BY ALISON DELLIT
The federal Coalition government does not let itself be deterred from carrying through a policy just because it is disastrous. Just a few weeks after aviation privatisation claimed as its victims the jobs of 14,000 Ansett workers, federal cabinet decided to go ahead with the privatisation of Sydney's main airport.
The March 11 decision comes in time for the sale of Sydney Airport Corporation Ltd to be factored into the 2002 federal budget. The sale of SACL, which controls both Kingsford Smith and Bankstown airports, is expected to raise $4-5 billion to pay off government debt.
Kingsford Smith is Australia's biggest airport. It currently handles 23 million passengers a year, and around half of all overseas air traffic into Australia. SACL owns nearly a million square metres of lettable land, and employs, directly or indirectly, 4% of Sydney's workers.
The scale of the privatisation is what has made it so eagerly anticipated by the corporate elite. Since 1996, 11 publicly owned airports have been privatised. But the sale of three of the biggest — Melbourne, Adelaide and Brisbane — raised just $3.3 billion combined.
The size of the SACL sale is also what makes it most likely to increase fares and noise levels around Sydney.
An efficient airport, you would think, is one which gets people where they want to be with a minimum of effect on the surrounding environment. A publicly owned airport could set this as its goal. But for the circling capitalist sharks, an efficient airport is one which can reap ever-increasing profits.
In practice, this means Sydney will have an airport which works out how to convince more people to travel (and pay more for it), just for the sake of it, and puts them on competing, half-empty aircraft which are as large as possible. Passengers, workers and smaller airlines will all lose big time.
SACL's mission statement, published in May 2000, says: "The most fundamental driver of profit growth is the increase in traffic... Passenger movements act as a 'throttle' which controls the business growth and yield of the retail and commercial activities of the business."
This is, in part, because the largest part of the airport's income (35%) comes from aeronautical charges — fees to aircraft and airlines for terminal, runway and taxi-route use. More passengers, and heavier aircraft, attract higher fees.
But whose interests will be served by having more passengers?
Noise cap
Kingsford Smith is the only airport in Australia that has a regulated cap on aircraft movements. No jet planes can take off between 11pm and 6am, and no more than 80 aeroplanes can take off or land per hour. The cap was put into place in 1998 after a prolonged and fierce campaign by Sydney residents against increases in aircraft noise.
Announcing the sale on March 11, the government said that the cap will remain in place. But a private airport company aiming to maximise its profit will be a powerful lobbyist for the removal, or expansion, of the cap.
Even without changes to the cap, aircraft noise will almost certainly increase, through the use of larger aircraft.
SACL has significant influence over the allocation of the "slots", which give an airline the right to fly planes in and out of Kingsford Smith. Although government regulations govern the allocation process, Airport Coordination Australia implements it. In June 2001, ACA's shareholders were Qantas, Ansett, SACL and the Regional Airlines Association of Australia. A SACL executive chairs the ACA board.
Since 2001 vacant slots have been given to the applicant using the biggest aircraft, irrespective of route or operator (with exceptions for flight "series" and quarantined regional services). This allocation system is designed to force the airlines to use bigger planes — even when current passenger numbers mean the flights are half full. Even the regional slots are given to the users of the biggest aircraft.
The "logic" behind this decision is that SACL can indirectly force the airlines to find ways to increase the number of people on the flights, making the service more profitable. This is particularly true for international flights, where Airbus A380s having 550 seats will be prioritised over Boeing 777s which carry 398 passengers.
Larger planes, unsurprisingly, make more noise. In fact, according to a 1999 US Senate report into aircraft noise, increases in the standard size of aircraft have mostly cancelled out the advances in sound-proofing technology made in the last decade.
As smaller aircraft get increasingly squeezed out, regional commuters have become increasingly panicky. Regional services currently control a large number of valuable slots. If they are not used, however, they can be re-allocated by ACA to bigger aircraft.
After the collapse of Ansett, and the ceasing of many NSW services, the government agreed to an emergency 18-month quarantine for these slots. When this is up, it is likely that towns such as Inverell will lose all access to Kingsford Smith.
Increased prices
A profit-driven airport is also likely to result in higher prices for aircraft tickets. In August, Australian Competition and Consumer Commission chairperson Allan Fels told a press conference that the full sale of Sydney airport could result in the deregulation of aeronautical fees, a longstanding demand of the Productivity Commission. The current price cap arrangements, policed by the ACCC, expire later this year.
In February 2001, SACL attempted to raise these fees by a whopping 150%. The ACCC overturned the charge increase, but, after intervention from the Coalition government, allowed a 97% increase. At the time, Fels predicted that increasing charges could force financially vulnerable airlines to the wall, resulting in higher ticket prices.
Privatisation of the airport will make things harder for small operators. Aside from fee increases, larger airlines can "shepherd" slots, occupying them just to prevent competitors from gaining access, if SACL plays along. By "buying up" slots, even by flying loss-making routes, airlines unable to launch the huge aircraft necessary to get slots could be forced out of the market altogether.
Of course, SACL knows that it can profit from the collapse of some operators. The demise of Ansett has "liberated" dozens of terminals which can now be sold off individually to the highest bidder. It can also auction off Ansett's slots for use by bigger aircraft.
The workers at the airports are also likely to suffer. While the Transport Workers Union won agreement from the government in April 2001 that all direct SACL employees' jobs would be protected for three years after privatisation, conditions and pay could be eroded. Since the privatisation of Qantas, average pay and conditions in the airline industry have fallen.
Aviation is a dangerous industry — both because of its impact on the surrounding environment and because of the potential for injury to passengers and staff. Flying is not always the most efficient method of transport.
A sanely run society would balance a transport system with fast rail links to regional centres and international air travel directed where it has least impact and combined with such a rail link. This means taking the industry out of the control of a profit-driven "growth at all costs" market, and back into the control of a public authority, which makes air transport serve the interests of workers and consumers.
From Green Left Weekly, April 10, 2002.
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