sydney airport

The Australian Competition and Consumer Commission (ACCC) has not opposed Sydney Aviation Alliance’s move to acquire Sydney Airport.

Sydney Aviation Alliance is a consortium of investment funds which each have investments in a range of infrastructure assets, including shareholdings in other Australian airports.

ACCC Chair, Rod Sims, said, “Throughout our investigation, we heard that there is very little, if any, competition between Australian airports.

“This is no surprise, as we’ve been saying for a long time that Australian airports such as Sydney Airport are natural monopolies, with significant market power and no price regulation.

“The proposed acquisition is therefore unlikely to substantially lessen competition in a market that already has such little competition.”

The ACCC accepts that there is some minimal potential for competition between airports in relation to some aeronautical services, for example when an international airline seeks to enter the Australian market or when airports are located close to one another.

However, it stated that taking into account the minimal level of this potential competition, any lessening of competition from the proposed acquisition would not be substantial.

During its review process, the ACCC consulted with interested stakeholders including airlines, retailer groups, service providers and industry bodies. 

Some stakeholders raised concerns that the proposed acquisition may add to the flow of information between airports with common ownership, which could give airports more bargaining power against airlines and other users of airports.

“We understand the stakeholder concerns, however, fundamentally the lack of competition between airports means that any such sharing of information between airports would not amount to a substantial lessening of competition, which is what the law requires before we can oppose a merger,” Mr Sims said.

Market participants also told the ACCC that the current monitoring regime is not effective in constraining Sydney Airport from charging excessive prices.

“The ACCC maintains the view that the threat of regulation under the current limited monitoring regime does not constrain the pricing behaviour of our airports,” Mr Sims said.

“The absence of constraint ultimately leads to consumers paying higher airport passenger charges than they otherwise would.

“We will continue to advocate for a regulatory regime that is effective, particularly as the aviation industry and the Australian economy recover from the COVID-19 pandemic,” Mr Sims said.

Further information is available at Sydney Aviation Alliance – Sydney Airport.

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