Pilots with decades of experience say they have never encountered such a comprehensive fueling breakdown as the crisis at Perth Airport on Saturday, in which almost 70 flights were cancelled and hundreds delayed or diverted to remote regional airports. They included Qantas’ London-Perth-Melbourne QF10 Dreamliner (B787) flight, which was forced to touch down at Karratha in the far northwest of the country.
The incident is the latest black mark against privatisation of the sector in Australia, with passengers remaining stuck on Monday according to local news reports. It came just nine months after Perth Airport Pty Ltd (PAPL) bought the airport’s fuel business from global energy giant BP, an asset it has long sought to get its hands on, according to people familiar with the business. BP is contracted to manage the facility.
The problem was a collapse in pressure of the distribution system that pumped fuel from three underground tanks, according to PAPL chief executive Jason Waters. The facility requires around-the-clock expertise but insiders have claimed that the fuel tanks were allowed to run too low overnight, creating a situation where there was no pressure left to pump fuel into planes.
In an interview with ABC Perth on Monday, which PAPL referred Crikey to, Waters admitted that “once we realized it was a bit more on the serious end, and it didn’t return to service under sort of normal operation… we called in experts from our partners.”
Crikey understands the experts were from BP and Waters couldn’t, or wouldn’t, say whether the problem was the fault of BP or PAPL.
The airport has been in private hands since 1997. Its largest shareholder is New Zealand-based investment fund Morrison, through two shareholdings worth 55.6%. Other shareholders include superannuation funds including an arm of the Federal government-owned Future Fund that holds 30%.
Several people who have worked at airports for many years told Crikey that PAPL has long been known for underinvestment (a longstanding issue for Qantas), cost-cutting and revenue-raising — such as the dramatic increase in on-site car parking that has become a hallmark of Australia’s privatised airports. For instance, despite scores of hectares of empty land around the airport, the free drop-off or pick-up time in the car park is only 10 minutes; 10-15 minutes is $7.80, to park for 30 mins is $9.60, only $1 less than at the famously expensive Sydney Airport.
Efforts to complete a hallmark central terminal have stuttered since the 1980s and plans for a second parallel runway have remained on hold despite being recommended in 1979.
Instead, PAPL has been focused on its property business. It is the second biggest property landlord in Western Australia with a $1.5 billion portfolio and recently boasted that it has an additional 371.3 hectares of land to develop for non-aeronautical purposes.
It has subleased large tracts of land on the airport’s fringes that it controls under a 99-year lease with the government of Western Australia to more than 150 tenants, including industrial estates, logistics businesses, big box retailer Costco and factory outlet stores.
“It’s a perfect storm of mismanagement, a ruthless airport operator trying to milk it by cost-cutting and aging, ancient infrastructure,’’ one Perth-based Qantas pilot told Crikey.
It was exquisitely ironic that the refuelling failure came only a day after Qantas chief Vanessa Hudson was at the airport trumpeting “the largest airport infrastructure deal in our history”, even though Qantas is largely not paying for PAPL’s $5 billion airport upgrade. The deal is a breakthrough in a long-running stoush between PAPL and Qantas over the airport’s failure to invest in infrastructure that is so bitter it has descended into the courts.
The combination of PAPL’s infrastructure go-slow, plus what many at Qantas see as the company’s Sydney-centric approach, resulted in Qantas ceding the bulk of direct offsho