The latest Airport Monitoring Report from the ACCC has revealed that operating profits from four of Australia’s largest airports have hit a decade-low level following a dramatic fall in passengers during the COVID-19 crisis.
While airports felt the full impact of the COVID-19 pandemic only in the last quarter of 2019-20, aggregate operating profit from aeronautical activities at the four monitored airports (Brisbane, Melbourne, Perth and Sydney) dropped by 55.4 per cent.
The four airports collectively achieved operating profits of $390.7 million in 2019-20, which is partly a reflection of their prior strong financial positions. However, the ACCC expects the 2020-21 monitoring period will show even greater impacts from the pandemic.
Passenger numbers across the airports fell by 26.5 per cent compared to the previous year. As a result, aeronautical revenue for the full year dropped by between 15.5 per cent and 21.6 per cent.
“The pandemic has devastated the aviation sector and airports are no exception,” ACCC Chair, Rod Sims, said.
“While the 2019–20 year only included the beginning of the pandemic, its impact was so sharp that it led to substantial falls in airports’ yearly results. The ACCC is conscious of the hardship that COVID-19 has caused aviation businesses and their employees but we will watch the sector closely during the recovery phase.
“Through our airports monitoring, and our more recent airlines monitoring role, we will observe how industry participants interact as the sector recovers.
“Given the airports’ existing market power, it will be critical that legitimate attempts to return to a sustainable financial position do not stray into anti‑competitive behaviour, or result in unreasonable price increases.”
While most of the monitored airports continued to implement medium-term investments such as construction of new runways, the impact of the pandemic caused some discretionary capital expenditure to be deferred, the report reveals.
Daily car parking numbers across the four airports fell by between 21.2 per cent and 28.8 per cent, which caused combined car parking revenue to drop by 24.4 per cent to $343.2 million.
While overall profits fell, the four monitored airports continued to generate high car parking operating profit margins of between 48.5 per cent and 60.5 per cent.