Airport to Qantas: pay up or get out

Perth Airport has raised the stakes in its ongoing dispute with Qantas, giving the airline until Sunday to either begin negotiating an agreement on its outstanding fees or face expulsion from the airport.

That comes after Qantas chief executive Alan Joyce on Wednesday singled out Perth Airport for what he called aggressive negotiation tactics over fees owed during the COVID-19 pandemic.

Chief executive Kevin Brown has now taken steps to escalate the matter, giving Qantas a two-day deadline to come to the negotiation table to resolve the issue.

If Qantas does not meet that deadline, Mr Brown has said the airport will terminate all of the carrier’s 39 leases, with a notice period of up to 30 days.

FIFO flights would not be affected by the move.

“If Qantas does wish to engage, Perth Airport’s commercial team is ready to work quickly to resolve the issue,” Mr Brown said.

“Perth Airport has reached out to Qantas on several occasions … seeking their engagement and we remain concerned at Qantas’s reluctance to consult and negotiate.

“The Qantas Group has flown more than 10,000 flights into and out of Perth Airport since February 1 2020.

“Perth Airport has not received payment for these flights.

“This situation is neither fair nor sustainable.

“Qantas continues to operate around 350 flights a week through Perth Airport.

“Qantas demands that Perth Airport provides the full range of terminal and airfield services so that it can generate cash flow and profit from these FIFO flights.

“Qantas is profiting from these flights, accepting money from passengers and FIFO companies for the airport’s charges, but is refusing to pass this money on.

“These payments are critical to Perth Airport’s ability to continue to operate to service FIFO flights, freight services and repatriation flights.

“We think Western Australia, which is so heavily reliant on FIFO flights in this time of crisis, deserves better.”

Today’s comments come as a marked deterioration in the relationship between Perth Airport and Qantas, following years of clashes over Qantas’s relocation from its existing terminal at Perth Airport.

That dispute led in part to Perth Airport taking the airline to the Supreme Court of Western Australia in 2018, alleging it owed the airport around $20 million in unpaid fees.

That case remains ongoing, while Mr Joyce and Mr Brown have continued to dispute each other’s valuation of the terminal.

The most recent conflict between the two came about after Qantas notified the airport in April that it would be unable to pay outstanding fees between February and March, due to a grounding of flights during the COVID-19 pandemic.

Mr Brown said on Monday the airline owed the airport around $20 million in unpaid fees since the start of this year.

Two days later, Mr Joyce said publicly that Perth Airport had been uniquely difficult during negotiations, which a spokesperson for the airport subsequently disputed, arguing Qantas had refused to negotiate the matter and had dictated the terms of payment.

Mr Brown today said that although the airport had followed up with Qantas to negotiate the matter further in mid-April, the airline had returned around two weeks later and rephrased its original demands as a request for support.

He alleges the airline then attempted to link the issue of fees currently owed to the issue of Qantas’s terminal at Perth Airport.

“There is no outstanding specific debt owing for T4,” Mr Brown said.

“An independent valuer has recently been appointed to determine the fair market value of T4.

“This process, agreed to by Qantas, is expected to be finalised in late 2020 at which point Perth Airport may be required to make a payment to Qantas.”

He said the airport had attempted to contact Qantas at least three times since the start of this month to open a dialogue on the matter.

Qantas has not responded to any of those requests, Mr Brown said.

A spokesperson for Qantas has been reached for comment.

More to come.