Perth Airport claims Qantas still owes millions despite 223m back-payment

Perth Airport claims Qantas conceded it underpaid the company for its runway services but still owes millions of dollars.

Victorian silk Neil Young QC, representing Perth Airport, told the Supreme Court of WA on Monday the organisation was owed $39 million for aeronautical services over a six-month period in 2018 from July to December, but had only received $22.89 million from the airline.

Qantas and Perth Airport have been in a dispute for three years around service payments.Credit:Qantas

July 2018 was an inflection point in the relationship between the airport and Qantas, with the carrier not signing on to a new seven-year service agreement to use the Perth facilities.

Mr Young said Qantas did not pay the requested fee level for the airport’s services and had instead continued to provide payments which were significantly less, based on the airline’s own calculations rather than an agreed position between the two parties.

He said there was still no agreement in place between the two entities which meant Qantas had continued to make low payments despite continuing to use the airport’s services.

“As at August 31, 2021, there is a very substantial gap between what Qantas airlines had paid Perth and the amount [the airport] contends should have been paid,” Mr Young said.

“Qantas has continued to land planes at Perth Airport, carry freight, and to use the airport’s facilities and services without any agreement. Indeed, without any ongoing licence or right to operate terminal 3 and 4.

“Qantas have continued to refuse to pay a fair value for services and facilities since December 17, 2018. They have done so on the footing they do not need to make any commitments, whether short or long term. It’s done on the basis they will simply tender an amount of money they consider is sufficient.”

Mr Young revealed on the first day of the trial that earlier this month Qantas had paid Perth Airport an additional $2.23 million for aeronautical services from July to December 2018.

He told the court the extra payment was made without any admissions but claimed it was made on the basis Qantas had accepted previous payments had been below a fair price.

“They’ve made that tender of payment without addressing the fact that they have held out from paying Perth Airport an amount of money that was due and payable progressively during that six-month period at the end of 2018,” Mr Young said.

“They’ve not offered any payment by way of interest or a further restitutionary sum reflecting the fact Qantas airlines has unjustly withheld for nearly three years money they should have paid to Perth Airport.”

Perth Airport is seeking further restitution with the question for the court simply being “how much should the carrier pay?“.

Mr Young said the best evidence available to the court to determine what would be a fair value of the services provided could be found in the agreements struck between the airport and other commercial airlines in the second half of 2018.

Qantas was the only major carrier not to sign up on a new agreement, according to Mr Young.

The Perth Airport lawyer said the airport required long-term agreements to be able to reduce risk and properly plan for infrastructure investments and meets its operational responsibilities.

Justice Rene Le Miere asked Mr Young, based on a Qantas submission, if Perth Airport could have excluded the airline if it had issued an invoice which was not paid within three months.

Mr Young said Perth Airport believed it would be in breach of its lease obligation to take such a step and stopping flights would not be a responsible action for a public utility with its responsibilities under state and federal legislation.

The opening statement from Mr Young will finish on Tuesday, with John Sheahan QC to follow with the defence for Qantas. The trial has been listed for 25 days.

Perth Airport is majority owned by infrastructure fund Utilities Trust of Australia (55.6 per cent) with smaller shareholders including the Future Fund (30 per cent), the Infrastructure Fund (7.2 per cent), Australian Super (5.25 per cent), and Sunsuper (1.95 per cent).

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