Why Perth Airport Is Physically Blocking Virgin Australia Planes

Filed Under: Virgin Australia

Earlier this week Virgin Australia entered administration. This came after Virgin Australia’s request for government funding was denied, and their existing shareholders were unwilling to fund the airline any further.

Perth Airport puts lien on Virgin Australia planes

Virgin Australia allegedly owes Perth Airport about 16 million AUD in fees, including for airfield and terminal use charges. This is largely money that the airline has already collected from passengers, but hasn’t paid to the airport.

As a result, Perth Airport has put liens on four Virgin Australia aircraft at the airport, including Airbus A330s and Boeing 737s. In the case of an A330, a large vehicle was parked in front of it to prevent a tow bar from being attached, while in the case of a 737, a bulldozer is sitting in front of the plane.

This is clearly a long-term negotiating technique for the airport, as the airline isn’t actually using these planes. A spokesperson for Perth Airport said that the airport is “working cooperatively with Virgin’s administrators to try to help the airline come through the current coronavirus crisis.”

The spokesperson said that this is a standard practice, and they aren’t blocking any planes that the airline would currently be using. As a matter of fact, Virgin Australia continues to operate (government subsidized) flights to Perth Airport, and those are allowed to operate.

Perth Airport put liens on Virgin Australia planes

Qantas even defends Virgin Australia

Qantas and Virgin Australia have big issues with one another, and Qantas has basically been calling for Virgin Australia to be liquidated. Nonetheless the airline has come to Virgin Australia’s defense:

“Even by Perth Airport’s standards, this is extraordinary behaviour. Protecting your interests is one thing but parking a bulldozer in front of an aircraft while saying you’re ‘working to secure an agreement’ is ridiculous.

Even by Perth Airport’s standards, this is extraordinary behaviour. It’s no way to treat a customer of 20 years. This kind of action is deeply worrying for all users of Perth Airport.”

In fairness, Qantas has a motive here. Qantas and Perth Airport have had huge disagreements over fees in recent years, as Qantas has argued that the airport fees are unreasonable.

Perth Airport at the time claimed that Qantas owed the airport over 10 million AUD in unpaid fees, which Qantas disputed.

I think it’s safe to assume Qantas’ defense here isn’t because they’re concerned about Virgin Australia, but rather because this furthers their case against Perth Airport.

Qantas has also had big issues with Perth Airport

Bottom line

I hope that Perth Airport doesn’t have any short-term uses for the vehicles/tractors being used to block Virgin Australia planes, because they may be there for a while. It’s interesting to me just how low-tech the lien process is.

Could the airport not request that ATC not give certain planes permission to take off, or does that cross the line between the business and operational sides of the airport?

Comments
  1. The FT is reporting that 10 parties are interested in Virgin Australia including the Virgin Group but the airline is saddled with $5billion ASD. It’s going to be a case of watch this space.

  2. They should just put a boot on the front gear and be done with it- that would be a classic photo.

  3. Having worked with numerous airports over the years with financially shaky, and flat-out insolvent airlines, I’ve never encountered such petty things as blocking aircraft.

    We DID however get nasty-grams from State Attorneys and such, threatening to prevent us from using the gates and airport terminal, but never action, and even the threats were about action some 30-60 days out, not immediately. The airport in question was owned by the State. The local airport people were actually very friendly, helpful, and understanding. It was further up the political chain that people weren’t so nice.

  4. Perth Airport has shown time and time again that they prefer stepping over dollars to pick up pennies and behave like children when negotiating.

    Perth Airport got into a fight with Qantas because it tried to retroactively apply a fee uplift for activity before the recontracting process was completed. They also got into a fight with Qantas about opening up new routes saying they’d only allow it if Qantas would operate these from Terminal 1 rather than T3/T4 where all of Qantas domestic and international flights run from.

    This is just more validation that Perth Airport forgets who it’s main customers actually are.

  5. Qantas had a plane blocked in canberra just 2 years ago due to landing without anything resembling a commercial arrangement

    Airports cost money to operate and airlines should indeed pay their overdue invoices

  6. As an ex VA platinum before relocating back to Europe. I feel very sad about this , the last thing Australia needs is a Qantas monopoly,however VAs business model has been shaky at best. I’m glad I spent all my velocity points before they disappeared for good.

  7. ATC is there to facilitate the safe movement of aircraft. It is not there to police or even question that movement. Adding even more complexity to the ATC job, will only reduce the quality of safety which ATC can provide.

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