Australia’s airports are delivering healthy margins to their operators, and the best profit margins are made not made from planes, but in the car park where a single parking bay came earn as much as $6000 a year.
According to consumer watchdog the ACCC (Australian Competition and Consumer Commission), which monitors charges at the four biggest airports, Sydney’s Kingsford Smith had the highest profit margin for its aeronautical services at 46.7% last financial year, down 3.4 percentage points.
But its profit margins on parking increased 1.5 percentage points to 73.1%. At the international terminal, the base charge is $9 for 15 minutes and the same amount gets 30 minutes at the domestic terminal.
“The returns that the airports get on car parking show that they do not face significant competitive constraints when setting prices,” says ACCC chairman Rod Sims.
However, the ACCC found that more people are taking advantage of substantial discounts when booking online for car parking, particularly for long-term parking.
“Booking online can deliver the best value car parking deals. In comparison, those who do not pre-book must pay drive-up prices which can be double that of online prices,” Sims said.
Melbourne Airport was slightly ahead of Sydney in terms of total revenue from parking at $135.3 million compared to $133.8 million.
But on returns per car parking space, Sydney pulled in $6138, while Melbourne was about half that at $3084.
Here are the numbers compared each capital city airport:
The number of passengers at Sydney Airport grew 4.8% during the year to 41.1 million.
Sydney Airport collects the highest revenue per passenger at $17.27, growing 3.9% last year. Overall, Aeronautical operations produced a profit of $331.5 million on revenues of $709.8 million.
Perth Airport’s revenue per passenger grew 13% in real terms to $14.48 and Melbourne Airport by 9.1% to $11.58. Brisbane Airport’s revenue per passenger fell by 1.2% to $12.25.
The ACCC says price increases over the last decade have resulted in significant additional payments by the airlines.
The airports collected an extra $1.57 billion in real terms from airlines than if they had instead increased prices at the rate of the Consumer Price Index.
The profit margins and revenue per passenger:
Qantas, Virgin Australia and Regional Express have been calling for increased regulation to deal with the trend of rising aeronautical charges.
Per passenger, Brisbane’s profit has grown 138% in real terms over the decade to $5.50 from $2.31. Perth is up 29%, Sydney 18% and Melbourne 10%.
At the same time, says the ACCC, there was no significant change in the overall quality of service ratings at the airports.
“They have come at a time when most airfares have been falling and therefore airport charges are likely to have become a more significant cost item for airlines,” says the ACCC.
Average best discount airfares have dropped 36% in real terms and restricted economy airfares are 17% lower since July 2006.
The passenger and profit numbers for each airport monitored by the ACCC:
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