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Correction: Are Australian car parking charges out of step globally?

11-Apr-2008

(This item corrects the article previously published on 10-Apr-08, following the restatement of proportions of car parking revenue to total revenue, affecting the regional and worldwide averages and commentary in the fourth paragraph, which are updated here).

The Australian Government this week directed consumer watchdog, the Australian Competition and Consumer Commission (ACCC), to monitor car parking costs and revenue at the nation's five major airports.

Transport Minister, Anthony Albanese stated he recognises “genuine public concerns about airports using their monopoly position to exert significant market power and charge higher prices for the various periods of stay". He added, “we need to ensure that this monopoly position doesn't lead to the exploitation of the travelling public and their families”.

Mr Albanese stated parking charges at some Australian airports are high, citing rates charged at London Heathrow and New York JFK airports. He added car parking charges are also a “significant, and in some cases, growing element to the revenue of the nation's airports, making up as much as 18% of an airport’s total revenue” – in this case, Melbourne.

A recent Airports Council International (ACI) economics survey found that carparking accounted for 8.6% of average airport revenues worldwide in 2006. Two Australian airports (Melbourne and Brisbane) were above the worldwide average, while Adelaide, Perth and Sydney airports were below the worldwide average and their peer, Auckland Airport.

Car parking revenues as a proportion of total airport revenues: 2006

Note: Data for Adelaide, Brisbane, Melbourne, Perth, Sydney and Auckland airports are for the 12 months ended 30-Jun-07, while the regional and worldwide averages are for Calendar Year 2006.
Source: Centre for Asia Pacific Aviation, Australian Department of Transport, Airports Council International Economics Survey 2007 and company reports

Revenue from car parking and rental car concessions was considerably higher in North America than in any other region. ACI attributed this partly to economic reasons, since a high proportion of North Americans have cars (like Australia), “and many choose to park at airports, despite the cost associated with this alternative”. An additional factor, according to the global airports body, is that many North American airports do not have available multi-modal links to bring passengers to the airport by alternative transport, such as rail or bus.

The growth in non-aeronautical revenues has been a key factor in helping airports reinvest in capital works, for which there is a considerable requirement in Australia and globally to keep up with predicted growth in demand for air travel.

Meanwhile, Australian tourism lobby group, TTF Australia, released a new study that found Australia’s airports are expected to double their contribution to the economy over the next decade and invest AUD10 billion in capital works as demand for air travel continues to grow. The study, which compared operations at eight major airports in the five years before privatisation with those after, found that airports had improved efficiency, profitability and investment levels under private ownership.

Overall, the report stated airport privatisation and the related airport Master Planning process “are a success”, producing an airport development model in Australia “that has impressed the international aviation business world”.

The efficiencies airports in Australia have gained since privatisation were attributed by the report to a number of factors, including “post privatisation investments and thus diversification of the participating airports into other revenue streams (including property development, advertising, car parking, retail and residential), as well as improved returns from aeronautical and non–aeronautical assets through competition and pricing changes aligning property rents to the “over the fence” market.

TTF national aviation manager, Mark Dimech, stated, “since privatisation, Australian airports have increased operational revenue by 42% while reducing operating costs, and made capital investments amounting to AUD2.3 billion. Just as importantly, they have laid the foundations for a further AUD10 billion of capital investment.

Mr Dimech concluded, “from the tourism industry's perspective, investment by airports means more capacity to grow air services and increase the number of airline seats into Australia - which is crucial given tourism forecasts of 61% growth in visitor numbers between now and 2016”.


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