A national watchdog has slammed Australian airports for using high car parking prices to record millions in profit.

OPINION

AUSTRALIA’S airports are abusing their market power to rake in extreme profits on parking. It’s time for the scam to end.

Yesterday’s release of the ACCC’s Airport Monitoring Report for 2014-15 once again shone a light on the absurd profit margins enjoyed by our nations airports.

Let’s be clear: no one begrudges businesses earning a crust for providing services.

But when those businesses are privatised government monopolies taking advantage of non-existent competition to gouge consumers more than 70 cents in the dollar, something needs to be done.

News.com.au invited the airports to justify their absurdly high profit margins, but most of them wouldn’t actually answer the question (see below).

How absurdly high?

In 2014-15, Melbourne Airport’s car park revenue was up 14.8 per cent to $147 million, accounting for 19.5 per cent of total revenue. Of that, 73.2 cents in the dollar was pure profit.

Sydney Airport’s car park revenue was up 4.7 per cent to $127.8 million, representing 10.7 per cent of total revenue. Its profit margin was 71.7 cents in the dollar.

Brisbane Airport? Its car park revenue was up 4.6 per cent to $84.5 million, making up 13.8 per cent of total revenue, with a healthy profit margin of 67.2 cents in the dollar.

Poor old Perth Airport, while seeing a decline in car park revenue of 1.2 per cent to $65.1 million, representing 15.2 per cent of the total, still made 63.7 cents in the dollar profit.

In other words, the four airports monitored by the ACCC (yes, Adelaide, we know you have an airport too) gouged just under $300 million from motorists in the space of 12 months.

You can hardly blame them, though — it’s simple supply and demand. Companies only charge what people are willing to pay, so clearly some people are willing to pay through the nose for parking.

Others, not so much. Take Sydney Airport’s reviled Public Pick-up area, which should stand as a shining example to all businesses of the saying: “Just because we can, doesn’t mean that we should.”

The public pick-up car park gives you a window of just 15 minutes before you get slogged. Even if you’re lucky enough to time your arrival exactly, there’s a fair chance you still won’t make it out of there.

“Even though the person was standing there waiting and couldn’t have gotten in the car any faster, it took longer than 15 minutes in the gridlock in the minuscule crowded car park just to drive 50m to the exit so we had to pay $7 just to get out,” one reader wrote.

Another reader described Melbourne Airport’s parking fees as “legalised theft”. “Last year my brother picked me up from Melbourne airport,” they wrote.

“My international flight had been delayed from New York to LA, missed my connecting flight to Melbourne therefore he did not know what flight I was on. End of story — parking cost $79!

“I have visited so many airports overseas where they have trains that drop you off right inside the airport and the cost of the ticket is no more than the average metro fare.

“Even New York has this. After returning to Oz to live after 30 years abroad, after 10 months here I am still shocked by the blatant rip-offs.”

Businesses can hardly be blamed for making too much profit, although the ACCC makes noises about it from time to time.

Last month the watchdog hit out at petrol retailers for price gouging, describing their margins of 12.4 cents a litre as “unreasonably high”, given retail margins 10 years ago were around 3.7 cents a litre.

While ACCC chairman Rod Sims yesterday criticised the high profit margins resulting from a “lack of competitive pressure”, he stopped short of accusing the operators of abusing their market power.

A spokesman for the ACCC said: “High prices are not of themselves evidence of anti-competitive behaviour which may be in breach of the Act.”

Mr Sims did, however, warn that by offering discount parking rates through online bookings, the airports could in fact be guilty of price discrimination.

In other words, why should a customer be penalised with an “unreasonably high” parking rate just because they haven’t taken the time to book online?

According to the ACCC, motorists can save up to 66.5 per cent for longer-term parking durations. Shouldn’t the airports offer the best price they can to everyone?

News.com.au has challenged each airport to answer a very simple question: “How do you justify your high profit margins on parking services?”

Below are their responses. Readers are free to propose their own.

Perth

Statement from Brad Geatches, CEO of Perth Airport: “The ACCC Airport Monitoring Report 2014-15 notes that, of the four major Australian capital city airports monitored, Perth Airport recorded the lowest car park profit margin.

“Compared to the other major airports, Perth Airport is also consistently offering the cheapest drive-up prices for short-term parking and the introduction of the online car park booking system delivers additional options, convenience and discounts for customers.

“Since the reporting period, Perth Airport has invested $16.4 million to expand Long Term Car Park H and has expanded and improved the offering in the T1 Short Term Car Park to coincide with the opening of the T1 Domestic Terminal for Virgin Australia.

“In addition to 1826 car bays and 52 dedicated motorcycle bays, this car park includes a mix of disabled access bays, ‘parents with prams’, hourly and short term overnight bays, along with dedicated Small Charter Vehicle and car rental areas.”

Brisbane

Statement from a Brisbane Airport spokeswoman: “Brisbane Airport Corporation (BAC) re-invested $334 million into airport last year, which is just some of the more than $3 billion worth of investment planned over the next decade, including a new runway.

“No airport could cover the high costs of investment to provide new infrastructure while continually updating current infrastructure, nor the high operational costs of running an airport, if it did not make an economic return from its commercial businesses.

“In respect of car parking, the consumer has several choices on how to travel to the airport with a range of price points. There are the standard drive up rates at our car parks but Brisbane Airport also provides significant discounts for on-line booking and/or long stay in its undercover terminal car parks.

“We have recently introduced a new cheaper remote, open air car park ‘AIRPARK’, which was not included in the ACCC report. There are also a range of public transport options with train, bus and taxi services to the airport and, of course, several off airport car park businesses, all of which compete for the airport transport business.”

Melbourne

Still waiting.

Sydney

Statement from a Sydney Airport spokeswoman: “Sydney Airport has introduced a new dynamic demand management system which means online prices are able to be discounted for customers, while at the same time making more efficient use of our existing parking infrastructure.”

frank.chung@news.com.au