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ACCC welcomes long-term pricing proposal for aviation services.



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Attn: Aviation writers

ACCC welcomes long-term pricing proposal for aviation services The Australian Competition and Consumer Commission has welcomed Airservices Australia's decision to adopt a long-term, five year approach to pricing arrangements for its air navigation and fire•fighting services. In a draft decision the ACCC has agreed to proposed changes in terminal navigation and en route charges but will not accept Airservices’ proposals for fire•fighting services.

ACCC Chairman, Mr Graeme Samuel, said this is the first time Airservices has proposed a long-term pricing arrangement and the ACCC welcomed the new approach.

"The ACCC believes a longer-term approach to pricing will provide real benefits to the industry", he said. "These benefits include increased certainty about Airservices' future pricing of its services as well as providing the opportunity for a better sharing of risks between Airservices and its stakeholders.

"Airservices is also to be commended for the consultative approach it has taken to developing its pricing arrangements and particularly the increased transparency in relation to its costs and operations".

While the ACCC welcomed the new approach and overall is supportive of Airservices' methodology, it is concerned about the way in which Airservices' proposed charges will impact on users of airports that have fire •fighting services.

"The ACCC believes the basis Airservices has adopted for charging for its fire•fighting service services is not likely to lead to efficient or equitable outcomes".

The ACCC has advised Airservices to address the charging structure for fire•fighting services and is calling for comment from interested parties on the appropriate basis for imposing fire•fighting charges.

Interested parties have until 29 November 2004 to make submissions addressing this and any other issues concerning the preliminary decision. A copy of the ACCC's preliminary decision will be available on the ACCC's website (see below).

Media inquiries

● Dr Stephen King, Commissioner, (02) 6243 1178

● Ms Lin Enright, Director, Public Relations, (02) 6243 1108, (0414) 613

520

General inquiries

● Infocentre 1300-302-502

Release # MR 244/04 Issued: 5th November 2004

Links

● ACCC preliminary view—Airservices Australia draft price notification

2004-05 - http://www.accc.gov.au/content/index.phtml/itemId/546989

Background Airservices Australia is the monopoly provider of en-route air navigation, terminal navigation and aviation rescue and fire-fighting services in Australia. These services are declared under Part VIIA of the Trade Practices Act 1974, which means that Airservices must notify the ACCC when it wishes to increases prices. The ACCC may object or not object to the proposed increases.

On 19 August 2004, the ACCC received a draft five-year pricing proposal from Airservices. This pricing proposal contained recommendations for increases in the prices of terminal navigation and aviation rescue and fire fighting services, and decreases in the prices charged for en route

navigation services.