Airports (Ownership — Interests in Shares) Amendment Regulations 2001 (No. 2)

Administered by Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts

Legislation au F2001B00584 Regulations Not in force Legislative Instrument

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Airports (Ownership - Interests in Shares) Amendment Regulations 2001 (No. 2) 2001 No. 347

EXPLANATORY STATEMENT

STATUTORY RULES 2001 No. 347

Issued by the Authority of the Minister for Transport and Regional Services

Airports Act 1996

Airports (Ownership - Interests in Shares) Amendment Regulations 2001 (No. 2)

Section 252 of the Airports Act 1996 (the Act) provides that the Governor-General may make regulations prescribing matters that are required or permitted by the Act to be prescribed or that are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The Act imposes limitations on the ownership of leased Federal airports by airlines and foreign persons, and on the cross-ownership of certain airports. The ownership rules of the Act are set out in Part 3 of the Act and the Schedule to the Act.

One of the objects of the Act is to limit the ownership of airports by airlines. Section 44 of the Act limits any airline to a 5% "stake" in an airport. A "stake" is defined as the aggregate of the direct control interests the airline has and the direct control interests "associates" of the airline have in the airport operator company. The definition of "associate" is deliberately broad and includes anyone who holds 15% or more of the airline. However, Paragraph 9(1)(c) of the Schedule to the Act provides that, for the purposes of the ownership provisions, an interest of a prescribed kind in a share, being an interest held by such persons as are prescribed, can be disregarded.

The Regulations increase the scope for investment in general aviation airports by permitting airlines or associates of airlines to take a greater than 5% stake in an airport operator company for any leased Federal general aviation airport (Essendon, Moorabbin, Archerfield, Jandakot and Parafield). The Regulations provide that an interest in a share that results in an airline having a stake in a general aviation airport listed above will be disregarded for the airline-ownership provisions of the Act

The Regulations are also part of the Government's response to the final proposal that the Tesna consortium put to the Government in support of its bid for Ansett Australia. Linfox, one of the jointventure partners in the Tesna consortium, is also the joint owner of the company that leases Essendon Airport. The Government announced on 27 November 2001 that it would exempt all of the general aviation airports, including Essendon, from the airline ownership provisions of the Airports Act.

The airline ownership provisions of the Act were designed to prevent actual or perceived anti-competitive behaviour or collusions between airports and airlines. This is particularly important at Sydney Airport for example where, due to physical constraints associated with the limited size of the site, options for future facilities development may conceivably have differential impacts on individual airline users. A lesser but similar case applies at other major airports where regular public transport services form the greater part of the aviation-related business of the airport. However, there is no convincing rationale for continuing to apply the airline-ownership provisions to the general aviation airports which don't operate the same scope of aviation-related services. The risk of anti-competitive behaviour by major airlines at any of the general aviation airports is very low.

Following the making of the Regulations the Government will write to operators of general aviation airports to clarify its policy intent behind the regulation amendment. This letter will make clear to the operators of the above airports that if the nature of their aviation-related business changes to include operations which, in the Government's view, are of a nature that encourages the regular public transport services more akin to the major airports, then it will not hesitate to reapply the airline ownership restrictions to the effected airport.

Further details of the amendments appear in the Attachment.

The Regulations commenced on notification in the Gazette.

ATTACHMENT

Airports (Ownership - Interests in Shares) Amendment Regulations 2001 (No. 2)

Item 1 - Name of Regulations

Proposed item 1 provides for the name of the proposed regulations.

Item 2 - Commencement

Proposed item 2 provides that the proposed regulations will commence on gazettal.

Item 3 - Amendment of Airports (Ownership - Interests in Shares) Regulations

Proposed item 3 provides that Schedule 1 of the proposed regulations amends the

Airports (Ownership - Interests in Shares) Regulations.

Proposed Schedule 1 - Amendments

Item [1] Insert after regulation 10 proposed regulation, 10AA (Airlines holding stakes in certain, airport-operator companies):

Proposed Item [1] provides that, for paragraph 9(1)(c) of the Schedule to the Act, a person's interest in a share is prescribed if the result of the person's holding the interest is that an airline has a stake in the airport-operator company for Essendon, Archerfield, Moorabbin, Parafield or Jandakot Airport. Proposed Item [1] also prescribes the holder of the interest.

 

Overview

The Airports (Ownership - Interests in Shares) Amendment Regulations 2001 (No. 2) were enacted to address a gap in the Airports Act 1996 concerning the ownership of leased Federal general aviation airports by airlines and their associates. The Airports Act 1996 aims to limit the ownership of airports by airlines, particularly to prevent anti-competitive behaviour or collusions between airports and airlines, and was enacted by the Australian Parliament. The Regulations, issued by the Minister for Transport and Regional Services, allow airlines or their associates to take a greater than 5% stake in the operator companies of certain general aviation airports, including Essendon, Moorabbin, Archerfield, Jandakot, and Parafield. The objective of these Regulations is to respond to the Tesna consortium's proposal for Ansett Australia, and to clarify the Government's policy intent regarding the application of airline ownership provisions to general aviation airports. The Regulations were designed to lower the risk of anti-competitive behaviour at general aviation airports, where the risk is deemed to be very low, while maintaining restrictions at major airports where the risk is higher.

Scope and Application

The Airports (Ownership - Interests in Shares) Amendment Regulations 2001 (No. 2) amends the Airports (Ownership - Interests in Shares) Regulations to expand the scope for investment in general aviation airports by airlines or their associates. Specifically, these Regulations permit airlines or their associates to take a greater than 5% stake in the airport operator company for certain leased Federal general aviation airports, including Essendon, Moorabbin, Archerfield, Jandakot, and Parafield. This amendment is grounded in the Airports Act 1996, which aims to limit the ownership of airports by airlines to prevent anti-competitive behaviour or collusions, particularly at major airports like Sydney. However, the Act's restrictions are deemed unnecessary for general aviation airports, where the risk of such issues is minimal. The Regulations also address the Tesna consortium's bid for Ansett Australia, as Linfox, a consortium partner, co-owns the company that leases Essendon Airport. The Government clarified its policy intent through a letter to the operators of the affected airports, stating that if these airports' operations evolve to resemble major airports, the ownership restrictions may be reapplied.

Key Provisions

The Airports (Ownership - Interests in Shares) Amendment Regulations 2001 (No. 2) (the Regulations) amend the Airports (Ownership - Interests in Shares) Regulations to increase the flexibility of investment in certain leased Federal general aviation airports. These airports include Essendon, Moorabbin, Archerfield, Jandakot and Parafield. The Regulations, under section 252 of the Airports Act 1996 (the Act), allow airlines or their associates to hold a stake greater than the 5% limit specified in section 44 of the Act for these general aviation airports. Regulation 10AA, inserted into the Schedule of the Act, specifically exempts the interest in shares held by airlines or their associates in the operator companies of these five airports from the 5% stake limitation (Regulation 10AA). The Regulations impose specific obligations on airlines and their associates regarding their investments in the operator companies of the five affected airports. The key obligation is that they must not hold a stake in the airport operator company that exceeds the permitted limits unless they fall under the exemptions provided by the Regulations. The Regulations also require airlines and their associates to notify the government if their share interest results in a stake exceeding 5% in the operator company of any of the affected airports. This notification must be made within a specified timeframe, as detailed in the Regulations. Violations of the provisions of the Act and the Regulations can lead to various consequences. Under the Act, a person who contravenes the ownership provisions is subject to civil penalties. Specifically, section 267 of the Act provides that a person who contravenes a provision of the Act is liable to a penalty of up to 10,000 penalty units, which currently equates to AUD 1.1 million. The Act also allows for criminal penalties, where a person who is found guilty of a criminal offence under the Act is liable to a fine of up to 50,000 penalty units, or imprisonment for up to five years, or both. The Regulations themselves do not stipulate specific penalties for breaches but reinforce the penalties outlined in the Act. Therefore, any breach of the Regulations can lead to the same penalties as breaches of the Act. In summary, the Regulations amend the Airports Act 1996 to allow airlines or their associates to hold a greater than 5% stake in the operator companies of Essendon, Moorabbin, Archerfield, Jandakot, and Parafield airports. These entities must adhere to specific obligations, including notifying the government of any stakes exceeding 5%. Breaches of the Act and Regulations can lead to civil penalties of up to 10,000 penalty units and/or criminal penalties of up to 50,000 penalty units, imprisonment for up to five years, or both.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.