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Tuesday, 21 December 1993
Page: 5556

(Question No. 785)

Senator Bell asked the Minister for Transport and Communications, upon notice, on 18 November 1993:

  (1) Did the Federal Airports Corporation (FAC) tell off-airport car rental operators that if they had not signed a contract to pick up pre-booked clients by 15 November 1993 they would have their authority to trade on the airport revoked.

  (2) In a recent report, did the Prices Surveillance Authority (PSA) state that off-airport rental car operators who meet pre-booked customers at airports do not conduct business at airports; if so, then on what grounds do off-airport car rental operators need an authority to trade to pick up pre-booked clients at airport terminals.

  (3) What is the difference between car rental operators meeting pre-booked clients and accommodation providers meeting pre-booked guests, or tour operators meeting pre-booked clients.

  (4) Who has determined that the Alternative A contract as proposed by the FAC will be implemented: the PSA, the Trade Practices Commission or the FAC itself.

  (5) Is it a fact, as suggested by the PSA, that `any charge levied for airport access simply reflects the FAC's market power'.

Senator Collins —The answer to the honourable senator's question, based on information provided by the Federal Airports Corporation (FAC), is as follows:

  (1) Off-airport car rental operators were granted an authority to trade on the airport to 31 October 1993. They were advised that if they wished to trade on the airport after that date they would need to apply for and be granted an authority to trade in accordance with the Federal Airports Corporation National Car Rental Policy of April 1993.

  An advertisement was placed in the "Hobart Mercury" on 30 October 1993, advising car rental operators that if they wished to operate from Hobart or Launceston Airports, they "must enter into an agreement with the Corporation no later than 15 November 1993. From that date any operator without such an agreement will not be allowed to trade on these airports".

  (2) The Prices Surveillance Authority (PSA) in its report on the `Inquiry into the Aeronautical and Non-Aeronautical Charges of the Federal Airports Corporation' stated under the heading `Off-Airport Car Rentals': "Contracts for renting motor vehicles are not negotiated at airports; that is, no business is conducted at the airports".

  While it may be questioned whether car rental operators are conducting business on airports, without doubt a service is being provided. Federal Airports By-Laws provide that for any person or organisation to sell or supply any goods or services, to carry on or to solicit for any business at a Federal Airport, a lease, licence or authority must first be granted under the Federal Airports Corporation Act.

  (3) Car rental operators on airports cater for both `walk-up' and `pre-booked' clients. In the development of the Corporation's National Car Rental Policy, which involved extensive consultation with the whole of the car rental industry, these two distinct activities became inseparable.

  In respect of accommodation and tour operators, i.e. hotel courtesy buses and coach operators, the Corporation accepts that there is little difference between them and car rental operators meeting pre-booked clients on the airports. Accordingly the Corporation has commenced a Ground Transportation Study that will review the operation of all landside transportation including the provision of infrastructure and the appropriateness of charging these other operators fees for their use of the airports.

  The car rental industry was advised of this study in May 1993 and that it may be some time before the review is completed "given the enormity of the task".

  For historical reasons most other operators are not charged fees, however this does not accord with the practice in many overseas countries. A limited number of these other operators have been issued with authorities to trade at Federal Airports Corporation airports, however at this stage only a small number are being asked to pay a fee.

  (4) The FAC, following further consultation with the Trade Practices Commission.

  (5) The Prices Surveillance Authority stated `it may be that these fees simply reflect use of the FAC's market power in the ownership and provision of airports'. The Federal Airports Corporation disagrees with this statement.