Record profits at Australia’s big four airports despite weak passenger growth

written by Adam Thorn | February 24, 2020

Australia’s four biggest airports increased aeronautical profits by 3.6 per cent in 2018-19, despite sluggish passenger growth and a drop in domestic passengers in Sydney.

The findings form part of a new report by the Australian Competition and Consumer Commission, which revealed the $863.5 million operating profit was driven by the east coast airports of Brisbane, Melbourne and Sydney.

The ACCC defines aeronautical profits as those relating to airport services necessary for the operation of civil aviation.

Advertisement
Advertisement

The commission’s 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.”

Qantas Boeing 787-9 VH-ZNJ lands in Sydney after flying non-stop from London. (Qantas)
Qantas Boeing 787-9 VH-ZNJ lands in Sydney after flying non-stop from London. (Qantas)

The ACCC’s annual report monitors the quality, costs and profits at Brisbane, Melbourne (Tullamarine), Perth and Sydney (Kingsford Smith) airports for 2018-19.

Its headline findings were:

  • At Brisbane, revenue per passenger grew by 11.3 per cent and Melbourne reported the strongest profit growth at 11.1 per cent;
  • Sydney Airport’s return on aeronautical assets was at its highest since monitoring began, rising to 12.5 per cent, as returns to the other three airports fell;
  • At Perth, the operating profit from aeronautical operations fell by 19.2 per cent to $75.7 million; and
  • All four airports maintained a ‘good’ rating for their overall service, which last occurred in 2005.

Meanwhile, the profitability of car parking fell, as savvy passengers found alternative modes of transport.

PROMOTED CONTENT

The airports collectively earned $276.1 million from those leaving their vehicle on-site, down 2.5 per cent.

Both Sydney and Melbourne earned lower profits from the previous year, while Brisbane and Perth’s increased.

Sims said, “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.

“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.

“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.

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

“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.”

Leave a Comment

Your email address will not be published. Required fields are marked *

Each day, our subscribers are more informed with the right information.

SIGN UP to the Australian Aviation magazine for high-quality news and features for just $99.95 per year