Regional Airlines May Be Forced To Raise Fares In NSW

It's inevitable that regional airlines will cost more than inter-capital-city flights — there's fewer people to serve so it's harder to achieve economies of scale. But not all those costs are under the control of airlines, which is why the ACCC is seeking public comment on a plan that could raise ticket prices for passengers flying to Sydney.

Picture by Simon Sees

Sydney Airport wants to raise changes for regional airlines (who largely use T2, the same terminal as Virgin Blue) by 2.9%, which apparently will equate to around $4.70 per aircraft movement — a cost which will certainly be passed on. It's not a huge amount of money, but when you're routinely paying a couple of hundred dollars for a fairly brief flight, it's potentially an issue. Sydney Airport hasn't raised prices for regional services since 2001.

The ACCC is inviting public comment on the proposed increase; submissions are required by July 30. If the increase is approved, it will kick in from late October.

ACCC


Comments

    How dare they increase prices! They should keep them the same. Like when I was young in 1971, a pie and sauce was 13c, a Ford GT with shaker was $4500 and a house could be bought for around $10,000.

    Wow, what cheek; $4.70 per aircraft movement. Just imagine how much that would mean to each passenger when you spread the cost across all of them.

    I can't understand why businesses would increase their prices. I'd certainly never ask for a wage rise. ;)

      By the by, I was being sarcastic and can't see why $4.70 per aircraft matters, especially since it was 9 years since the last increase. Pretty small inflation rate if you ask me. I agree with WIllem; this really isn't a story.

    $4.70?
    Per aircraft?

    Unless that is a mistake, this isn't really a story

      Digging around on the ACCC site, it appears that the increase is between $0.13 and $0.22 per passenger depending on which confusing metric you read.

      I could be totally wrong about this, because the data isn't consistent and I'm not familiar with the industry jargon.

    Ever flown on Rex from Orange (pop. 40,000) to Sydney? It's a 4 hr drive or a 1/2 hour flight that costs between $130 - $330. This service gained a woeful reputation for cancellations due to lack of pilots while still charging high fares, before Rex finally managed to overcome the pilot shortfall. Prices on this service are still relatively high.

    Somewhere in the smallprint of regional airport management agreements there is apparently a clause that states that a single carrier may only service some locations. If they must raise prices to ensure ongoing service, then the carrier with exclusive rights should have to live up to strong SLA requirements.

      Perhaps I should have put my comment in the context of the Sydney airport price rise being passed on to regional travellers through the airline. It's a small amount but nobody wants to pay any extra for a service that isn't reliable.

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