good sign, page-7

interesting read..dwecke This great article was on Crikey website and they give a very good and interesting perspective on current MAP situation...a well written piece.
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Is MacBank worried about Sydney airport?


Michael Pascoe writes:
Date: 14 December 2005


Even by Macquarie Bank standards, the latest try-on by Sydney Airport is breath-taking: an attempt to transfer the risk of a sharp fall in passenger numbers on to the airlines.

The question raised by such an outrageous grab though is how worried Macquarie Bank must be about its much-vaunted model to attempt such a stunt.

The scheme is exposed by the Australian Competition Tribunal in its detailed reasons for partially re-regulating the monopoly – and in the process, the ACT shoots down Max Moore-Wilton's feeble attempt to defend his outfit's greed and abuse of power.

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Richard Gluyas has the story in The Australian. Sydney Airport's draft aeronautical services agreement included “an unusual and onerous” clause that would allow it to hike charges to fully recover revenue losses that would occur if domestic or international passenger numbers fell by 20%.

Despite the best efforts by the Australian Financial Review's Chanticleer, most punters are unaware of just how precarious the Sydney Airport financial structure is thanks to the mountain of debt being carried from the high price Macquarie Bank paid. An outbreak of terrorism or bird flu that saw a sharp fall in passenger numbers could be disastrous for the Millionaire Factory.

Given the competition spotlight Sydney Airport has been under, an investor might wonder at the extent of Macquarie's hubris to draft such a clause – or worry about how fragile the structure might be.

As Gluyas reports: “The tribunal uses the proposed force majeure clause as an example of SACL's misuse of its monopoly power, where it is seeking to impose an unreasonable condition that is unlikely to exist in a functioning, competitive market.”

The re-regulation Sydney Airport has brought on itself will have further deepened the contempt it's held in by other Australian airports. If there's one group that dislikes SACL more than the airlines and passengers, it's the other airports as they have correctly feared the Macquarie gouge would result in re-regulation. Their concern is that Sydney might not be the last airport to be declared, as they are nearly all monopolies.
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