INTHEBLACK June 2026 - Magazine - Page 22
F E AT U R E
“It is really important for productivity in Australia that there
is a good check on market power … because we do want to
make sure that these assets are efficiently invested in and
efficiently used. We think it is time to have a look and make
sure that customers are being properly protected.”
ANNA BRAKEY, AUSTRALIAN COMPETITION & CONSUMER COMMISSION
passenger demand, underscoring the sector’s
volatility. At the same time, airports manage
rising costs, workforce shortages and the need
to invest in long-term infrastructure.
“Balancing these pressures while delivering
safe, efficient and high-quality passenger
experiences remains a core challenge,”
Westaway says.
MONOPOLY CONCERNS
The sheer level of profit that airports
generate raises questions about monopolies
and market power, including in Australia.
In its March 2026 Airport Monitoring
Report, the Australian Competition
& Consumer Commission (ACCC) reports
that Australia’s four biggest airports, Sydney,
Melbourne, Brisbane and Perth — each
collected record-high revenues in 2024–25.
They collectively made A$1.2 billion in
operating profits from aeronautical activities
(that typically cover landing charges,
passenger service fees, aircraft parking
and airbridge usage), which is 9.8 per cent
higher than the previous year. Sydney
Airport’s 20.8 per cent return on aeronautical
assets was the highest recorded by any
Australian airport in more than two decades
of ACCC monitoring.
Such results raise the question: are
high profits evidence of efficient capital
management or of monopoly pricing
power? A new review by the Productivity
Commission into regional aviation, along
with a Senate inquiry into the state of the
aviation sector, including delivery of services
in rural, regional and remote communities,
means that 2026 is shaping as a critical year
for the sector.
On the back of the four airports’ rising
profits, ACCC commissioner Anna Brakey
has issued a warning about a lack of
constraints on airport monopolies, calling
for the government to direct the Productivity
Commission to undertake a new inquiry into
the economic regulation of airports that
22 INTHEBLACK June 2026
would consider proposals such as an
arbitration regime.
Although the ACCC still supports the
rights of airports and airlines to negotiate
independently over aeronautical charges,
Brakey says there should be access to
“binding arbitration in the event that
they cannot agree”.
“It is really important for productivity
in Australia that there is a good check on
market power … because we do want to make
sure that these assets are efficiently invested
in and efficiently used,” she says. “We think
it is time to have a look and make sure that
customers are being properly protected.”
Brakey says the ACCC does not want
to affect the financial viability of any industry,
as that could hurt customer outcomes, “but
we do think the major airports hold a very
high degree of market power within their
geographic location, and that gives us cause
for concern”.
Adelaide Airport managing director
Brenton Cox says Australia’s current airport
business model, following privatisation
of major capital city airports in the late
1990s, has delivered significant benefits
for the nation — unlocking private capital
investment and removing a financial burden
from taxpayers. “Our major airports are
widely held by institutional investors,
particularly superannuation funds, and
have delivered stable, long-duration returns
typical of core infrastructure assets,” he says.
“Evidence of strong and sustained returns
has made them attractive for retirement
savings portfolios.”
Cox adds that a key strength of the
privatisation model has been regulatory
stability. “Airports operate under a long-term
lease and monitoring regime, which has
historically provided certainty to investors
while avoiding heavy-handed price controls.
This ‘light-handed’ approach has generally
encouraged investment and efficiency, ensuring
capital flows without ongoing fiscal cost.”
