Aviation lobby group Airlines For Australia and New Zealand (A4ANZ) is calling for government regulation of four major Australian airports, in the wake of an ACCC report showing significant profits were made over the 2023-24 financial year.
In response to the competition watchdog’s Airport Monitoring Report 2023-24, A4ANZ said airports in Australia have no incentive to act in anyone else’s interest.
“Airports have their hands in passengers’ pockets from the moment they enter airport property – including for rental cars, taxi and rideshare surcharges, and in particular car parking,” said A4ANZ Chairman, Professor Graeme Samuel.
“The most recent ACCC data showed the four major airports reported profit margins above 60% for the second year in a row for car parking – these are super profits, well above those recorded by airlines, banks, or supermarkets,” Samuel added.
However, Simon Westaway, AAA CEO, hit back and said, “Four reviews by the Productivity Commission over the last 20 years have found the current regulatory regime remains fit for purpose and there is no evidence that airports have exercised market power.”
“Airport fees and charges remain a small proportion of an airline ticket and do not fluctuate, despite claims by airlines of monopoly behaviour.
The Productivity Commission found airports continue to invest in facilities efficiently.”
Westaway also noted that the Australian air passenger numbers being close to pre-COVID levels has also boosted the performance of airports in recent years, since the lost of significant revenue due to the pandemic and border closures.
“A portion of aeronautical profits in the 2023-24 ACCC report were partly inflated by airline back payments at Sydney Airport, while total operating profits were still 7.1% below pre-pandemic result,” he said.
A4ANZ acknowledged the ACCC finding that airports had resumed investing in new facilities and services following the pandemic, but said greater transparency and scrutiny are still needed to ensure capital expenditure is useful and not “inefficient gold-plated infrastructure”.
Future investment outlined in the report includes a $5 billion transformation in Brisbane ahead of the 2032 Olympic Games; an overhaul of Terminal 2 in Sydney and the opening of Western Sydney Int’l Airport; a third runway in Melbourne; and a new terminal and runway in Perth.
And as Westaway noted, “Australia’s top four airports are set to invest around $19 billion in crucial infrastructure upgrades over the next decade, to ensure both air passengers and airlines have access to world class facilities.”
However, Samuels said: “The Aviation White Paper recommended enhanced monitoring of Sydney, Melbourne, Brisbane, Perth and Western Sydney airports.”
“We don’t consider that monitoring alone can be effective in constraining monopoly airports from extracting every available dollar from airline passengers.
“As the ACCC have stated, without appropriate regulation, an airport can exercise its market power to earn monopoly profit to the detriment of airport users and the broader Australian economy.”
