Sydney and Melbourne Airports have raised the ire of the Australian Competition and Consumer Commission for the possibility of charging excessively high prices due to their monopoly status as international airports in each state.
The ACCC submits an annual Airport monitoring report for Adelaide, Brisbane, Melbourne, Perth and Sydney airports to parliament due to concerns that the airports might use their monopoly position in delivering airport services and facilities to charge excessively high prices. The ACCC monitors the airports’ prices, costs, profits, investment levels and quality of service as well as airport car parking prices, costs and profits due to concerns that the airports are in a position to set car parking prices for consumers at monopoly levels.
“This year’s report raises concerns about monopoly pricing at Sydney and Melbourne airports,” ACCC chairman Graeme Samuel said.
“At Sydney Airport, the airlines have identified unsatisfactory levels of service over several years, particularly at the international terminal.”
“Sydney Airport has recently undertaken an upgrade of its international terminal. While passengers appear to be relatively satisfied with the outcome, the airlines have not reported any significant improvement in the service they receive. Indeed, there appears to have been no improvements to some services that the airlines rely on—such as the number of check-in desks.”
“The situation at Sydney Airport is in contrast to the other monitored airports, which appear to have been more responsive to the airlines’ needs.”
“The airport’s monopoly position, the airlines’ ongoing dissatisfaction with the service they receive, as well as increasing prices and profits over time, all point to Sydney Airport earning monopoly profits from the services it provides to airlines.”
“At Melbourne Airport, it is car parking that is of particular concern.”
“Melbourne Airport appears to have reduced the ability of off-airport parking and private bus operators to compete with the airport’s own car parking services. For example, the information available suggests that Melbourne Airport imposes excessive access levies and controls the available space for those operators. This affects those operators’ own prices, convenience and, therefore, attractiveness to consumers.”
“By reducing the ability of alternatives to compete, Melbourne Airport can increase demand for its own car parking services, charge higher prices to consumers and, therefore, earn monopoly profits.”
“The issues raised by the ACCC in this report highlight the importance of the current review by the Productivity Commission into the economic regulation of airport services,” Mr Samuel said.