Tuesday, March 31, 2009

Airport car parking rips you off

So says Australia's competition regulator

It'd have a fair idea

The ACCC says Melbourne Airport's parking fees are too high and suspects price gougingThe Competition and Consumer Commission has told Assistant Treasurer Chris Bowen that Melbourne's parking fees jumped 50 per cent in the 2 years to 2007-08 with the price of a two-hour stay jumping from $12 to $18.

Its report, prepared at the Assistant Treasurer's direction, finds that total revenue per car park space is "well above expenses including depreciation".

Melbourne Airport makes more of its revenue from parking fees than any other, getting 21 per cent of its revenue from car parks, compared to 7 per cent for Sydney Airport.

The Commission says it believes the prices charged may reflect not only "locational rents", justified by proximity, but also "monopoly rents", gained by the airport operators using their market position to push prices even higher...

It is concerned that Airport operators may using their role as a regulators to drive traffic toward their car parks, noting that they "are in a position to limit vehicle standing times - especially for dropping off and picking up passengers - in excess of the necessary security provisions".

"An airport exercising market power in car parking would have discretion to increase charges, which would be expected to result in the persistence of higher profits over time. Although not definitive by any means, the monitoring results are consistent with this expectation," the report says.

It notes that Melbourne Airport opened an extra 2500 long-term parking bays in December 2007 and is due to open a $65 million extension of its multilevel car park in June, but finds that the overall growth in the number of short-term spaces has been less than the growth rate in people using the airport.

Qantas yesterday backed the Commission describing the fees as "excessive," not only for travelers but also for its own staff. It asked the regulator to extend its monitoring to staff parking fees.

"Airports all around the country have been raising fees aggressively," said spokesman Joe Aston. "They operate outside business hours, and they can't run without staff. They are taxing the people they need."

The report finds that satisfaction with the overall standard of airport service dropped in 2007-08 with Melbourne remaining the 4th rated Australian airport behind Brisbane, Adelaide and Perth.

It says the quality of service appears unrelated to their financial performance, with Sydney, Australia's most profitable airport, judged as providing the worst service for the third consecutive year.

Melbourne's aeronautical revenue climbed 17 per cent in 2007-08 as a result of an 8 per cent increase in passenger numbers and a 9 per cent increase in revenue per passenger.

Mr Bowen said he noted the ACCC's concern about parking charges and said he would "reflect on what further action might be appropriate".

He directed the Commission to continue to monitor the performance of the five major privatised airports for another year.