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Price regulation of airport services (2007)

Public inquiry

This inquiry has concluded. The inquiry report was released by the Australian Government on 27 April 2007.

The Australian Government asked the Productivity Commission to undertake a public inquiry, and report within 9 months, on the effectiveness of the current regulatory regime for the pricing of airport services and to advise on any changes that should be made to the regime.

A price monitoring regime for airport services was introduced by the Government in 2002 in line with recommendations made by the Commission in its 2002 report into Price Regulation of Airport Services. Provision was made to conduct a review of the regime within five years of its introduction.

Specifically, the Commission was to:

  • reported on whether airport operators have acted in a manner consistent with the Government's Review Principles (spelt out in the Terms of Reference), and on the effectiveness of the current form of price regulation of airport services having regard to the objectives of:
    • promoting the economically efficient operation of airports
    • minimising compliance costs for airport operators and the Government
    • facilitating commercially negotiated outcomes in airport operations, benchmarking comparisons between airports and competition in the provision of services within airports (especially protecting small users and new entrants against discrimination).
  • review aeronautical asset revaluation practices and dispute resolution mechanisms at each of the price monitored airports and advise on improvements that would be consistent with the Government's Review Principles
  • identify relevant alternatives to the current arrangements and the extent to which these alternatives would better achieve the Government's objectives in privatising the airports and moving to a light-handed pricing regulatory regime
  • analyse and, as far as practicable, quantify the benefits, costs and economic and distributional impacts of the current arrangements and alternatives to them.

In undertaking its assessments, the Commission is also to have regard to the declaration of airside services at Sydney Airport and subsequent consideration of this matter by the Federal Court, and to the outcomes of the Council of Australian Government's 2005 review of National Competition Policy.

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Media release: Productivity Commission to Review Price Regulation of Airports

Media release: Productivity Commission Report - Review of Price Regulation of Airport Services

Please note: The draft report and issues paper are for research purposes only. For final outcomes of this inquiry refer to the inquiry report.

Draft report

Issues paper

Key documents