Qantas and Perth Airport continue to clash as aviation sector nose dives
Compared to pre-pandemic levels, Qantas has seen passenger numbers plummet to 5 per cent and 1 per cent on domestic and international routes, respectively, and has taken on an extra $1.6 billion of debt since March.
The airline hit back at the airport’s claims and said charges were far less than the airport quoted.
It also confirmed it was using the payment as leverage to force the airport to make a submission to an arbitration process to determine the value of Terminal 4, which the airport took control over from the airline in January 2019.
Under the agreement to take back the terminal, the parties appointed an arbitrator to determine its value but they have not yet figured out the scope of the valuation.
Qantas’ top brass believes the terminal is worth $200 million but the airport puts that value at closer to $50 million.
Both sides have lashed each other for airing the issue publicly.
On Tuesday, Qantas chief executive Alan Joyce said the airline was having good discussions with other Australian airports but the “noisy” Perth Airport was taking an unnecessarily aggressive approach throughout the pandemic.
He pointed to the decision to blockade Virgin Australia planes on the tarmac after the company went into administration in late April.
“[Other airports] know we’ve stood down 25,000 of our people, they know that the senior management here is not getting paid, they know the board is not getting paid. Some of these airports are open to share the pain with us,” Mr Joyce said.
“Unfortunately, Perth Airport doesn’t seem to be open to discussions … they’ve got more flying than any other airport in the country given the fly-in, fly-out market, given the fact we’re flying from Perth to London a couple of times a week.
“We can’t seem to get sense prevailing there. We can’t seem to close a deal.”
Qantas simply phoned Perth Airport in early April and advised us that it would not pay aviation fees … no consultation, no negotiation.
Perth Airport spokesman
A Perth Airport spokesman claimed Qantas was engaging in “extraordinary corporate spin” and its $200 million figure for Terminal 4 was pulled from the air when public scrutiny heated up over the airline’s deferral of fees.
“Just 10 days ago Qantas said the terminal was worth $150 million,” the spokesman said.
“With public scrutiny of their refusal to pay any aviation or lease charges, Qantas has now claimed it is worth closer to $200 million. To balance the record, we believe the terminal value is closer to $50 million.”
Qantas insists the terminal is worth $200 million.
The airport spokesman also refuted the airline’s claim it was not engaging in the arbitration process.
“Qantas is fully aware of the situation as they have agreed to the process which they are now seeking to undermine by linking it to settling the debts and inappropriately commenting publicly on the issue,” he said.
The airport spokesman said they had reached agreements with 25 out of 26 airlines but Qantas was the outlier and it was threatening the airport’s ability to operate during a precarious time.
“Qantas simply phoned Perth Airport in early April and advised us that it would not pay aviation fees for February and March, despite having collected this money from their passengers and the FIFO sector,” he said.
“At the same time, Qantas also advised that it was granting itself an indefinite 100 per cent waiver of all payments for the 39 leases it holds across Perth Airport, backdated to February 1. No consultation, no negotiation.
“There have been 10,155 Qantas flight movements through Perth Airport since 1 February 2020.
“Mr Joyce is correct to say Perth Airport has “more flying” than any other airport in Australia. What Mr Joyce neglects to mention is that Perth Airport is not being paid by either major airline for any of these flights.
“Despite Qantas’s behaviour, Perth Airport has written to the airline offering to consult and negotiate with them. To suggest Perth Airport has not been open to consultation is disingenuous, to say the least.”
Deputy Prime Minister Michael McCormack said both parties had approached the government but were directed to the Australian Competition and Consumer Commission.
“It is expected businesses continue to do the right thing and for the industry as a whole to work together,” he said.
A WA government spokesman said it was eager to see any disputes settled.
Perth Airport is already locked in a legal dispute with Qantas over allegations the airline was charged $27.8 million in fees between July and October 2018, but had paid only $16.5 million.
Qantas claimed the charges were too high and it had paid the airport what it considered was a fair and reasonable rate.
A directions hearing is scheduled for December 8.
Hamish Hastie is WAtoday’s business reporter.