THE competition watchdog has upheld a decision not to allow five car rental companies the ability to collectively bargain with Westralia Airport Corporation over licence renewal terms at Perth Airport.
THE competition watchdog has upheld a decision not to allow five car rental companies the ability to collectively bargain with Westralia Airport Corporation over licence renewal terms at Perth Airport.
In March this year, WAC requested competitive tenders for terminal desk sites and parking bays in a licence renewal for Perth Airport.
In May, the five established car rental providers – Hertz, Thrifty, Avis, Budget and Europcar – lodged a notification with the Australian Competition and Consumer Commission (ACCC) so that they could collectively bargain with the airport.
The ACCC said it had received submissions from national car rental service Redspot and Westralia Airport Corporation opposing the proposed collective bargaining agreement.
It concluded that the proposed arrangements may reduce competitive tensions between the car rental companies by facilitating sharing commercially sensitive information between group members, acting ACCC chairman Michael Schaper said.
“The arrangements could also put other car rental companies which are outside the group at a competitive disadvantage, including any other car rental company operating at Perth Airport,” he said.
“The ACCC has always recognised that collective bargaining can operate successfully when there are mutual benefits for the target and the bargaining group. However, because taking part in collective negotiations is voluntary for both parties, such negotiations are unlikely to be successful unless both achieve a benefit.
“In this case it is difficult to see how collective bargaining will be successful and achieve the public benefits claimed by the companies.”
Shortly after the notification was lodged in early May, the ACCC issued a draft objection notice preventing the car rental companies collectively bargaining pending a final decision.
At the time the ACCC was concerned that collective bargaining could undermine the ‘request for proposal’ process that Perth Airport was then undertaking.
The car rental companies subsequently lodged offers for new car rental licences in accordance with this process.
Notwithstanding this, the group members continued with their application to collectively bargain as they wanted to make collective representations to Perth Airport about possible variations to or renegotiation of licences and about other matters.
In its submission to the ACCC, Redspot strongly objected to the collective bargaining application, claiming that it would lessen competition.
It claimed that its on-airport competitors: “Are not prepared to negotiate on, pay a premium or compete for the desk site positions they currently hold. Their preference is for the allocation of facilities to be awarded on the basis of market share”.
Redspot also drew to the ACCC’s attention that recent collective bargaining by the same group of companies with Mackay Airport in Queensland had put Redspot at a disadvantage.
