Following a recent ACCC report that claimed major investment in airport facilities will likely lead to higher airfares, the Australian Airports Association (AAA) has clarified that private investments were needed to keep pace with rising passenger demand.
AAA CEO Simon Westaway said that over the next decade, $33 billion will be spent by the big four airports in collaboration with airlines to expand terminals, improve baggage processing, upgrade runways and deliver better passenger amenities.
“This investment is privately funded and is essential to ensure airports can continue to support Australia’s aviation needs while maintaining strong service standards,” Westaway said.
The AAA chief also noted that passenger ratings at Aussie hubs have remained high over the past decade, despite significant increases in passenger numbers.
Sydney, Melbourne, Brisbane and Perth handled 119.8 million passenger movements in 2024-25, with international passenger numbers alone increasing by 9.5%.
However, the positive growth in pax volumes has also presented challenges, Westaway warned.
“Many Australians have likely experienced crowding at international terminals in recent years, and we’re working to fix this,” he said.
“Sustained private investment of this scale requires regulatory certainty and commercially viable returns to support long-term infrastructure planning.”
Another major hurdle facing airports is the high inflationary environment in which they are funding the crucial upgrades.
“The ACCC report highlights a profitable sector supported by strong international travel but also indicates that airports are facing rising cost pressures – like the rest of the aviation sector – with expenses up 8.1% last financial year,” Westaway said.
Airports and airlines have been at loggerheads in recent years around airport fees, with carriers like Qantas and Virgin Australia previously arguing rising charges are the result of monopolistic behaviour and weak oversight.
The Board of Airline Representatives of Australia (BARA) stated on Friday that the $1.2 billion in aeronautical operating profits in 2024–25 by the big four airports was a major “concern”.
BARA called for the Productivity Commission to examine whether the airport monitoring regime remained “fit-for-purpose”.
“Without effective economic oversight, these investment costs, and the increased airport returns they generate, are reflected in higher airport charges to airlines – which ultimately pass through as higher airfares,” BARA executive director Stephen Pearse said.
