The purchase of Ansett's terminals by Melbourne and Sydney airports is set to improve the potential for airline competition in Australia.
Both Virgin Blue and Qantas sought to buy Ansett's leasehold interest in these terminals, but, ultimately, it was the airports themselves that bought out the failed airline's leases and made the terminals at these key hubs available for common use by any carrier.
Qantas withdrew from the bidding two days before the sale deadline in Sydney. It is widely reported the Australian Competition and Consumer Commission told Qantas not to bid on competition grounds.
Virgin Blue, for its part, has not been an enthusiastic bidder. It has outgrown its purpose-built Sydney terminal, and knows it needs some of Ansett's space, but it was reluctant to pay as much as Ansett's administrators wanted.
In the end, Sydney airport out-manoeuvred the administrators by threatening to forfeit Ansett's lease if it went into receivership, and then successfully resisted attempts to delay that receivership. The administrators disputed the airport's reading of the lease and threatened to sue, but with time running out and Virgin Blue balking on the price, they had little option but to strike a deal.
They sold Ansett's lease of the Sydney terminal for A$192 million ($105million), around A$50 million less than they had hoped. They were able to get that much because Sydney airport is due to be privatised later this year, and ownership of the Ansett terminal could enhance its sale value.
The purchase of Ansett's leases removes a major barrier to entry for newcomers at two of Australia's three biggest hubs. In the past, incumbent carriers controlled these terminals via long-term leases, effectively locking out potential start-ups. No new airlines have announced plans, but giving access to these terminals removes a major barrier to that possibility.
Source: Airline Business
