Qantas attacks ministry decision

Qantas has joined low-cost subsidiary Jetstar in lambasting the Transport Ministry for plans to close a loophole that has allowed Jetstar to avoid paying passenger levies to the Civil Aviation Authority for safety oversight.

Jetstar boss Bruce Buchan believes the decision to charge it 83 per cent of the $2 per passenger per sector levy – paid by other airlines – from next month will cost it an extra $4.8 million a year.

The ministry is charging it the lower rate of $1.66 per passenger for each leg flown because i the CAA is not solely responsible for direct regulatory oversight of these airlines.

When Jetstar started flying domestically in New Zealand in June it did so under the relatively new ANZA (Australia and New Zealand Aviation) mutual recognition privileges, whereby airlines can operate in each other's country without the need for separate approval by the host regulator.

Most airlines have applied for the privileges, but at this stage only Jetstar is using them in New Zealand after it replaced Qantas on the routes.

Qantas's departure left a $3.5m hole in CAA's accounts.

Qantas and Jetstar both claim the charges are an additional levyn its New Zealand-based operations even though it pays no passenger levies for its New Zealand domestic service to either CAA or Australia's Civil Aviation Authority, under which Jetstar operates here.

CASA said it was not responsible for New Zealand's safety oversight and it had nothing to do with the fees charged for the service.

Transport Minister Stephen Joyce said this week that the new levies would come into effect on December 4.

They would create "a level playing field by ensuring all airlines contribute to domestic aviation safety".

But Qantas said the changes would "have adverse implications" for operators wanting to invest in either country.