Australia's major airports face renewed scrutiny over sky-high rates, writes Clive Dorman.
Australia's consumer watchdog is continuing to press the federal government to rein in airport monopolies in the nation's capitals after reporting sky-high rates for services such as car parking and the fee paid by airlines to airports for each passenger.
The chairman of the Australian Competition and Consumer Commission, Rod Sims, has signalled he will take an aggressive line against monopolies and wants the government to amend the Airports Act to give the ACCC power to intervene in negotiations between airports and their users.
"The airports' revenues from aeronautical services continue to increase by more than operating expenses," Sims says in the commission's latest report on airports, released on March 30. "[But] monitoring does not restrict them from increasing prices, or degrading service standards, to earn monopoly profits."
The report shows that car parking is a money-spinner for airports. In total earnings last year of $1.1 billion reported by the airports in the five main capitals - Sydney, Brisbane, Melbourne, Adelaide and Perth - more than 70¢ in every dollar charged for car parking was pure profit.
The airport in Melbourne, the only east coast capital without an airport train, is the biggest earner, with more than 20 per cent of its total revenue coming from parking. Melbourne has 22,412 parking spaces, compared with 12,271 at Sydney. However, 3000 more spaces are on the way in Sydney: 2000 at the international terminal and 1000 at the domestic terminal.
The five airports also charge buses, hire cars and taxis access fees of up to $3 a passenger.
Sydney Airport levies airlines the highest aeronautical charge, of $14.46 a domestic passenger, yet it has the second-lowest rating of service by users: 3.66 out of a possible five. The airlines gave Sydney Airport an even lower score: 3.15. Brisbane is rated by users as the best airport in the country, with a score of 4.2.
Only Perth recorded a poorer airline rating than Sydney, and that is unlikely to change as Perth embarks on building a $1 billion terminal, which will result in higher passenger charges.
Adelaide is the second-dearest airport for domestic airlines, with a charge of $11.64 a head. That's a big reason why Tiger Airways no longer flies to the South Australian capital, a former Tiger crew base, according to its new Australian chief executive, Andrew David, who is rebuilding the airline after last year's grounding. Instead, Tiger announced last month it would base three aircraft and their crews in Sydney, Australia's biggest market for air travel.
The ACCC, meanwhile, is engaged in a bureaucratic battle with another federal government agency, the Productivity Commission, which has taken the side of the airports against airlines and consumers.
In a report on airports, released last month, the Productivity Commission argues that Australian airport charges aren't high by world standards. "Aeronautical charges do not point to the inappropriate exercise of market power," the report says.