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North West “inequitable” airfares inquiry

North West “inequitable” airfares inquiry

Joseph Dunstan, ABC North West WA on Friday 26 August, 2016 3:08pm

Local councils in Western Australia’s north are calling for a State Government investigation into the factors driving high airfares for customers in the North West.

 

Tony Friday, CEO of the Pilbara Regional Council, said a year-long analysis of flight prices in the North West had revealed a disparity compared to other, similar trips in Australia.

“There’s no doubt that costs from the Pilbara to Perth are much higher than comparable flights from other major cities, and we believe this is a distorting effect from fly-in, fly-out workforces, where companies are willing to pay higher premiums for regular flights,” Mr Friday said.

“We’re calling for a market access inquiry from the State Government to really consider how inequitable air access is in the Pilbara, given the distortion from FIFO workforces.”

Nationals Leader and Pilbara MP Brendon Grylls said people have come to him expressing frustration over high flight costs following Qantas’s billion-dollar profit this week.

“Certainly in the last couple of days people have said to me that Alan Joyce seems to be taking the profit directly out of my pocket.

“Obviously the Federal Government has most of the regulatory powers over Qantas, so they have a bigger stick to talk to the airlines.

“That being said … if the Federal Government aren’t going to do anything, it does fall on the State Government to wade into that area.”

Incentives which enable large mining companies to claim flights for employees as a tax deduction is a key area the councils want investigated.

“There’s a number of things that need revision, but certainly the tax incentives that allow resource companies to claim the cost of travel as a business cost rather than paying the fringe benefits tax on top of the provision of that travel for their staff,” Mr Friday said.

“If I’m a resource company worker, I can travel 2,500 kilometres to work; my company will pay the cost of that travel, and it’s counted as a cost of doing business, so it comes off the profits that they eventually pay tax on.”

Proposed inquiry not ‘airline-bashing’

Karratha mother Renae Foster said the high flight costs deterred friends and family from visiting the region and contributing to the local economy.

“Not everyone up here earns a lot of money, and there are family that want to travel from over east…quite often [my sister] suggests we meet in Bali or overseas somewhere because it’s cheaper for her.”

Other families living in the North West told the ABC they were forgoing Christmas reunions or visiting their children studying at university in Perth due to the cost of flights at the times they could get annual leave.

In a statement, Qantas defended its ticket prices, stating that it ran sales for tickets at least once a month in regional WA.

“Making healthy and sustainable profits ensures we can continue to invest in the customer experience, including our newly built lounge at Karratha airport,” a Qantas spokesperson said.

Mr Friday said the ultimate aim of the inquiry was to identify and correct tax incentives, not lecture airlines for running a business.

“Our position isn’t about bashing the airlines, the airlines are doing exactly as they’re required to do under the Corporations Act, and that is maximising the terms for their shareholders.”

Mr Friday said he hoped to get support for an inquiry from all parties contesting the next state election in March, given the economic significance of the Pilbara region.

Picture: Karratha Airport – local councils say their proposed inquiry is not ‘airline-bashing’. (ABC Rural: Lucie Bell)

View the original article here: http://www.abc.net.au/news/2016-08-26/pilbara-councils-call-for-airfare-inquiry/7789812