal. For example, it will add additional aircraft stands and extend the baggage system.
Melbourne Airport is the lowest-charging international airport in Australia. It has remained so whilst delivering one of Victoria’s largest infrastructure development programs without Government funding over the past five years. The confirmation of this agreement will allow the airport to continue to deliver its half-billion dollar investment.