Summary
- The Airport Monitoring Report of four main airports shows they made solid profits in 2022-23, with a 91% increase in aeronautical revenue.
- Domestic travel led the recovery, but airlines held back capacity due to cancellations and delays, impacting passenger numbers.
- Car parking at the airports was a lucrative business, earning a collective operating profit of AU$337 million in 2022-23.
A fierce debate rages in Auckland between the airport and its two major customers, Air New Zealand and Qantas, over the cost of redeveloping the domestic terminal and who is footing the bill. A report has been released showing that the four main Australian airports made decent profits in 2022-23, which might grab the attention of Qantas, Virgin Australia, and Rex when airport charges are renegotiated.
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A good recovery for the airports
The Airport Monitoring Report, produced by the Australian Competition and Consumer Commission (ACCC), covers the operations of Melbourne Airport, Sydney Kingsford Smith Airport, Brisbane Airport and Perth Airport. In the 2022-23 financial year (July-June), the four airports handled 100.7 million passengers, up 127.4% year-on-year but 17.2% below 2018/19, the last full pre-pandemic period.
Photo: Peterfz30 | Shutterstock
Domestic travel led the Australian recovery in the first year free of internal travel restrictions, but the 72.8 million domestic passengers that passed through the four airports were 10.4% fewer than in 2018/19. The ACCC put that down to airlines holding back capacity in response to high rates of cancelations, delays and mishandled bags. However, domestic recovery is still not at 100% of pre-COVID levels, so it seems a structural shift in air travel demand has persisted well after travel restarted.
Photo: Brisbane Airport
In 2022-23, the airports reported 27.9 million international passengers, which was 31.0% below pre-pandemic levels, but it must be remembered that Australia’s final international border restrictions were not lifted until July 2022. The international recovery was also slowed by the ongoing travel restrictions in China and Japan for most of the 2022-23 year. In 2022-23, Brisbane Airport handled 20.2 million passengers, Melbourne 30.8 million, Perth 14.2 million and Sydney 35.5 million.
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Solid profits from airside and the car parks
More passengers return more aeronautical revenue and operating profits for airports, with the four collecting AU$2.01 billion ($1.3b) in aeronautical revenue, up 91% in real terms from the previous year. From that, they made a combined operating profit of AU$567 million ($369m), compared to a loss of AU$226 million ($147m) in 2021-22. Perth Airport produced an aeronautical profit margin of 34.6%, Sydney 29.1%, Brisbane 28.8% and Melbourne 22.9%.
Photo: Perth Airport
What might grab the public’s attention is the profits the four airports made from car parking, which collectively earned them operating profits of AU$337 million ($219m), with all four recording profit margins above 60%, and total car parking revenue reaching AU$505 million ($329m).
Photo: EQRoy | Shutterstock
In terms of parking revenue, Sydney Airport led with AU$8,632 ($5,600) per car parking space, followed by Melbourne at AU$6,038 ($3,900) and Perth at AU$4,006 ($2,600), while Brisbane declined to disclose its earnings per space. Car parking comprised 15.9% of Melbourne Airport’s total revenue, 15.0% in Brisbane, 14.7% in Perth and 9.5% in Sydney.
The four airports combined invested AU$559 million ($364m) in aeronautical operations in 2022-23, which the ACCC said was “a relatively modest amount compared to years before the pandemic.” In pre-pandemic 2018-19, the airports invested AU$1.43 billion ($929m) and in the first year of the pandemic (2019-20), they invested AU$918 million($597m) in aeronautical assets.
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