Qantas boss urges airports to reduce fees

Qantas domestic chief executive Andrew David has told a parliamentary inquiry into regional airfares in Perth it was time for country airports to come to the party and reduce fees.

Mr David told the Economics and Industry Standing Committee the flagship carrier recently announced discounted fares for residents on six of eight of its regional WA markets.

The12-month trial for residents in Broome, Kalgoorlie, Karratha, Paraburdoo, Port Hedland and Newman, offers discounts of up to 30 per cent off the Qantas controlled component of fares.

He described it as a positive initiative to make air services more accessible to residents.

“We chose these markets due to the high density of resource-related traffic, and the subsequent impact on residents,” Mr David said.

He commended Kalgoorlie for partnering with the airline by waiving their airport charges for local residents flying to Perth on Qantas, saying the partnership was a “critical component” of the scheme that would see Kalgoorlie-Boulder residents receiving larger savings on airfares.”

“We strongly encourage the other airports to join this initiative,” he said.

“Airport costs here are high. It is true they only represent a small percentage of the total fare, but airlines globally only make an average of $7 per passenger and therefore, charging over $30 for passengers to land and take-off has a dramatic effect on an airline’s ability to operate the route.”

Mr David said that based on a per passenger charge calculation, the regional airports were all in the top 15 most expensive airports in the group’s domestic network.

“Another factor of the high cost is directionality,” he said.

“In WA regional towns where demand is underpinned by FIFO traffic, the demand is unidirectional.

“So effectively, Qantas operates full planes in one direction and relatively empty planes back. This is extremely challenging for airline economics and manifests itself in the cost of airfares.”

Mr David said reinvigorating tourism in regional WA, creating higher population centres and lowering airport charges were key to lower fares for residents.