Airservices is Australia's air navigation service provider - we provide air traffic control, aviation rescue and fire fighting and air navigation services.

2010 Pricing Proposal

Airservices Australia has developed a new Long Term Pricing Proposal for industry consultation. The new pricing arrangements are proposed to commence on 1 July 2011 for each service lines of Enroute, Terminal Navigation (TN) and Aviation Rescue and Fire Fighting (ARFF).

The proposal aims to provide price certainty over five years to customers and Airservices in order to facilitate a clear outlook for investment decisions and efficient service delivery.

In essence, prices will increase by a nominal increase of 7.3% over the five year period to 2016. This is less than projected CPI increases over the period (3-4% p.a. band) and equivalent to a real price reduction of 6% over the period. It follows a two year price freeze implemented after the expiration of the previous Long Term Pricing Agreement in December 2009.

The proposal responds to stakeholder feedback received during a range of consultation processes conducted over the last two years including the 2010 Terminal Navigation Services Pricing Review undertaken in accordance with the Government’s National Aviation Policy White Paper.

The five year pricing proposal was developed applying the Australian Competition and Consumer Commission’s (ACCC) building block model.

The proposal includes risk sharing across the three pricing elements – flight activity, capital expenditure and regulatory change. Risk sharing principles have been adopted in order to reduce excessive over or under cost recovery and make provision for additional costs associated with regulatory changes required by CASA (Civil Aviation Safety Authority and needed capital investment. The forecast need in some locations for new aviation rescue and fire fighting and air traffic control services is incorporated in the pricing structure.

The proposed prices in each year for each service and location are set out in the proposal.

Industry Responses to the Pricing Proposal

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