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New Deal and New Lounge as Virgin Blue and SACL Sign "Sensible" New Commercial Agreement

23/05/2007

After four and a half years of commercial conflict, Virgin Blue and Sydney Airport Corporation have reached an amicable agreement regarding domestic runway landing and take off charges at Sydney Airport.

 

Virgin Blue Chief Executive, Brett Godfrey welcomed the resolution as a landmark outcome.

 

Brett Godfrey said, “We regret that after a history of frustration, we believed we had no alternative but to pursue the declaration of Sydney Airport under the Trade Practices Act. We did that and gained the right to refer to the ACCC as an independent arbitrator to resolve our dispute.

“We do express our gratitude to Russell Balding, Chief Executive (SACL) and his team we have resolved our ongoing issues to the mutual satisfaction of both parties.”

 

“This is a win-win result for Virgin Blue and SACL and is as it should be. We believe this is the first time since 2003 and the removal of price capping at major airports by the Productivity Commission that an airline/airport dispute has been resolved constructively to the mutual satisfaction of both parties.”

 

He continued, “We hope that legislators and those with a vested interest in airport/airline relations take particular note of this outcome. It is a significant development not just for Virgin Blue and our industry, but for any industry where monopoly service providers exist.”

 

“We simply sought an independent view of a unilaterally imposed pricing regime which was applied to and impacted our business without the right to a normal negotiation process. Airports have the ability to dictate pricing terms and conditions upon airlines and many have.

 

“SACL’s change to aircraft landing and take off charges from calculation on aircraft maximum take-off weight (MTOW) to calculation on per passenger basis, severely disadvantaged our business increasing our landing fees by approximately 53 percent. We are pleased Sydney Airport has now agreed terms to return to MTOW and to agreeable pricing.”

 

“We are confident that similar constructive arrangements are possible with other airports around the country. Our underlying motive has always been to protect our business and to provide the best value air travel and the best possible service to Virgin Blue Guests.”

 

As part of the new agreement with SACL, Virgin Blue will move its “The Lounge” facility from its existing location to the former Ansett Golden Wing Lounge within the Sydney Airport T2 terminal later next year. The new space, five times larger than Virgin Blue’s existing lounge, will offer Virgin Blue Guests a more spacious and expanded facility and supports the airline’s increasing share of the corporate traveler market.

 

Virgin Blue today has withdrawn its notification of a dispute to the Australian Competition and Consumer Commission under Part lllA of the Trade Practices Act.