Airport profits continue to grow

Brisbane, Melbourne, Perth and Sydney airports all significantly increased their profits from aeronautical activities in 2016-17, with profits per passenger also rising, according to the ACCC’s annual Airport Monitoring Report.

The four airports earned a combined $757.6 million in operating profits (EBITA) from aeronautical activities in 2016-17, up 9.9 per cent in real terms from the previous year. Sydney Airport alone earned $360.8 million.

“It is not surprising that the airports are so profitable, given that they face little competitive pressure and no price regulation,” ACCC Chairman Rod Sims said.Sydney Airport earned $18.3 per passenger in aeronautical revenue (up 4.4 per cent) while revenue per passenger at Perth Airport grew by 7.2 per cent to $15.8.

“Profits per passenger have also risen at each of the four airports and travellers are paying for this through higher ticket prices,” Mr Sims said.

“We remain concerned that the current regulatory regime which is limited to monitoring the covered airports, doesn’t constrain the market power of four of Australia’s major airports. Unconstrained monopolies often have an incentive and ability to charge excessive prices while lacking strong incentives to improve services.”

While overall passenger numbers across the four airports grew by three per cent last financial year, international passengers remain the driving force in growing passenger numbers, increasing by 6.7 per cent, compared with just 0.9 per cent growth for domestic passengers.

“The four airports are handling 30 million passengers a year more today than they did a decade ago,” Mr Sims said.

“But we are pleased the monitored airports appear to be dealing with the challenge of congestion, and three of the four airports are in the process of either constructing or planning a new runway.”

Perth and Brisbane airports maintained their ‘good’ rating for overall service quality on aeronautical and car parking operations, based on data analysis and user feedback. Melbourne and Sydney were rated at the top end of ‘satisfactory’.

Perth Airport overtook Brisbane Airport with the highest overall quality rating of the four airports.

“It is clear that Perth Airport’s investment program over the past few years has significantly improved the quality of the airport in the eyes of both airlines and passengers,” Mr Sims said.