ACCC slams price gouging at Sydney Airport

FOR the fourth year in a row Sydney Airport has been rated the country's worst large airport, charging the highest average prices per passenger, a report from the competition watchdog reveals.

The annual report on airport performance from the Australian Competition and Consumer Commission is sharply critical of price gouging at Sydney's privately-operated airport, ranking it fifth out of five airports.

"This year's report has found the performance of Sydney Airport to be of greatest concern," the commission's chairman, Graeme Samuel, said in a statement. "The indications are that Sydney Airport has increased profits by permitting service quality to fall below that which the airlines reasonably expect."

Mr Samuel also said users, including passengers and airlines, had rated the airport last for the fourth consecutive year, behind Brisbane, Adelaide, Perth and Melbourne.

The ACCC accuses the airport of price gouging with car parking rates. Noting the price of short-term parking has almost doubled in the past financial year, from $28 to $50 for four hours, the report said: "Car parking revenue was considerably above operating expenses over the whole reporting period."

Slamming investment in the international terminal as "slow", the commission also noted that revenue and profit margins had risen even though it was the only major airport in Australia to record a drop in passenger numbers. "Sydney Airport also recorded the highest average prices at $13.63 per passenger, compared to the lowest of $7.96 at Melbourne Airport," the report found.

In a statement, the airport, which is backed by Macquarie Bank, insisted the commission's report was "out of date", and pointed to a $500 million investment in renovating the international terminal. The upgrade has included new waiting areas, shops and food outlets on either side of the Customs barrier.

Earlier this week, Sydney Airport management, anticipating a poor rating from the commission, released a survey that said passengers "are appreciating the improved travel experience that is being produced by the ongoing upgrade". MAp Airports (formerly known as Macquarie Airports) and other Macquarie Bank-related entities have an 83 per cent stake in the country's largest airport. Last year shareholders were forced to invest $870 million in the airport to reduce its huge debt burden. It is still carrying $4.5 billion in net debt.

The commission's report also accuses the airport of abusing its monopoly power, saying: "The monitoring results indicate that Sydney Airport might be earning monopoly rents from aeronautical services."

The Board of Airline Representatives of Australia, on behalf of international airlines flying to and from Australia, including Virgin Blue and Qantas, said the regulator's report reflected the level of concern the industry had had about the airport for a number of years.

"Airlines haven't been happy with the performance of Sydney Airport for some time. BARA, through its airline members, hears lots of complaints about the way Sydney Airport is operated and managed," the board's executive director, Warren Bennett, said yesterday.