24/05/2018 - 15:22

Report calls into question airport monopoly

24/05/2018 - 15:22

Bookmark

Save articles for future reference.

Perth Airport’s revenue per passenger has increased more than any other major airport in Australia over the past decade despite the average airfare declining more than 50 per cent, according to a new report out today.

Report calls into question airport monopoly
Perth’s revenue per passenger has risen nearly 60 per cent to $15.79 since 2008.

Perth Airport’s revenue per passenger has increased more than any other major airport in Australia over the past decade despite the average airfare declining more than 50 per cent, according to a new report out today.

The report by Airlines for Australia and New Zealand reveals Perth’s revenue per passenger has risen nearly 60 per cent to $15.79 since 2008.

That compares to a 52 per cent drop in the average airfare at Perth, down to $383.8.

The report calls into question monopoly powers being exerted by Australian airports, with A4ANZ chairman Graeme Samuel saying the privatisation of airports had not achieved its aims.

“Privatisation of Australia’s airports promised to offer many benefits: more efficient management of assets, investment and downward pressure on prices,” he said

“Yet, in the absence of an effective regulatory regime, airport privatisation has ultimately resulted in higher costs for both airlines and passengers.”

The four major airports are collecting over 25 per cent more revenue for every passenger today than they were 10 years ago, according to the report.

Over the same period passenger numbers have increased by nearly 20 per cent.

But the report highlights concerns regarding lack of consultation and working in partnership between Australian airports and airlines.

"This can lead to excessive and unnecessary investment at an airport, instead of building infrastructure that is fit-for-purpose," the report says.

The report calls for a better regulatory and pricing environment for airports.

Mr Samuels said A4ANZ was not a lone voice in suggesting regulatory changes for airports was required.

“Our report makes it clear that it’s time for Australia to catch up and ensure our regulatory system can do what it is supposed to, which is to protect consumers from monopolies,” he said.

“No one is suggesting the airports don’t deserve to make a decent profit.

“But the current levels of profit are excessive, and it’s ultimately being paid for by the travelling public.”

The report by Airlines for Australia and New Zealand reveals Perth’s revenue per passenger has risen nearly 60 per cent to $15.79 since 2008.

That compares to a 52 per cent drop in the average airfare at Perth, down to $383.8.

The report calls into question monopoly powers being exerted by Australian airports, with A4ANZ chairman Graeme Samuel saying the privatisation of airports had not achieved its aims.

“Privatisation of Australia’s airports promised to offer many benefits: more efficient management of assets, investment and downward pressure on prices,” he said

“Yet, in the absence of an effective regulatory regime, airport privatisation has ultimately resulted in higher costs for both airlines and passengers.”

The four major airports are collecting over 25 per cent more revenue for every passenger today than they were 10 years ago, according to the report.

Over the same period passenger numbers have increased by nearly 20 per cent.

But the report highlights concerns regarding lack of consultation and working in partnership between Australian airports and airlines.

"This can lead to excessive and unnecessary investment at an airport, instead of building infrastructure that is fit-for-purpose," the report says.

The report calls for a better regulatory and pricing environment for airports.

Mr Samuels said A4ANZ was not a lone voice in suggesting regulatory changes for airports was required.

“Our report makes it clear that it’s time for Australia to catch up and ensure our regulatory system can do what it is supposed to, which is to protect consumers from monopolies,” he said.

“No one is suggesting the airports don’t deserve to make a decent profit.

“But the current levels of profit are excessive, and it’s ultimately being paid for by the travelling public.”

A Perth Airport spokesperson said the privatisation had delivered a number of benefits.

"Privatisation of Perth Airport has delivered more airlines, more destinations, more competition, lower airfares and more tourists for Western Australia," she said.

"In addition to that, there has been $1 billion of private funds invested in major upgrades of the airport which benefits all Western Australians."

The spokesperson said that the latest report from the ACCC revealed Perth had become the highest rated airport.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options