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- The ACCC will not challenge the proposed $23.6 billion takeover of Sydney Airport (SYD) by Sydney Aviation Alliance
- “Throughout our investigation, we heard that there is very little, if any, competition between Australian airports,” ACCC Chair Rod Sims says
- The ACCC called airports a ‘natural monopoly’ with significant market power and no price regulation
- The European Commission has also authorised the planned acquisition under the EU Merger Regulation, according to Sydney Airport
- Some stakeholders expressed worry to the ACCC that the proposed acquisition will increase the flow of information across airports with similar ownership
The ACCC will not challenge the proposed $23.6 billion takeover of Sydney Airport (SYD) by Sydney Aviation Alliance.
The Sydney Aviation Alliance is a group of investment funds with holdings in a variety of infrastructure assets, including stakes in other Australian airports.
“Throughout our investigation, we heard that there is very little, if any, competition between Australian airports,” ACCC Chair Rod Sims said.
“This is no surprise, as we’ve been saying for a long time that Australian airports such as Sydney Airport are natural monopolies, with significant market power and no price regulation.”
“The proposed acquisition is therefore unlikely to substantially lessen competition in a market that already has such little competition.”
The ACCC acknowledged that there was some minimal possibility for competition between airports in regard to particular aeronautical services when a foreign airline attempted to join the Australian market or when airports were adjacent to one another.
However, given the low degree of prospective rivalry, any reduction in competition resulting from the proposed purchase would be minor, according to the ACCC.
Interested parties such as airlines, retailer groupings, service providers, and industry associations were consulted during the ACCC’s assessment process.
Sydney Aviation Alliance agreed to purchase Sydney Airport for $23.6 billion in early November.
Some stakeholders expressed worry that the proposed acquisition would increase the flow of information across airports with similar ownership, giving airports more negotiating leverage over airlines and other airport users.
“We understand the stakeholder concerns. However, fundamentally, the lack of competition between airports means that any such sharing of information between airports would not amount to a substantial lessening of competition, which is what the law requires before we can oppose a merger,” Mr Sims said.
Market players also told the ACCC that the present monitoring system is ineffective in preventing Sydney Airport from collecting exorbitant fees.
The European Commission has also authorised the planned acquisition under the EU Merger Regulation, according to Sydney Airport.
Shares in Sydney Airport were up 2.87 per cent to $9.59 at 11:54 am AEDT.
