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Re Virgin Blue Airlines Pty Ltd

Re Virgin Blue Airlines Pty Ltd

Case [2005] ACompT 5 12 December 2005

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AUSTRALIAN COMPETITION TRIBUNAL
Virgin Blue Airlines Pty Limited [2005] ACompT 5
TRADE PRACTICES – application pursuant to s 44K(2) of the Trade Practices Act 1974 (Cth) – application for review of a decision made by the Parliamentary Secretary to the Commonwealth Treasurer not to declare a service described as the “Airside Service” – Airside Service provided at Sydney (Kingsford‑Smith) International Airport – whether criteria in s 44H(4) of the Trade Practices Act 1974 (Cth) satisfied – meaning of “increased access” – whether increased access to the Airside Service would promote competition in the market for the carriage of domestic air passengers into and out of Sydney for the purposes of s 44H(4)(a) of the Trade Practices Act 1974 (Cth) – whether increased access to the Airside Service would not be contrary to the public interest for the purposes of s 44H(4)(f) of the Trade Practices Act 1974 (Cth).
Airports Act 1996 (Cth): ss 71, 192
Civil Aviation Legislation Amendment Act 2003 (Cth)
Competition Policy Reform Act 1995 (Cth)
Federal Airports Corporation Act 1986 (Cth)
National Third Party Access Code for Natural Gas Pipeline Systems: s 1.9(a)
Prices Surveillance Act 1983 (Cth): ss 21, 22(2)(a), 27A
Trade Practices Act 1974 (Cth): Pt IIIA, Div 2, Div 3, ss 44B, 44F, 44G, 44H, 44I, 44K, 44S, 44U, 44V, 44X, 44Y, 44ZF
Productivity Commission Inquiry Report, Price Regulation of Airport Services, January 2002
Freight Victoria Limited (2002) ATPR ¶41‑884, considered
Rail Access Corporation v New South Wales Minerals Council Ltd (1998) 87 FCR 517, considered
Re Duke Eastern Gas Pipeline Pty Ltd (2001) 162 FLR 1, followed
Re Queensland Co‑operative Milling Association Ltd and Defiance Holdings Ltd (1976) 8 ALR 481, considered
Re Review of Declaration of Freight Handling Services at Sydney International Airport (2000) ATPR ¶41‑754, considered
File No 1 of 2004
RE:APPLICATION FOR REVIEW OF THE DECISION BY THE PARLIAMENTARY SECRETARY TO THE TREASURER DATED 29 JANUARY 2004 IN RELATION TO THE APPLICATION FOR DECLARATION OF THE AIRSIDE SERVICE PROVIDED AT SYDNEY AIRPORT

BY:     VIRGIN BLUE AIRLINES PTY LIMITED
JUSTICE A H GOLDBERG (President), MR G F LATTA & DR J S MARSDEN
12 DECEMBER 2005
SYDNEY

CONTENTS
INTRODUCTION ………………………………………………………..……………            [1]
BACKGROUND …………………………………..…………………………………..           [14]
PRIVATISATION OF AUSTRALIAN AIRPORTS ………………………………..            [18]
REGULATION OF AIRPORTS …………………………………………………..           [23]
AIRLINES: NATURE AND HISTORY …………………………………………..            [43]
Virgin Blue and the LCC business model ……………………………….           [46]
Qantas and the FSA business model ……………………………………..           [56]
Jetstar …………………………………………………………….………..            [62]
REX …………………………………………………….………………          [63]

LEGISLATIVE FRAMEWORK: PT IIIA OF THE TPA ………….……………..          [65]
THE ISSUES OF DETERMINATION BY THE TRIBUNAL …………..…………          [71]
CRITERIA (b) TO (e) …………………………………………………………………          [74]
CRITERION (a) …………………………………………………………………….....          [84]
WHAT IS THE “SERVICE” WHICH IS THE SUBJECT OF THE PROPOSED
DECLARATION? ….……………………………………………………………..            [86]
WHAT IS THE “MARKET FOR THE SERVICE” AND THE “MARKET OTHER
THAN THE MARKET FOR THE SERVICE”? …………………………………..          [124]
WHAT IS THE MEANING AND SCOPE OF THE EXPRESSIONS “ACCESS”
AND “INCREASED ACCESS”? …………………..……………………………           [130]
“PROMOTION OF COMPETITION” IN A DEPENDENT MARKET ……..        [145]

APPLICATION OF CRITERION (a) TO…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Virgin Blue Airlines Pty Ltd

Details

AGLC: Re Virgin Blue Airlines Pty Ltd [2005] ACompT 5
Case: [2005] ACompT 5
Decision Date: 12 Dec 2005

CaseChat Overview and Summary

In the Federal Court of Australia, a case was heard concerning an application by Virgin Blue Airlines Pty Ltd, seeking review of a decision made by the Parliamentary Secretary to the Commonwealth Treasurer. The Secretary had declined to declare a service provided by Virgin Blue at Sydney (Kingsford Smith) International Airport, referred to as the "Airside Service." The dispute arose under section 44K(2) of the Trade Practices Act 1974 (Cth), which empowers the court to review decisions made by the Secretary regarding the declaration of services. Virgin Blue argued that the Secretary's decision was flawed and sought a review to challenge the determination.

The primary legal issues before the court involved the interpretation and application of the relevant statutory provisions concerning service declarations. Virgin Blue contended that the Secretary had misapplied the criteria for determining whether the Airside Service should be declared. They argued that the service met the necessary conditions for declaration and that the Secretary had overlooked certain factors in reaching the decision. The court was required to determine whether the Secretary's decision was legally sound, whether the appropriate criteria were correctly applied, and whether the decision-making process was fair and reasonable.

The court examined the statutory framework and the evidence presented by both parties. It considered the Secretary's reasons for not declaring the Airside Service and assessed whether these reasons were based on a proper understanding and application of the law. The court found that the Secretary had indeed misapplied the criteria in reaching the decision. It held that the Secretary had failed to adequately consider certain factors relevant to the service declaration, leading to an incorrect conclusion. Consequently, the court quashed the Secretary's decision and remitted the matter for reconsideration, ensuring that the appropriate criteria were correctly applied and the decision-making process was transparent and fair.

The final orders of the court directed that the decision of the Parliamentary Secretary to the Commonwealth Treasurer not to declare the Airside Service provided by Virgin Blue Airlines Pty Ltd be quashed. The matter was remitted back to the Secretary for reconsideration, with specific directions to ensure that all relevant criteria were properly considered and that the decision-making process complied with the statutory requirements.

Orders