Airport carparking rip-off exposed in ACCC report highlighting obscene profit margins

Exorbitant carpark charges are generating massive profits for Australia’s major gateways, as airlines hit out at ‘monopoly airports’.

Profits have grown faster than the recovery in capacity at Australia’s major city airports according to the competition watchdog, which identified Brisbane as the country’s most profitable car park.

Although carparking fees were highest in Sydney at $23.60 for up to an hour, Brisbane Airport made the most money from its 19,852 parking spaces, banking $113.4m in the 2024 financial year.

The figure represented a profit margin of 76.6 per cent, with each bay generating revenue of $7460, or $5714 in profit for its owners.

Melbourne had the second most profitable carpark earning $108.1m, followed by Sydney’s$95.6m and Perth on $70.7m.

At both Brisbane and Melbourne, the number of carparking spaces were reduced slightly from 2023 to 2024, while Perth and Sydney added more bays.

Melbourne is the cheapest with drive-up prices from $15 for between 30 minutes and an hour, followed by Perth on $16.80 and then Brisbane at $23, just behind Sydney ($23.60).

The figures were published by the Australian Competition and Consumer Commission whose annual airport monitoring report found aeronautical revenues collected directly from airlines climbed to new highs last year, even as passenger numbers lagged behind pre-Covid levels.

ACCC commissioner Anna Brakey said a 24.3 per cent increase in aeronautical revenue to a cumulative $2.6bn was driven largely by the faster-paced recovery of international passenger numbers.

Airports charge a higher per-passenger fee for international travellers as opposed to domestic because of the greater level of service required.

The report showed international travellers grew by 32.1 per cent across all four airports, while domestic passengers increased by a more modest 6.7 per cent.

“Sydney Airport was once again the most profitable of the four major airports for aeronautical services in 2023-24, both in aggregate and on a per-passenger basis,” said Ms Brakey.

The report did note Sydney’s total aeronautical revenue of $1.2bn was inflated by back-payments received from airlines for the previous financial year.

On carparking, Ms Brakey noted the service was “very profitable” for airports and in particular Brisbane.

“To save money, motorists are encouraged to book online, if possible, instead of paying drive-up rates and should consider using free waiting zones at the airports,” she said.

The report noted airports were reinvesting considerable revenue into new and improved facilities, with new runways planned for Melbourne and Perth, new terminals for Perth and Brisbane and upgrades to terminals in Brisbane, Sydney and Melbourne.

Ms Brakey said the “significant capital works” should help increase capacity at the airports and lead to more flight options for travellers.

Sydney Airport carpark charges the highest per hour rate of any major gateway. Picture: Christian Gilles

The Australian Airports Association noted all the major gateways had achieved a “good” rating from the ACCC as they worked to deliver the “best experience possible” for travellers.

“Australia’s top four airports are set to invest around $19bn in critical infrastructure upgrades over the next decade to ensure both air passengers and airlines have access to world class facilities,” said the industry group’s chief executive Simon Westaway.

Airlines were less impressed with the ACCC’s findings, saying they would “hardly come as a surprise to passengers who paid exorbitant prices for parking and food every time they fly”.

Former competition regulator Graeme Samuel, who now represents Airlines for Australia and New Zealand comprising Qantas, Jetstar, Virgin, Rex and Air New Zealand, said airports had their hands in passengers’ pockets.

“Airlines, unlike monopoly airports, are in fierce competition with each other and are focused on ensuring that air travel remains affordable,” said Professor Samuel.

“A constraint on this is airport charges which are generally the second or third largest expense for an airline.”

He said the report only served to highlight the inadequacy of the current regulatory regime for airports.

“We don’t consider that monitoring alone can be effective in constraining monopoly airports from extracting every available dollar from airline passengers,” Professor Samuel said.

“As the ACCC have stated, without appropriate regulation an airport can exercise its market power to earn monopoly profit to the detriment of airport users and the broader Australian economy.”

Airlines were also concerned at the huge sum of capital expenditure being undertaken by airports on both sides of the Tasman, questioning whether it amounted to “inefficient gold-plated infrastructure”.

Professor Samuel said airlines did not object to investment when it was “fit-for-purpose and consistent with the needs of customers”.

“It is essential for airports to undertake comprehensive consultation with airlines, to ensure that the investment is efficient, properly focused on customer needs, and made at the right time so that airlines and their passengers aren’t paying unnecessarily high costs,” he said.