Airlines for Australia and New Zealand chairman Graeme Samuel said overdevelopment and a lack of consumer competition regulation at Canberra Airport had meant higher costs for airlines.

"If their costs can be lowered their airfares should be able to be pushed down," Mr Samuel said.

But Canberra Airport chief executive Stephen Byron said Mr Samuel had told him in early March he was a huge fan of the airport.

"He told me that Canberra Airport was the best airport in Australia," Mr Byron said.

Mr Samuel is paid by the alliance as chairman, whose members include Air New Zealand, Qantas, Regional Express, Tigerair and Virgin Australia.

In a submission to the Productivity Commission's inquiry into airport regulation, the industry group cited Canberra Airport as one of the reasons why more regulation over Australia's airports was needed.

It referred to the March 2017 incident in which a Qantas flight bound for Sydney was forced to make an unscheduled landing at Canberra Airport because of bad weather.

Canberra Airport then parked a car behind a Qantas airplane and demanded $18,000 in airport usage fees to be paid by credit card before the plan could take off.

"Not only did this have potential safety implications, but the inefficiencies created by the delay come at a significant cost that flows all the way through to the individual consumer," the submission reads.

"At the same time, airport operators were engaging in a negative political and media campaign regarding flight cancellations."

The spat between the air carrier and the airport escalated in May when Qantas chief executive Alan Joyce likened the airport to Somali pirates.

Mr Samuel said the 2017 incident was "blatant misbehaviour" on the airport's part.

Mr Byron said the airlines were arguing for themselves because they didn't want to reduce airfares, only boost profits.

"They say in their submission that these things shouldn't be dealt with by rhetorical flourish, then they engage with exaggeration and to be quite frank, fake news," Mr Byron said.

He pointed to an ABC interview with Mr Samuel in August last year in which the chairman claimed the higher train fares to use the stops at Sydney Airport were imposed by the airport.

Mr Byron said the extra fare did not go to the airport.

"It's bullshit and a rip off and Sydney Airport is completely against it," Mr Byron said.

"Sydney Airport have lobbied the NSW government on the public record for a reduction in that surcharge."

Mr Samuel said Canberra Airport was in a unique position because it was heavily used by politicians and public servants and operated like a monopoly, charging excess fees because airlines had no choice but to use the airport.

He also said the airport was overdeveloped and had passed these costs on to airlines, gold-plating their fees.

Mr Samuel paraphrased Australian Competition and Consumer Commission chairman Rod Simms and said monopolies had no incentive to keep prices reasonable or lift the quality of the service.

Mr Byron said airlines were arguing with his airport over surcharges that were only a matter of cents per customer and they would refuse to pay them if they didn't like them.

The airport had recently introduced new security screening, passing on the cost of 24 cents per passenger, Mr Byron said.

One airline, which he refused to name, didn't pay the fees for 18 months before finally agreeing to pay 19 cents per passenger instead, he said.

In a separate submission, Jetstar's parent company Qantas told the Productivity Commission that Canberra Airport's high fees would make up a third of Jetstar's costs of flying to the capital.

This would make it "untenable" for the low budget airline to fly there, according to the submission.

Mr Byron said the real reason Jetstar wasn't coming to the capital was because Qantas wouldn't make as much of a profit from the route

"Tiger Airlines operates to Melbourne and Brisbane and they're very happy with the charge, so you can't say Canberra Airport charges prevent a low-cost airline coming into Canberra," he said.

Despite the tensions between the alliance and the airport, Mr Byron said its relations with Qantas since the March 2017 incident had improved.

The airport had originally complained about frequent delays and cancellations by the airline but Mr Byron said this had improved dramatically.

Mr Samuel said he wanted to see regulators force airlines and airports to come to a more reasonable agreement on usage fees.

Mr Byron hoped the Productivity Commission considered all the facts but said the current regulatory environment was operating reasonably well.