Australia’s major airports have all been haemorrhaging money from aviation operations, but were able to stay profitable during the Covid recovery from tens of millions of dollars in car parking fees, retail and other charges.
In its latest airport monitoring report of Australia’s four major airports – Sydney, Melbourne, Perth and Brisbane – the Australian Competition and Consumer Commission (ACCC) renewed its recommendation to the government to require the airports to report more detailed data about the true costs of providing services to airlines and travellers.
One point of contention is a lack of consistent or disaggregated data, while other revenue sources are not reported at all. Sydney airport, for example, where the privately owned train stations at each terminal charge an access fee of more than $15 per adult as well as the cost of a ticket on the Sydney train network, does not report revenues from trains.
The ACCC warned that without requiring more data it was unclear if the airports were capitalising on their natural monopoly, a point also raised by major airlines.
In the report, which covers the financial year 2021-22 and select data from 2022-23, the ACCC found profit margins at major airports were “well below” pre-pandemic levels.
Melbourne airport’s operating profit margin was 7.9%, up by 41% on the previous year, Sydney’s was 11%, down 8% on the previous year. Brisbane airport’s profit margin was 32%, up 21% on the previous year, while Perth’s was the largest at 42%, up 31% on the previous year.
Aeronautical operations – which takes in the fees airports charge airlines for using their services – accounted for the largest source of revenue for each airport. However, all four airports lost money from these operations, as the country still suffered from a closed international border and movement restrictions towards the end of 2021.
Melbourne airport’s aeronautical profit margin was -38.8%, Sydney’s was -27.4%, Brisbane’s was -5.9% and Perth’s was -0.05%.
Passenger numbers in 2021-22 were still below the 2018-19 baseline. Perth reported the strongest performance, with domestic passengers at 68% and international passengers at 11% of pre-Covid levels, helped partly by the continuation of fly-in, fly-out mining workers despite movement restrictions. In the first three quarters of 2022-23, Perth’s domestic passenger numbers were at 107% of 2018-19.
Domestic passenger numbers at Sydney, Brisbane and Melbourne in 2021-22 sat between 40% and 55% of the baseline, and in the first three quarters of 2022-23, rose to between 85% and 90%.
However, international passenger numbers across all four airports in the first three quarters of 2022-23 remained between 60% and 70% of pre-pandemic levels.
Car parking remained a huge source of income – between 7% and 15% of total revenue – for airports throughout the otherwise loss-making period.
Profit margins for car parking services increased for all airports in 2021-22, to 33% at Sydney airport, 40% at Melbourne and 58% at Brisbane and Perth.
Parking generated $76m in revenue for Melbourne airport – 15% of the airport’s total revenue – and $64m for Brisbane, $56.3m for Sydney and $53.8m for Perth.
Taking into account the number of parking spots, each space at Perth airport generated $1,612 in the year, while in Sydney each space generated $1,593 and in Melbourne $1,143. Brisbane did not provide that level of data.
Costs to park a car for less than one hour in June 2022 were most expensive at Brisbane, where 30-60 minutes cost $20, compared with $15.60 at Perth, $15 in Melbourne and $9.90 in Sydney. Long-term parking costs for seven days were most expensive at Sydney at $159.90, compared with Perth at $142, Brisbane at $101 and Melbourne at $84. The ACCC noted parking discounts were available by pre-booking.
Landside access services, including fees from taxis and transport operators to the airport, as well as commercial revenues from retail services and hotels at the airport, also helped the major airports stay profitable.
Airlines for Australia and New Zealand, an industry group representing airlines including Qantas, Jetstar, Virgin, Air New Zealand and Rex, called for airports to agree to an industry code of conduct and pricing principles, claiming current laws allow airports to exercise “monopoly powers”.
