7-Feb-2011 4:03 PM

Sydney Airport poses questions to ACCC over airport rating

Australian Competition and Consumer Commission submitted its annual airport monitoring report on Adelaide, Brisbane, Melbourne, Perth and Sydney airports for 2009-10 which includes surveys of airlines and passengers over the quality of service they receive at the airports. Sydney Airport recorded the worst ranking on the commission measure of service quality, in particular services it provided to airlines. According to the report, the availability of check-in counters was poor, particularly in peak periods. The standards of baggage facilities, parking and runway control were also poor. Short-term car parking at the airport is the most expensive in the country, although the ACCC raised particular concern over Melbourne Airport's parking arrangements which makes AUD103.9 million p/a year compared with Sydney's AUD95 million. Sydney Airport made more than AUD14 per passenger in the 2009/10 financial year, an 8% increase on the previous year.

ACCC: "This year's report raises concerns about monopoly pricing at Sydney and Melbourne airports. 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." Chairman Graeme Samuel [more - report]

Sydney Airport noted (07-Feb-2011) the release of the report and its finding that passengers rated the airport as satisfactory, but raised concerns about the report’s methodology which "has not been prepared in conformity with this internationally recognised standard". Sydney Airport recently released two expert reviews of the methodology used by the ACCC in preparing its report and has called on the ACCC to provide basic information on its methodology. [more]

Sydney Airport: "Sydney Airport has long been concerned about the poor methodology used by the ACCC in its monitoring reports. This year’s report does not contain basic, indeed fundamental, methodological information such as sample sizes, margins of error and response rates. Without this essential methodological information, it is not possible to meaningfully interpret research. I would welcome a more transparent approach from the ACCC,”. CEO of Sydney Airport, Russell Balding.

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