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Airports provide lessons in revenue diversity

Adam Zuchetti
Adam Zuchetti
26 April 2018 1 minute readShare
Airport, airplane

While the primary purpose of airports is to provide a gateway for air travellers, new figures demonstrate how lucrative other revenue streams have been for Australia’s largest airports.

The ACCC looked at the revenues of Brisbane, Melbourne, Perth and Sydney airports from their aeronautical operations, and compared them with revenues from on-site car parking.

Unsurprisingly to anyone who has parked at one of the four airports recently, they are raking in millions of dollars each year from car parking over and above their core activities.

Sydney Airport led the charge, making a $97 million profit on parking alone. Melbourne made $86.7 million, Brisbane $63.7 million and Perth $33 million.

Most interestingly, though, is how this compares with their core activity.

Despite making the highest financial returns, Sydney Airport has the lowest comparison – its profits from car parking are just 26.9 per cent of its profits from aeronautical operations.

All three of the other airports rank significantly higher – Perth Airport parking earnings are 41.9 per cent of its earnings from core activities. Brisbane and Melbourne airports are even higher, at 46.8 per cent and 47.6 per cent respectively.

The figures demonstrate how businesses can generate substantial additional revenues and profits by offering, and charging for, supporting services that are not part of the core function.

However, the ACCC took home a different lesson from the figures, suggesting the airports are price gouging thanks to “little competitive pressure and no price regulation”.

“We remain concerned that the current regulatory regime which is limited to monitoring the covered airports, doesn’t constrain the market power of four of Australia’s major airports. Unconstrained monopolies often have an incentive and ability to charge excessive prices while lacking strong incentives to improve services,” said ACCC chair Rod Sims.

According to Mr Sims, travellers concerned about the cost of airport parking should plan ahead to reduce their bills.

“Booking online could save you around 20 per cent or more on long-term parking at the airport, while choosing an independent carpark near the airport could save you about 40 per cent,” he said.

Mr Sims said that in Melbourne, there are 15 independent carparks operating close to the airport. Brisbane, Perth and Sydney have a smaller number.

Providing users with a shuttle bus to and from the terminals, he suggested, can be more cost-effective than the parking offered by the airports themselves.

Airports provide lessons in revenue diversity
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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