Airport infrastructure cash splash could drive up prices: ACCC

“Ongoing investment is needed to ensure airports can continue to meet the needs of travellers and airlines, with Sydney, Melbourne, Brisbane and Perth airports collectively handling about 120 million passengers in 2024-25,” said ACCC Commissioner Anna Brakey.

“Large capital programs are likely to place upward pressure on airport charges paid by airlines, which may result in higher airfares for passengers as these costs are recouped.

“It is important that airport charges reflect sensible and timely investment decisions, efficient costs and a rate of return that matches the risks involved.”

While the airports collectively brought in around $2.9 billion in operating revenue for 2024-25, Sydney saw the highest profit at $584.3 million, due to its greater share of more lucrative international passengers.

It also recorded a 20.8 per cent return on aeronautical assets, the highest seen by the ACCC in two decades of monitoring.

“Sydney Airport continues to earn significantly more aeronautical revenue and profit than the other major airports, both from a total and per‑passenger perspective,” said Brakey.

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“Sydney Airport’s aeronautical profits eclipsed all of the other airports combined, more than double Melbourne as the next most profitable.”

The big four airports saw a total passenger growth of 4.6 per cent in 2024-25, largely driven by a 9.5 per cent increase in international travellers to 40.4 million.

Perth had the highest growth in international at 17.8 per cent, followed by Brisbane (16.3 per cent), Melbourne (8.3 per cent), and Sydney (5.5 per cent).

“While international passenger growth slowed from 2023-24 to 2024-25, the continued strong passenger growth reflects the willingness of international airlines to add services to Australia’s major airports,” said Brakey.

“Domestic passenger numbers grew by 2.2 per cent to nearly 80 million – highlighting a sustained demand for leisure travel and tourism within Australia.”

The ACCC’s latest report comes as Sydney plans to link its two domestic terminals, Melbourne prepares for an overhaul of its international terminal, Brisbane renovates both its international and domestic terminals, and Perth moves to consolidate operations at its Airport Central precinct.

According to Simon Westaway, CEO of the Australian Airports Association, $33 billion is being invested at Australia’s four largest airports over the next 10 years to “expand terminals, improve baggage processing, enhance security and screening areas, 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,” he said.

“Sustained private investment of this scale requires regulatory certainty and commercially viable returns to support long-term infrastructure planning. Major airport infrastructure such as runways and terminal expansions can take many years to plan, approve and then construct.

“Many Australians have likely experienced crowding at international terminals in recent years, and we’re working to fix this.

“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 per cent last financial year.”

The ACCC has suggested the government “consider directing the Productivity Commission to commence a new inquiry into whether the regulatory settings for airports are appropriate”.