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Melbourne Airport's profit margins from car parking shrank 11 per cent in 2015-16, but at 59 per cent remain high enough to have helped the airport rake in more parking revenue than any other in Australia.
The airport made $135.5 million from car parking in 2015-16, $79.9 million of which it pocketed as profit. According to a new report by Australia's competition watchdog, Tullamarine makes an average annual $3000 profit from each of its 25,900 car spots and achieves such high profit margins because of a lack of competition.
The airport has also increased its car parking by more than 50 per cent in the past 10 years.
"I think unquestionably all the airports including Melbourne have consumers largely over a barrel," said Rod Sims, the chairman of the Australian Competition and Consumer Commission.
Mr Sims said that even though Melbourne Airport's profits from car parking took a tumble in 2015-16, this was due to a change in its accounting for allocating costs, not a big drop in revenue.
Mr Sims spoke in reference to the ACCC's annual airport monitoring report, which was released on Monday.
The report gave Melbourne Airport's quality of service a "good" rating, up from the satisfactory rating it got in 2014-15, but a shade below Sydney Airport and well behind Perth and Brisbane, which was again ranked Australia's best airport.
The ranking is based in part on surveys of passengers and airlines about a range of issues including check-in speed, baggage processing and runway and apron access.
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The annual report also keeps tabs on profit levels to guard against potential exploitation by the airports of their monopoly status. On this front, the ACCC found airports have been able to steadily increase their charges to passengers and airlines, in part because incentives to keep costs down are insufficient.
"If you look at airports over time, the quality of service you get has been pretty constant but the charges to use them have gone up a lot, and the profit margins have gone up a lot," Mr Sims said.
The airports are also in the "wonderful position" of being able to charge their competitors for access, he said.
For example, taxis, a rival to Melbourne Airport's vast car park, are charged $3.58 to enter the airport. This access charge will bring revenues of more than $7 million each year, the ACCC report found.
Mr Sims suggested airport visitors should book a parking space online for a better deal. The report found Melbourne Airport visitors could save as much as $24 for a two-three hour parking space by booking online.
"If you book online, the airport thinks you do have an alternative such as going by taxi, whereas if you just turn up you've got no alternative," he said.
Passenger numbers at Melbourne Airport shot up 5.1 per cent last financial year to 34 million, the biggest jump in the country, the report found.
Melbourne is the only one of Australia's four major airports without a rail line, or a plan to build one. Sydney and Brisbane airports have rail lines and Perth's is due to open in 2020.
Mr Sims said a fast rail connection between Tullamarine and the CBD would likely improve Melbourne's quality of service rating.
"We've all been stuck in Tullamarine Freeway trying to get to and from the airport," he said. "If you fly into Melbourne on the 7 o'clock flight you could spend an hour in the car getting to the CBD, if you have a fast train you'd do that in 20 minutes or so."
This article first appeared on www.theage.com.au
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