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Operating profits at Australia's four largest airports rose by a combined $693 million in FY24 as international passenger growth pushed aeronautical revenue higher, and profit margins from carparks were above 60 per cent at each location.
The latest Airport Monitoring Report published by the Australian Competition and Consumer Commission (ACCC) shows the combined operating profit at Sydney, Melbourne, Brisbane and Perth airports climbed 38 per cent to reach $2.53 billion, out of total revenue of $4.8 billion.
Despite passenger numbers being below pre-pandemic levels, with the exception of Perth which had more people moving through its terminals, each airport reported its highest-ever revenues from aeronautical services paid by airlines to use facilities such as runways and terminals.
The total revenue and profit figures were inflated somewhat due to back-payments from FY23 at Sydney Airport, which accounted for more than half of the $1 billion uplift in revenue from aeronautical activities across the four airports.
"The increase in aeronautical revenues in 2023-24 was driven in large part by the continued recovery in international passenger numbers, which rose by 32.1 per cent at the four airports monitored in our report," says ACCC Commissioner Anna Brakey said.
"Domestic passenger numbers also grew by 6.7 per cent."
Even though Perth's total passenger numbers were up 10.9 per cent on pre-pandemic levels, primarily driven by domestic travellers, it was the only airport to report a decrease in aeronautical operating profit which was down 29 per cent due to increases in operating costs, particularly relating to security.
Overall, 114.6 million passengers moved through the four airports - a figure that is down 4.7 per cent on FY19 as the last full financial year before the COVID-19 pandemic.
Aside from Sydney's significant revenue growth of 42.4 per cent to reach $1.9 billion, Brisbane saw the biggest spike in revenue of 13.9 per cent to hit $979.1 million, followed by Melbourne at 13 per cent growth to $1.2 billion.
"Sydney Airport was once again clearly the most profitable of the four major airports for aeronautical services in 2023-24, both in aggregate and on a per-passenger basis," Brakey said.
It is estimated that Sydney Airport made $29.36 per passenger, which is well ahead of Brisbane ($21.33), Perth ($18.57) and Melbourne ($17.88), but Brisbane Airport makes the highest profit per carpark space.
Brisbane's car parking operating profit of $113.4 million represents a profit margin of 76.6 per cent, compared to 67.2 per cent for Perth, and 63.6 per cent for both Sydney and Melbourne.
Depending on the airport, the share of revenue made from carparks ranges from 7.9 to 15.8 per cent. But in the cases of Brisbane and Melbourne, carparks brought in more than 50 cents for every dollar of profit made from aeronautical services.
“Car parking remains a very profitable business for the monitored airports as they report strong demand for parking,” Brakey said.
“Brisbane Airport made an operating profit of 76.6 cents for every dollar of revenue it collected from car parking.”
Sydney Airport was the most expensive for 30 to 60 minute parking and parking for up to 24 hours at the terminal, while Melbourne Airport was the cheapest in both categories.
Revenues from landside transport access services, such as rideshare operators, taxis and buses, grew by 18 per cent to $69.6 million, as vehicle numbers rebounded. All four airports continued to report a growth in rideshare services.
The report also notes that all four airports maintained an average overall rating of ‘good’ for the quality of service, driven mostly by high ratings from passengers as ratings by airlines fell, giving the facilities a "satisfactory" result.
The most common airline concerns related to aircraft parking facilities, baggage facilities, common user check-in facilities, aerobridges and public amenities.
“The airports all maintained their ‘good’ rating for quality of service, which is based on surveys of passengers and airlines, as well as objective measures such as the number of check-in kiosks per passenger,” Brakey said.
“However, the falling satisfaction from airlines indicates the airports have some work to do.”
Professor Graeme Samuel AC, chairman of industry body Airlines for Australia & New Zealand, lambasted the consumer watchdog, claiming the current regulatory regime for airports based on monitoring alone "does little more than shine a light on the challenges of dealing with monopoly airports".
"The ACCC’s findings hardly come as a surprise to airlines and passengers who pay exorbitant prices for parking and food at airports every time they fly," Samuel said.
"Airports have their hands in passengers’ pockets from the moment they enter airport property – including for rental cars, taxi and rideshare surcharges, and in particular car parking.
"The most recent ACCC data shows that the major four airports reported profit margins above 60 per cent for the second year in a row for car parking – these are super profits, well above those recorded by airlines, banks, or supermarkets."
He said that airport charges, generally the second- or third-largest expense for an airline, were a constraint on airlines which were in fierce competition with each other and focused on "ensuring that air travel remains affordable".
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