Sydney Airport’s half-year results are out, and the company revealed it made $77.1 million in parking and ground transport revenue in the six months to June.
Meanwhile, 21 million passengers came through, giving an average of $3.68 for every single passenger through the doors of the airport everyone loves to hate.
The revenue includes the airport’s infamous parking fees — which kick in at $9 for 30 minutes and $18.50 for an hour — as well as the $4 taxi booking fee.
Astonishingly, the revenue from parking and transport is a little under half of what people spend in the airport’s shops. It’s even more impressive when you consider that in its last annual report the company said 38.7% of people driving to the T1 International terminal and 43% of people driving to the T2/T3 Domestic precinct managed to avail of the tight free parking facilities.
Here’s the revenue breakdown:
The national consumer watchdog, the ACCC, has noted the pricing power of the major airports on transport services. Earlier this year it said Sydney Airport’s profit margins on had increased 1.5 percentage points to an eye-watering 73.1%.
“The returns that the airports get on car parking show that they do not face significant competitive constraints when setting prices,” said ACCC chairman Rod Sims.
The ACCC also noted more people were availing of discounts by booking online for car parking, particularly for long-term parking. The company says online bookings have continued to grow over the first six months of this year.
“You can make big savings on drive-up parking fees when you book your parking online,” the company says on its online bookings site. “The earlier you book ahead, the more you can save – it’s easy-peasy!”
The airport reported another strong period of growth, with an especially strong contribution from international passengers. Its profit levels grew significantly, with EBITDA up 7.7% on passenger growth of 3.6%, showing how effective it is at wringing money out of people who come through the terminal.
The strong growth in international visitors clearly helps. Inbound tourism was up 10% for the six-month period, with the strongest growth coming from the Vietnam and Phillipines markets. International passengers spend more time in the airport and are naturally inclined to buy more retail goods as gifts and memorabilia.
Retail revenue was up a whopping 14.3% thanks to improved duty free stores and new food and beverage offerings.
The company continues to invest, saying its capital expenditure program over the past year had resulted in $400 million in facilities improvements, with another $250 million more coming between now and the end of the year.
Though the revenue from parking and ground transport increased 2.2%, it was a relative underperformer compared to other sources of revenue like retail and fees from airlines.
Part of this was due to a “modal shift to train”, the company said, as well as the Uber effect in “increased ride sharing and limousine services”, which were legalised in the state in 2015.
It might not be loved by all of its customers but it sure is an effective business.
A short time ago shares in Sydney Airport were trading up 3% at $7.06.