The Australian Competition and Consumer Commission today issued its annual airport monitoring report.

Under the monitoring arrangements as set out by the Australian Government, the ACCC is responsible for reporting annually on quality of service relating to the supply of aeronautical services and facilities at Adelaide, Brisbane, Melbourne, Perth and Sydney airports, as well as aeronautical prices, costs and profits.

The information in the monitoring report provides a transparency to airport operations which assists users to assess industry performance. However, the ACCC's role does not involve setting or approving increases in prices, with the exception of regional air services provided by Sydney airport.

"In 2007–08, airport users, including passengers, airlines and government agencies, appeared to have a lower level of satisfaction with the airports' overall quality of service," ACCC Chairman, Mr Graeme Samuel, said. "While users at Brisbane airport remained the most satisfied with overall quality, Sydney airport was ranked last amongst the airports for the third consecutive year.

"This year's report shows that passenger numbers continued to increase at the monitored airports in 2007–08 and, in general, charges by airports to the airlines also increased. This has contributed to an increase in revenue and profits reported at all the airports," Mr Samuel, said.

"Airport car parking also had a greater focus in this year's report. The results showed that both average prices charged and car parking revenue increased significantly during the four years prior to 2007–08. Price increases slowed however during 2007–08."

Quality of service

The ACCC's role in monitoring quality of service is intended to provide information that would not otherwise be available in relation to airport quality and to provide findings on whether airports have met the expectations of users. The quality of service results reflect, for example, the experiences of passengers waiting in the check-in lines at airport terminals and passing through security control points.

It should be noted that the ACCC's measurement of quality of service relates only to those terminals that are owned and run by the airport operators. Some of the domestic terminals at the airports are leased and operated by airlines and are not subject to monitoring. The Qantas domestic terminals in Melbourne, Perth and Sydney airports for example are not included in the monitoring, and most of the domestic terminal in Brisbane airport is also excluded (where it is leased to Qantas and Virgin Blue). All international terminals are, however, included in the quality of service monitoring.

For the third year in a row, users of the monitored airports have, on average, reported a decline in the quality of services and facilities provided by the airports. At the same time, passenger numbers have continued to increase at all of the monitored airports.

Overall ranking of quality of service for the monitored airports.

Rank

2003–04

2004–05

2005–06

2006–07

2007–08

1st

Brisbane

Brisbane

Brisbane

Brisbane

Brisbane

2nd

Melbourne

Perth

Adelaide

Adelaide

Adelaide

3rd

Sydney

Sydney

Perth

Perth

Perth

4th

Perth

Melbourne

Melbourne

Melbourne

Melbourne

5th

Adelaide

Adelaide

Sydney

Sydney

Sydney

As set out above, passengers, airlines and government agencies have rated the quality of service at Brisbane airport the highest amongst the monitored airports for the fifth year in a row. Adelaide airport remained in second place in 2007–08 following significant improvements after the opening of its new terminal in 2005–06.

Airport car parking

On 7 April 2008, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, the Hon. Chris Bowen, MP, directed the ACCC to formally monitor prices, costs and profits relating to the supply of car parking at the five monitored airports.

As a result, there was a new focus on airport car parking in the 2007–08 airport monitoring report, though the ACCC's role does not extend to setting or approving airport car parking prices or conditions of service.

The report discusses factors that may affect the price of car parking at airports. They include airports being in a position to set higher car parking prices because they are able to influence the costs of alternatives to on-airport car parking (including off-airport parking, cars, taxis, and bus and train services). Although not conclusive, the ACCC considers that some results are consistent with airports having a monopoly position.

Combined total car parking revenue for the monitored airports was $244 million in 2007–08 compared to total airport revenue of $2.2 billion. In other words, car parking revenue accounted for approximately 11 per cent of the airports' total revenue in 2007–08.

Airport car parking provided the greatest contribution towards total revenue at Melbourne airport where it was around 21 per cent as a share of total revenue in 2007–08. It was less significant at Sydney airport, which had the lowest revenue share at 7 per cent for the same period.

Charges for car parking at the airports were roughly constant or increased slightly on average in 2007–08. Prices appear to have increased more significantly over the four years prior to 2007–08.

Car parking charges as at 30 June 2008, in order of quality rating.

Airport

Short-term car park
1 hour

Short-term car park
24 hours

Long-term car park
1 day

Melbourne

$12

$45

$25

Perth

$5.20

$25

$17

Adelaide

$4

$30

$20

Brisbane

$10

$45

$25

Sydney

$14

$46

$24

(Note: Brisbane airport and Sydney airport short-term car park charges for 24 hours are based on the domestic car park at each airport).

In 2007–08, overall ratings for quality of airport car parking increased slightly for Adelaide, Melbourne and Sydney airports, while ratings decreased significantly for Brisbane and Perth airports. In the same period, travellers at Melbourne airport were reported to have the highest level of satisfaction with car parking, while Sydney airport car parking was ranked lowest.

Prices, costs and profits

The ACCC is responsible for annual reporting on prices, costs and profits at the five monitored airports for services provided to airlines (aeronautical services).

Passenger numbers increased at all of the monitored airports in 2007–08. Perth airport experienced the highest percentage growth in passenger numbers, with throughput increasing by around 13.5 per cent or 1.1 million passengers. However, Melbourne and Sydney airports had the highest increase in absolute numbers with approximately 1.8 million additional passengers passing through each of the two airports in 2007–08.

Key indicators for the monitored airports for 2007–08.

Airport

Passenger numbers

(million)

Increase in passenger numbers

(%)

Aeronautical revenue per passenger

($)

Change in aeronautical revenue per passenger

(%)

Total aeronautical revenue

($million)

Change in total aeronautical revenue

(%)

Adelaide

6.8

7.6

11.41

3.5

77

11.5

Brisbane

18.8

5.3

7.54

26.9

142

33.6

Melbourne

24.3

7.8

7.73

8.9

187

17.4

Perth

9.2

13.5

8.11

-0.2

75

13.2

Sydney

33.2

5.7

12.97

8.5

431

14.7

At the same time, charges to the airlines for the use of the airports' facilities and services have, in general, increased on a per passenger basis. Airlines at Brisbane airport were faced with the highest increases, as the airport reported a 26.9 per cent increase in revenue received on a per passenger basis. This was partly the result of an agreement with airlines to increase prices to fund new investment.

The increases at Brisbane airport are also partly attributable to a change in definition of aeronautical charges in 2007–08, which meant that some charges that were previously excluded are now included. Notwithstanding these increases, airlines still paid the lowest average prices per passenger at Brisbane airport at $7.54. Sydney airport at $12.97 had the highest average charges per passenger in 2007–08.

"Interestingly, the financial performance of the airports does not appear to be strongly related to the quality of service they provide. For example, users at Brisbane airport remained the most satisfied in 2007–08 whereas Sydney airport was ranked last amongst the airports for the third consecutive year," Mr Samuel said.