Travellers paying more to fly because of airport fees

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Australia’s major airports are making huge profits and passengers are left with higher prices as a result, says the consumer watchdog.

According to the Australian Competition and Consumer Commission’s (ACCC) annual Airport Monitoring Report, Brisbane, Melbourne, Perth and Sydney airports all reported a significant increase in revenue in the 2016-2017 year.

The report, which will monitor the performance and revenue of all the major airports until 2020, shows they reported an increase in both car parking revenue as well as aeronautical activities, with consumers left feeling the pinch.

“It is not surprising that the airports are so profitable, given that they face little competitive pressure and no price regulation,” said ACCC chairman Rod Sims.

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

The majority of each airport’s aeronautical revenue comes from charging airlines to use infrastructure, such as runways and terminals, as well as the bane of many travelers, parking.

“Airfares are going down but they would have been going down further if you hadn’t had constant increases in the aeronautical charges from the airport,” Mr Sims added.

The Australian Airports Association has rejected the ACCC claims, stating the report did not contain airfare data. Chief Economist Warren Mundy said he was surprised by chairman Rod Sims’ comments that higher airport charges have led to higher ticket prices.

“This is a peculiar observation by Mr Sims seeing that the monitoring report contains no data on airfares,” Dr Mundy said.

He went on to say that the Board of Airline Representatives of Australia recently reported that international airfares have fallen in real terms by around 40 per cent since 2006.

The ACCC also noted in its report that all four airports recorded an increase in passenger volumes, forcing airports to invest in expansions and upgrade.

“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.

How to save on airport parking

On average across the four airports, revenue per passenger rose by 4.6% over the previous year, with Perth’s revenue per passenger increasing by 7.2%, the most out of the four, the report found.

Airport car parks are also emptying consumer pockets, with the combined operating profit of all four airports totaling more than $280 million for the year, with the ACCC reporting that motorists are left paying upwards of $70 for parking.

“Motorists concerned about the price of airport parking should plan ahead as there are savings available,” added Mr Sims. “Booking online could save you around 20 per cent or more on long-term parking at the airport, while choosing an independent carpark near the airport could save you about 40 per cent.”

Despite the ACCC’s concerns over prices and potential monopoly of the airport market, it has no plans to begin regulating. A full breakdown of the report is available on the ACCC’s website.

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