Qantas chief executive Alan Joyce says Canberra Airport's exorbitant fees have killed any chance of making low-cost carrier Jetstar fly to the capital.
But the airport has hit back, saying other budget carriers like Tiger Air have been able to make it work.
In an address at the National Press Club in Canberra on Wednesday, Mr Joyce and Virgin Australia chief executive Paul Scurrah urged the Morrison government to re-introduce arbitration between airports and airlines.
They claimed the excessive landing fees charged by airports were pushing up airfares and hampering Australia's productivity.
Mr Joyce said Australian airports were charging 25 per cent more per passenger than they did 10 years ago.
In the same time, airfares had fallen 40 per cent, Mr Joyce said.
However, data from the Bureau of Infrastructure, Transport and Regional Economics showed airfares from Canberra have increased substantially in that time.
In 2010, the cheapest average fare was $175. In 2019, it's $298.
But Mr Joyce said the fees from Canberra Airport could be as high as $25 at one end.
"Jetstar carries 36 million people per year, 24 million people are transported for under $100. You can see how a $50 airport charge can kill a market, can kill a route, can kill an ability for an airline to make direct destinations viable," Mr Joyce said.
"We have no other airport in the country that Jetstar flies to where the airport charges would be as high as that, so we can't put Jetstar in, because it economically doesn't work for us, because that's part of the business model."
Mr Joyce also repeated his criticism of Canberra Airport's "ransoming" of a Qantas plane last year until a $18,000 bill was paid over the phone by credit card as "the closest thing to piracy that I've ever come to".
"We've got into a diplomatic incident, the High Commissioner of Kenya wrote us a complaint saying how dare we diminish the good name of his country by comparing it to Canberra Airport," he joked.
However a Canberra Airport spokeswoman said Mr Joyce's comments were unhelpful.
"In the last few years, we have brought more carriers to Canberra from Singapore Airlines, Qatar, Fly Pelican, to Tiger Air and we are currently in good faith negotiations with Jetstar, so the tone of today's comments was disappointing and unhelpful to this serious debate," she said.
"All of these claims were carefully considered by the independent Productivity Commission several times, and they reached the conclusion that there was no evidence of monopoly profits, misuse of market power, or the need for arbitration."
The spokeswoman also pointed out: "Tiger Air makes it work and has expanded its services here at Canberra Airport."
But Mr Scurrah said the super profits of Australian airports were unsustainable.
He said one airport's annual report "proudly" noted revenues from aeronautical services had increased by 52 per cent, while in the same period aircraft movements fell by 0.3 per cent.
Another airport reportedly told analysts it would deal with subdued demand by increasing prices, Mr Scurrah said.
"I argue Australia's aviation system simply cannot afford golden runways that support profit margins north of 45 per cent," he said.
Mr Joyce also addressed criticism about his staggering $24 million salary, after he was revealed as Australia's highest paid executive.
He said the data the list was drawn from was more than two years old, and "has come down quite significantly since then".
"And my salary was determined by our shareholders, and the reason why ... was because the Qantas share price went from $1 to $6," Mr Joyce said.
"That's because our market capital went from just over $2 billion to $10 billion.
"And our shareholders did exceptionally well out of it, and every report that Qantas has had, has had a 98 per cent or 99 per cent support. Because the shareholders want the CEO and the management to be incentivised to actually turn the company around. And it was, I think, the biggest turnaround in corporate Australian history."
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