The ACCC has released its annual Airport Monitoring Report, which finds that airports are delivering good service for passengers as well as increasing profits.

The report evaluates the performance of Australia’s four largest airports – Sydney, Melbourne, Brisbane and Perth – on prices, costs, profits and quality of service.

The four airports collectively earned $863.5 million in operating profit from aeronautical activities in 2018-19, up 3.6 per cent. This result was achieved despite weaker passenger growth and a drop in domestic passenger numbers at Sydney Airport.

The result was driven by the east coast airports, with Brisbane, Melbourne and Sydney all reporting higher aeronautical revenue, revenue per passenger and operating profit.

At Brisbane Airport, revenue per passenger grew by 11.3 per cent, while Melbourne reported the strongest profit growth at 11.1 per cent.

“Despite weaker growth in the number of passengers flying in 2018-19, together the four largest airports have managed to report record profits from aeronautical activities,” ACCC Chair, Rod Sims, said.

“Australia’s four major airports have collectively increased their aeronautical profit almost every year over the 17-year lifespan of the ACCC’s monitoring. This may illustrate the benefit of being a monopoly.”

Sydney Airport’s return on aeronautical assets was its highest since the monitoring regime began, rising to a return of 12.5 per cent, while returns for the other three airports fell.

At Perth Airport the operating profit from aeronautical operations fell by 19.2 per cent in 2018-19 to $75.7 million due to lower charges to airlines and higher costs associated with taking back operational control of its domestic terminal T4 from Qantas.

‘Good’ service overall at all four airports

All four airports maintained a rating of ‘good’ for their overall quality of service in 2018-19.

Melbourne and Sydney airports’ overall ratings improved slightly, while Brisbane and Perth’s ratings showed a modest decline.

Perth Airport received the highest overall rating of the four airports for the third year in a row, while Sydney Airport received its highest overall rating since ACCC monitoring began.

“We have seen some promising results in terms of quality of service this year, with passengers particularly satisfied with their overall airport experience,” Mr Sims said.

“Airlines, on the other hand, have expressed concerns to us about issues such as congestion of runways and taxiways, as well as the adequacy of the baggage facilities at several airports.”

Congestion of airside facilities may be impacting on flight punctuality. The number of flight delays has increased in recent years. While on-time performance can be influenced by a range of factors, Melbourne Airport has said that its delays will likely worsen until it builds its proposed new runway.

The Australian Airports Association (AAA) AAA National Chairman, Tom Ganley, said the report confirmed airports were continuing to invest in the services and facilities that make a real and positive difference for passengers and visitors.

“After years of investment in capacity, services and facilities, passengers are benefiting from more choice across their airport journey,” Mr Ganley said.
“We are pleased to see the ACCC confirm another year of good quality of service ratings across all four monitored airports.”

Mr Ganley also said that airports would keep working closely with their airline customers to ensure airport assets continue to evolve in line with airline needs and passenger expectations.

“More than 203 million passengers will pass through our four largest airports each year by 2040 and that represents enormous potential for Australian tourism into the next decade and beyond,” he said.

“This year’s opening of Brisbane Airport’s new runway will be just the start of the next wave of capacity building projects, bringing new opportunities for both airlines and passengers.

“New runways in Melbourne and Perth, and Sydney Airport’s plans to continue investing $1 million a day in capacity and efficiency improvements, will also underpin decades’ worth of aviation growth.

“Despite the immediate challenges the tourism and aviation industry is facing, our airports’ investment plans for the next decade will support new growth and opportunity over the long term.”

Car parking profits remain very high, but consumers have greater options

The report also showed that profitability of car parking has continued to fall overall, as travellers explore alternative ways of getting to and from airports.

The airports collectively earned $276.1 million in operating profit from car parking in 2018-19, down 2.5 per cent. Both Sydney and Melbourne airports earned lower profits than the previous financial year, however Brisbane and Perth airports’ profits increased.

“While Melbourne Airport has reduced its car parking prices, and profits generally have fallen, the airports are still earning very high profit margins from car parking,” Mr Sims said.

Sydney and Brisbane airports were typically the more expensive airports for short-term parking near the terminals, while Sydney and Perth were generally the more expensive airports for long-term parking away from the terminals. Parking prices generally increased in 2018-19 at Brisbane Airport, while they continued their downward trend at Melbourne Airport.

“We know that consumers are frustrated with the cost of parking at the airport, but there are steps people can take to help secure more favourable rates,” Mr Sims said.
“Last year, motorists who parked at an airport car park away from the terminal paid up to 60 per cent less than those who parked right at the terminal. On top of this, drivers who pre-booked online paid up to 39 per cent less than the drive-up rates available.”

“People looking for the best rates should also consider the prices available from independent car parks near the airport,” Mr Sims said.
Mr Ganley said the AAA now looked forward to engaging with the ACCC as it reviewed its monitoring arrangements.

“In an industry as dynamic as ours, it is important that monitoring arrangements have the opportunity to evolve over time,” Mr Ganley said.

“Improvements to the monitoring regime will ensure passengers can clearly see how our airports are working for them to keep enhancing their travel experience.

“We look forward to working with the ACCC during the consultation process.”

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