Qantas, the Australian flag carrier, seems to have forgotten to pay a bill. Specifically, a bill of $11.3 million dollars.
Perth Airport Corporation, the main airport for the only major city on the Australian west coast (known for its very rich mining industry) is suing Qantas for the missing millions.
Perth Airport is also well known for it’s Qantas Perth to London route, the only route to fly direct between Australia and Europe.
What is the story?
Perth Airport sees around 13.7 million passengers a year, 34.8% of which are delivered via Qantas (or their subsidiary Jetstar). The airport, to help with its financing, operations and expansion, has been offering new terms of agreement to airlines. Essentially, these are set fees for landing and services charged to an airline (and can sometimes change the cost of your ticket).
The airport managed to get every other airline that has routes to them to sign up to the new agreement, apart from Qantas, despite negotiating heavily. The new agreement kicked in on July 1st 2018 and the Airport decided to start charging the new, lower, rate.
In rebuttal, Qantas decided to not pay the old rate or the new rate, but rather what they thought the airport deserved. This new payment was around 60% of what the airport expected.
“More than 18 months it has been offering a new Aeronautical services agreement to Qantas which would have delivered the airline a significant reduction. Despite the reduced price offered, Qantas unilaterally decide to a short-pay these invoices by around 40 percent.” – Perth Airport
The airport has charged the airline approximately $27.8 million for services between Jul. 1 to Oct. 31, but the airline has only paid approximately $16.5 million. The airport is longing for the outstanding amount of $11.3 million.
Why is Qantas refusing to pay?
The funny thing is, the new agreement would have reduced Qantas’ fees rather significantly. But apparently, it was not enough.
“The Perth Airport was one of the most expensive domestic airports Qantas flies into. We are willing to pay fair and reasonable charges but want to ensure that our customers are not paying more in airport charges than is absolutely necessary.” – Qantas Chief Executive Andrew David
The airport was quick to point out that they had been more than flexible to Qantas. Allowing them to operate an international route to Singapore and London from their domestic terminal 4, rather than the international terminal for all the other airlines.
“It could have potential implications for Perth Airport’s ability to provide services and build additional capacity in the future to meet the needs of its airline partners and the traveling public.” – Perth Airport
If Perth airport loses this revenue, they might have to cancel their planned third runway.
Perth Airport will see how the court case plays out, but they could potentially bar Qantas (and Jetstar) from landing at their airport. This would be a significant blow to the carrier and a massive boon to rival Virgin Australia (Who has been planning routes to Europe from Perth on their own)
Qantas is also refusing to pay for Alice Springs Airport (in the outback) and Darwin Airport.
What do you think? Is this fair?