Airport parking prices aren’t unreasonably high, Productivity Commission finds

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Posted

February 06, 2019 11:12:03

Airport parking prices aren’t unreasonable and there are legitimate reasons why you’re paying nearly $20 an hour, according to a controversial new report to the Government.

Key points:

  • Productivity Commission says airports aren’t abusing their monopoly position
  • Report says taxis, Uber and public transport options keep lid on terminal parking costs
  • Former ACCC boss blasts report as ‘superficial’, ‘nonsense’, and ‘very, very poor’

The Productivity Commission today released its draft report into Sydney, Melbourne, Perth and Brisbane airports and whether they were exploiting their market power to drive up prices and gouge customers.

It found the big four airports were not using their monopoly positions to jack up prices to the detriment of the community, even at their terminal parking lots.

“Many consumers resent the cost of car parking at the monitored airports,” the draft report said.

“Car parking charges are not due to airports exercising their market power — the price of parking at-terminal can largely be explained by the value passengers place on convenience, the limited amount of land close to the terminal, and the need to manage congestion.”

The report found Australia was heavily reliant on airports and had the highest number of domestic airline seats per capita in the world.

The number of passengers travelling through Australian airports had also doubled over the past 20 years, to about 160 million in 2017.

Despite the increased demand on limited parking spots at terminals, the Productivity Commission found a number of outside pressures could keep the airports in check.

“There are many ways for people to access the airport precinct, such as taxi, Uber, off-airport car parks and public transport,” the report said.

“While they are not perfectly substitutable for those wishing to park at the terminal, they do constrain the ability of airport operators to increase prices significantly.”

However, the report does recommend greater scrutiny of airports’ car parking operations, including the costs and revenues for at-terminal and at-distance parking.

Perhaps unsurprisingly, customers surveyed by the ABC at Melbourne Airport disagreed with the report’s conclusions.

“I’m definitely being ripped off,” one man said.

“It’s ridiculous. $24 for just over one hour,” another said.

Another added: “It’s definitely too expensive, I was only here for three quarters of an hour.”

‘Do we need a royal commission?’

The Productivity Commission’s findings have been met with outright scorn by former competition watchdog boss Graeme Samuel, who described the report as “44 pages of the most superficial analysis that I’ve seen”.

Professor Samuel is a former Australian Competition and Consumer Commission (ACCC) chairman who now chairs airline consumer group, Airlines for Australia and New Zealand — representing Qantas, Virgin Australia, Air New Zealand, Rex, Tiger Air and Jetstar.

The airlines have been waging a long-running campaign to have airports regulated, and last year commissioned Professor Samuel to report on the impact airport privatisation has had on pricing.

“I feel ripped off by the whole Productivity Commission draft report,” Professor Samuel said.

“They’ve said, ‘Oh, it’s convenient to park at Melbourne Airport. That’s why the charges are high’.

“Well, it is equally convenient to park at the Alfred Hospital, but the charges there are half of those that are charged by Melbourne Airport. Similar things occur with Sydney Airport and the like.

“It is a nonsense and frankly their analysis is very, very poor.

“They’ve ignored successive ACCC reports … that have pointed out the problems for consumers.”

There has been a historical split between the Productivity Commission and the ACCC over airport parking, with the two expressing their differing opinions as far back as 2011.

In 2017, the ACCC found airlines and their passengers had paid up to $1.6 billion in extra fees due to privatisation at the same big four airports.

This was across everything from airlines’ use of tarmacs and terminals and the price of parking.

“I say to the economic theorists sitting in their Collins St tower, get out of that tower, go to the airport, buy a bottle of water, buy a book,” Professor Samuel said.

“See what you are being charged for taxis, see what you are charged for car parking, and then understand some of the analysis that the ACCC has undertaken over 18 years.

“Do we need a royal commission to examine this, for heaven’s sake?”

Topics:

government-and-politics,

business-economics-and-finance,

air-transport,

australia



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