Australia's major airports see record revenues despite lagging passenger recovery: ACCC report

The four airports recorded passenger numbers of 114.6 million in FY2023/2024, an improvement of 13.7% YoY. However, compared to the last year before the pandemic that halted international traffic globally, these numbers were still down by 4.7%.

The Commission noted that international traffic experienced strong growth during this fiscal period, with international passenger numbers increasing by 32.1% YoY to reach 36.9 million.

In terms of operating profit--earnings before interest, taxes, and amortization (EBITA)--the quartet ended the period with an AUD1 billion ($635 million) operating profit. According to the ACCC, a combination of record revenues and stable operating costs resulted in a metric improvement of75% YoY.

However, it was noted that Sydney Airport’s aeronautical revenues and operating profit were inflated by back payments by airlines for services provided in FY2022/2023.

“The agreements started on 1 July 2022 but the terms were not agreed to until the 2023–24 financial year. That is Sydney Airport’s revenue and profit in 2023–24 is inflated due to back-payments from 2022 to23 while its22–23 revenues and profits are simultaneously deflated. ”

Growing aeronautical revenues per passenger

The ACCC pointed out that while passenger numbers were below FY2018/2019 levels at all four airports; aeronautical revenue per passenger increased at three out of four airports YoY: Brisbane (4.6% YoY), Melbourne (4.2% YoY), and Sydney (20.6%), which was inflated due to prior fiscal year’s revenues being recognized in FY2023/2024. Perth was the only airport whose aeronautical revenue per passenger declined by8 .6 %Yo Y .

Due to “increases in operating costs particularly those relating to security ” Perth airport’s aeronautical profit margin stood at23 .6 %, down11 %Yo Y . Meanwhile other three airports improved their margins compared toFY2022 /23 .

“TheACCC reiterates its view thatAustralian Government should mandate useof aeronautical pricing principlesin airport negotiationswith airlinesand introduce appropriate enforcement mechanismfor effective recourse againsttheir misuse ” saidAC CC .

However if left uncheckedby competitionor regulationan airport could earn monopoly profitsnegatively affectingpassengersairlinesandby extensionAustralian economyhe added“Price monitoringwhichis lighter-handed measurethan price regulationcan provide transparencyover airportsperformanceHowever monitoringis limitedin abilityto address behaviordetrimental consumers”

Investing almostAUD1 billioninto aeronautical facilitiesNeverthelessAC CC saidwhile quartet invested little during pandemicthey have recommenced major investmentsnew facilitiesInFY20-23 /24four investedAUD985 .1 million$625 .5 majority MelbourneMajor projects underway announced include runwaysMelbournePerth terminalsPerthBrisbane upgradesBrisbaneSydney openingWesternSydneyAccordingWesternSydneyWSI track open domesticinternational cargo operations late20-26 fall intoFY20-26 /27Australia

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