Is a business at the airport profitable?

Having a business at the airport sounds like a great idea as most airports never sleep, but is it actually profitable?

A report released by the Australian Competition and Consumer Commission has shown that from 2016-2017, businesses in the four major Australian airports – Sydney, Melbourne, Brisbane and Perth have gotten better as more people are now travelling, parking, eating, drinking and spending more time at airports in general. The airport business during this time has been reported to profit just over $2.1 billion Australian in total. This includes aeronautical and car parking operations. The operating profit made of these airports combined, including aeronautical and car parking operations totalled to just over $1 billion Australia.

Just in June of last year, Prime Minister Scott Morrison announced an inquiry by the Productivity Commission to examine airport pricing and efficiency. Along with the Australian Competition and Consumer Commission, they are now pushing for stricter legislations of airport finances. The main concern and reason for this push is due to the increase in profits and a possibility that the current regulatory regime won’t constrain the market power of the four Major Australian airports.

Unconstrained monopolies have often had incentives and the abilities to charge increased and excessive prices while lacking in being able to provide the service and/or product to meet such prices.

In New Zealand, a lobby group has been formed consisting of all major airlines in the region in order to aim for tighter regulations around how airports are currently being managed. Australia is not collecting 25 per cent more revenue at airports compared to the reports from ten years ago.

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