Hidden fee increasing flight costs

Travellers are paying more to fly because four of Australia’s largest airports are charging airlines hefty fees, according to the competition regulator.

The Australian Competition and Consumer Commission (ACCC) singled out Sydney as the worst airport in the country when it comes to “aeronautical revenue”. 

Aeronautical revenue is the money airports earn from charging airlines to use infrastructure such as runways, parking bays, aero-bridges and terminals. The airports have a monopoly on the infrastructure, in most cases, so these fees can get out of control.

According to the ACCC report on airports, most airlines will pass this cost onto the passenger in ticket prices.

Sydney airport’s aeronautical revenue rose by more than 4 per cent to $18.30 per passenger in the past year.

Melbourne airport’s aeronautical revenue rose by 5.7 per cent to $12.40 per passenger last financial year.

“It is not surprising that the airports are so profitable, given that they face little competitive pressure and no price regulation,” ACCC chairman Rod Sims told Fairfax today.

“Airfares are going down but they would have been going down further if you hadn’t had constant increases in the aeronautical charges from the airports.”

But the The Australian Airports Association rejected any suggestion that the higher fees were pushing up ticket prices.

The association’s chief economist Warren Mundy says the fees had risen to fund infrastructure and capacity – which had allowed other airlines to enter the Australian market and bring the ticket price down.

The association’s chief economist Warren Mundy says the fees had risen to fund infrastructure and capacity – which had allowed other airlines to enter the Australian market and bring the ticket price down.

The ACCC report also took aim at car park costs. Once again, Sydney was the most expensive city to fly from.

Sydney Airport’s profit margin from car parking sits at almost 72¢ for each dollar. Melbourne Airport made 60¢ profit for every dollar spent on parking.

But the ACCC also offered a way to reduce parking costs – book online before you go. If you drive up to Sydney airport you can expect to pay $17.56 an hour, compared with $10.73 for an online booking. 

Written by Alison Godfrey. Republished with permission from MyDiscoveries.