Friday, March 12, 2010

Sydney Airport Australia’s worst four years in row

Image: Sydney Airport Corporation Limited

Written By: eGlobal Travel News contributing editor William Sykes

Sydney Airport, Australia’s main international gateway, has been ranked the worst for customer satisfaction among the country’s five biggest airports – for the fourth consecutive year.The airport is a privately owned monopoly and airport users have long criticised its prices. A bottle of mineral water can cost nearly A$6 to take aboard a plane. Bottles of water cluster around airside newsagents to tempt the thirsty. The “no liquids” rule means passengers can’t bring drinks with them through security.

Now, Australia’s consumer watchdog, the Government-run Australian Competition and Consumer Commission (ACCC) has issued a report showing that in 2008-09, Sydney Airport actually managed to increase its profit while passenger numbers fell. Its aeronautical revenue rose by A$23 million, or 5.4 per cent, to A$446 million – yet passenger numbers plunged by 500,000 – or 1.4 per cent – to 32.7 million.

The ACCC concluded that the airport had enjoyed persistent increased profits by allowing its quality of service to fall at the expense of airlines and passengers.

The performance of Sydney Airport was “of greatest concern,” ACCC chairman Graeme Samuel declared. “The indications are that Sydney Airport has increased profits by permitting service quality to fall below that which the airlines reasonably expect. Airport users, including passengers and airlines, rated Sydney Airport last amongst the monitored airports for the fourth consecutive year and it appears that investment in the international terminal has been slow. And while Sydney Airport was the only airport to report a fall in passenger numbers, its revenue and profit margins still increased.”

Airlines aren’t happy with Sydney Airport either. The Board of Airline Representatives of Australia (BARA), representing international airlines flying to and from Australia, hears constant complaints about the way Sydney Airport is run. Airports typically charge airlines on a per passenger basis for using their facilities, and charges are often set in advance for several years at a time. Sydney Airport recorded the highest average prices at $13.63 per passenger, compared to the lowest of $7.96 at Melbourne Airport.

“While airlines lowered their airfares to attract business in the current global economic slowdown, the airports appear to have enjoyed the security of guaranteed prices as well as benefiting from the airlines’ efforts to encourage travel,” Mr Samuel said.

Formerly in public hands, Sydney Airport was sold in 2002 by the Howard Government to the Southern Cross Consortium, led by Macquarie Bank, for a fraction less than A$5.6 billion. The airport is still backed by Macquarie Bank. MAp Airports (formerly known as Macquarie Airports) and other entities related to the bank have stake in Australia’s largest airport exceeding 80%.

Parking fees at the airport draw regular fire, while rail travellers are incensed that the cost of getting to and from the airport greatly exceeds that of any other comparable rail journey in Sydney. That’s because the rail line is in private hands while the rest of the system belongs to the NSW State Government. Consumer calls last year for the NSW Government to renegotiate the contract with the private company that runs the airport and surrounding stations have come to nothing. The high cost of the rail journey ($15 one-way to Sydney) deters passengers. If travelling as a family or group, it’s cheaper to catch a train to a nearby publicly owned station, such as Hurstville, and catch a cab the rest of the way.

Price-gouging over airport car parking is another source of consumer ire. The price of short-term parking has almost doubled over the past financial year, from $28 to $50 for four hours. ‘‘Car parking revenue was considerably above operating expenses over the whole reporting period,’’ the ACCC said. Other big airports in Australia also use their monopoly situation to change extortionate parking fees. “The ACCC has observed that some airports may affect the cost or convenience of potential alternatives to on-airport parking, which could contribute to the high margins reported for on-airport car parking.”

Sydney Airport management has reacted predictably to the criticism. It has challenged the methodology used by the ACCC and it claims things have changed since the report was released. Passengers are now “appreciating the improved travel experience that is being produced by the ongoing upgrade’’ according to an airport spokesman.

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