Recent infrastructure investment at Australia's four largest airports may lead to higher airfares for passengers, the Australian Competition and Consumer Commission (ACCC) warned today (March 5).
According to the competition authority, Brisbane, Melbourne, Perth, and Sydney airports collectively spend just over AU$1bn ($700.4 million) on airport infrastructure investment during the financial year 2024-25.
The investment projects were largely aimed at expanding capacity, as well as upgrading terminals and improving access.
The ACCC's report said that increased investment shows a shift from a low level of spending in the years after the pandemic, with major construction projects now underway across all four airports. Over the next decade, the airports have proposed nearly AU$20bn ($14bn) in such projects.
However, demand for travel has continued to rise since the pandemic, with a greater need for airports to upgrade their infrastructure.
ACCC commissioner Anna Brakey said this spending would help airports meet this rising demand, with the four airports collectively handling around 120 million passengers in 2024-25.
“Large capital programs are likely to place upward pressure on airport charges paid by airlines, which may result in higher airfares for passengers as these costs are recouped,” said Brakey. “It is important that airport charges reflect sensible and timely investment decisions, efficient costs and a rate of return that matches the risks involved."
“Airport charges are not regulated and the ACCC has consistently raised concerns that the current monitoring framework is inadequate and an ineffective constraint on the behaviour of the major airports, who hold market power,” the ACCC said.
Sydney airport remained the most profitable of the four, recording just over AU$580 million ($406.2 million) in operating profit over the 2024-25 period.
Collectively, the four airports recorded AU$2.9bn ($2bn) in revenues over the period. This came despite passenger growth easing — up 4.6% in 2024-25, compared to a 13.7% growth in 2023-24.