Airport Monitoring Report 2011-12
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A report on Australian's airports from consumer watchdog Australian Competition and Consumer Commission.

A report on Australian's airports from consumer watchdog Australian Competition and Consumer Commission.

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Airport Monitoring Report 2011-12 Document Transcript

  • 1. AirportMonitoringReport 2011–12Adelaide Brisbane Melbourne Perth SydneyReport
  • 2. Airport Monitoring Report 2011-12Price, financial performance and quality ofservice monitoringApril 2013
  • 3. ISBN 978 1 921973 61 1Australian Competition and Consumer Commission23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601© Commonwealth of Australia 2013This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a CreativeCommons Attribution 3.0 Australia licence, with the exception of:• the Commonwealth Coat of Arms• the ACCC and AER logos• any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold copyright, but whichmay be part of or contained within this publication.The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence.Requests and inquiries concerning reproduction and rights should be addressed to the Director, Internal Communication and Publishing Services, ACCC,GPO Box 3131, Canberra ACT 2601, or publishing.unit@accc.gov.au.Important noticeThe information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as astatement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional adviceif you have any specific concern.The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy,currency or completeness of that information.Parties who wish to re-publish or otherwise use the information in this publication must check this information for currency and accuracy prior to publication.This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Any queries parties haveshould be addressed to the Director, Internal Communications and Publishing Services, ACCC, GPO Box 3131, Canberra ACT 2601, orpublishing.unit@accc.gov.au.ACCC 04/13_700www.accc.gov.au
  • 4. Airport Monitoring Report 2011-12 ContentsiiiContentsGlossary vKey Findings viiSummary xiii1 Overview of the monitoring results for aeronautical services 11.1 Introduction 21.2 Airport terminal configurations 21.3 Key observations from the monitoring results for aeronautical services 41.4 Price monitoring results 151.5 Quality of service monitoring results 461.6 Price and quality outcomes for the airports 522 Potential aeronautical capacity issues at airports 532.1 Introduction 532.2 Recent growth in passenger throughput and aeronautical investment 542.3 Congestion is emerging at a number of monitored airports 572.4 Passenger throughput is forecast to continue to grow over the next 59two decades2.5 Inadequate investment and effects on ongoing congestion 602.6 Approaches for dealing with congestion in the short-term and long-term 602.7 Airports’ incentives for aeronautical investment 642.8 Airports’ current investment plans in response to emerging congestion 652.9 Different approaches to funding aeronautical investment 682.10 The impact of regulatory access arrangements 713 Overview of airport car parking and landside services 733.1 Introduction 743.2 Airport car parking configurations 743.3 Airport car parking prices 773.4 Airport car parking revenues, costs and profits 803.5 Airport car parking availability and quality 863.6 Landside access charges and revenues 903.7 Observations from the monitoring results for airport car parking and 93landside access3.8 Passenger growth, capacity constraints and investment in airport 97car parking and landside services4 Adelaide Airport 1034.1 Overview of aeronautical and car parking monitoring results 1044.2 Airport overview and major airport investments 105
  • 5. Contents Airport Monitoring Report 2011-12iv4.3 Aeronautical prices monitoring and financial performance results 1084.4 Aeronautical services quality of service monitoring results 1324.5 Car parking services monitoring results 1544.6 Adelaide Airport price and quality of service monitoring beyond 2011-12 1645 Brisbane Airport 1675.1 Overview of aeronautical and car parking monitoring results 1685.2 Airport overview and major airport investments 1705.3 Aeronautical prices monitoring and financial performance results 1735.4 Aeronautical services quality of service monitoring results 1935.5 Car parking services monitoring results 2186 Melbourne Airport 2316.1 Overview of aeronautical and car parking monitoring results 2326.2 Airport overview and major airport investments 2346.3 Aeronautical prices monitoring and financial performance results 2366.4 Aeronautical services quality of service monitoring results 2536.5 Car parking services monitoring results 2827 Perth Airport 2957.1 Overview of aeronautical and car parking monitoring results 2967.2 Airport overview and major airport investments 2987.3 Aeronautical prices monitoring and financial performance results 3017.4 Aeronautical services quality of service monitoring results 3227.5 Car parking services monitoring results 3518 Sydney Airport 3638.1 Overview of aeronautical and car parking monitoring results 3648.2 Airport overview and major airport investments 3668.3 Aeronautical prices monitoring and financial performance results 3708.4 Aeronautical services quality of service monitoring results 3948.5 Car parking services monitoring results 422AppendicesA1 Regulatory accounts for the monitored airports 437A2 Indicators and statistics used in the report 458A3 Airport car parking statistics 489A4 History of airport regulation in Australia 504A5 Regulatory framework 509A6 Services provided by airports 514A7 Methodology for this report 517
  • 6. Airport Monitoring Report 2011-12 GlossaryvGlossaryAASB Australian Accounting Standards BoardACCC Australian Competition and Consumer CommissionAC&BPS Australian Customs and Border Protection ServiceAGAAP Australian Generally Accepted Accounting PrinciplesAIFRS Australian equivalents to International Financial Reporting StandardsAPS Australian Protective ServiceAvailability Describes the amount of the facility/service made available relative to demandsfor the facility or service. May include whether facilities or services are availableor restricted due to congestion, positioning, maintenance, or repairs, theaccessibility or usefulness of the facility/service provided, and the efficiency ofthe system to allocate usage.BARA Board of Airline Representatives of AustraliaBITRE Bureau of Infrastructure, Transport and Regional EconomicsCBD central business districtCCA Competition and Consumer Act 2010CTFR Counter Terrorism First ResponseCPI consumer price indexDAFF Department of Agriculture, Fisheries and Forestry, BiosecurityBiosecurityDIAC Department of Immigration and CitizenshipDIT Department of Infrastructure and TransportDTL domestic terminal leaseEBITA earnings before interest, tax and amortisationEBITDA earnings before interest, tax, depreciation and amortisationFAC Federal Airports CorporationFSC full service carrierGA general aviationGST goods and services taxIASB International Accounting Standards BoardLCC low cost carrier
  • 7. Glossary Airport Monitoring Report 2011-12viLHS left-hand sideLIS Line in the sandMinister Minister with portfolio responsibility for Transport and InfrastructureMTOW maximum take-off weightPeak hour The hour that, on average for each day in the financial year, has the highestnumber of (arriving/departing/total of both) passengers.PC Productivity CommissionPFC passenger facilitation chargesPSC passenger services chargeRHS right-hand sideRPT regular public transportSLA Service level agreementsStandard Describes the physical condition of the facility/service supplied and condition inwhich it is generally maintained.SAR state of the art renewalTPA Trade Practices Act 1974 (renamed the Competition and Consumer Act 2010on 1 January 2011)White paper Aviation White Paper: Flight path to the future, Australian Government, 2009
  • 8. Airport Monitoring Report 2011-12 Key FindingsviiKey Findings – Airport Monitoring 2011-12The ACCC’s monitoring role for the major airportsThis report presents the results of the ACCC’s monitoring of the quality, prices,costs and profits related to aeronautical and car parking services supplied byAdelaide, Brisbane, Melbourne, Perth and Sydney airports for the 2011-12 financialyear.As confirmed in the recent inquiry into the economic regulation of airport services bythe Productivity Commission (PC), the monitored airports have market power.These airports are monitored to provide information to the public and thegovernment about the airport operators performance. However, monitoring does notrestrict the airports from increasing prices or degrading service standards to earnmonopoly profits.In 2011-12, airports continued to be profitable but quality of service was downMonitored airports earned profits in 2011-12 but despite continued investment inaeronautical assets, overall ratings for quality of service were lower at each of themonitored airports compared with 2010-11.Sydney, Brisbane and Perth airports reported higher margins in 2011-12 relative tothe previous year. Melbourne Airport’s margins were adversely affected by a jump incosts while Adelaide Airport experienced a large drop in passenger numbers andrevenue.The lower overall ratings for quality of service at monitored airports reinforces theneed for more investment as demand for airport services grows more quickly thanairports’ capacity to accommodate the increase in demand.In 2011-12, demand for airport services was underpinned by solid growth inpassenger numbersGrowth in combined passenger numbers at the monitored airports continued todrive demand for airport services during 2011-12. Passenger numbers at themonitored airports increased 2.5 per cent in 2011-12, the tenth consecutive year ofgrowth in airport patronage.Total passenger numbers fell at Adelaide Airport, but falls in domestic travelSydney and Melbourne airports were offset by solid growth in internationaltravel at these airports.Perth Airport registered the strongest growth among monitored airports drivenby substantial growth in domestic travel and strong growth in internationaltravel. Growth in both domestic and international travel contributed to a solidincrease in passenger numbers at Brisbane Airport.Average prices charged by airports and aeronautical revenue higher in 2011-12Combined revenues from aeronautical services at the monitored airports increased4.5 per cent in 2011-12. All airports other than Adelaide Airport earned higheraeronautical revenues.
  • 9. Key Findings Airport Monitoring Report 2011-12viiiAverage aeronautical revenue per passenger (a proxy for average prices) acrossmonitored airports increased around 1.9 per cent.Aeronautical revenue per passenger increased at Sydney, Melbourne andBrisbane airports but fell at Adelaide and Perth airports.Sydney Airport remained the airport with the highest aeronautical revenue perpassenger at $14.96.Aeronautical margins also higher in 2011-12Combined margins on aeronautical services at the five monitored airports increased2.2 per cent during 2011-12. Margins increased at all airports other than Adelaideand Melbourne airports.On a per passenger basis, average aeronautical margins across the monitoredairports were largely unchanged in 2011-12.Brisbane and Sydney airports earned higher margins per passenger butAdelaide, Melbourne and Perth airports experiencing lower margins.Sydney Airport continued to be the airport with the highest aeronautical marginper passenger at $7.33 per passenger.Overall quality of aeronautical services fell at all airports during 2011-12The overall ratings for quality of service (that is, quality of service ratings fromsurveys of airlines, passengers, border agencies as well as objective indicators) fellat each of the monitored airports during 2011-12.For the first time since 2007-08, none of the airports achieved an overall rating of atleast good, that is, all airports were rated satisfactory.Key quality of service results for Australia’s monitored airports during 2011-12 were:Sydney Airport continues to be rated lowest overall. Passengers increasedtheir ratings within the satisfactory category, while airlines’ ratings droppedfrom satisfactory to poor.Brisbane Airport was rated highest for overall quality of service. Passengerscontinued to rate Brisbane Airport good while airlines dropped their ratingswithin the satisfactory category. Airlines’ ratings for runway availabilitydecreased significantly from good in 2010-11 to poor in 2011-12.Perth Airport continued to be rated second lowest overall. Airlines’ ratingsremained unchanged at poor while passengers’ ratings decreased from good tosatisfactory.Car parking revenues higher during 2011-12The number of car park spaces increased at all airports other than MelbourneAirport in 2011-12. Overall, Melbourne Airport had the largest number of car parkspaces (21 924) followed by Perth Airport (15 626) and Sydney Airport (13 116).
  • 10. Airport Monitoring Report 2011-12 Key FindingsixTotal revenue earned from the monitored airports’ landside access operationsincreased by almost 20 per cent to around $28.7 million.Sydney Airport continues to earn the highest revenue and margin per car parkspace ($7654 and $5290 respectively) while Perth Airport reported the lowest($3239 and $2187 respectively).Sydney Airport reported the largest increase in landside revenues(36.9 per cent) and continued to be the airport with the highest revenues fromlandside charges ($13.3 million).Airport investments increased during 2011-12In 2011-12, monitored airports collectively invested $547.4 million in aeronauticalassets - this was 61.7 per cent more than $339.5 million invested in 2010-11.Congestion emerging at some airportsStrong growth in passenger numbers in recent years has placed increasingpressure on existing aeronautical infrastructure and landside arrangements.Despite continued investment in aeronautical assets, there are signs of congestionemerging at Australia’s monitored airports. Data published by the Bureau ofInfrastructure, Transport and Regional Economics (BITRE) indicates increasingincidence of delays to scheduled domestic flight arrivals and departures atmonitored airports. While these data are not direct evidence of capacity constraintsat airports, they are indicative of emerging system-wide congestion.Aeronautical services:Brisbane Airport: According to Brisbane Airport the current runway system islikely to reach capacity in the next two years. While Brisbane Airport is in theearly stages of constructing a new runway, there is conjecture as to how theproject will proceed given the differences between the airport and airlines onhow its cost should be recovered.Melbourne Airport: investment is planned for expansion of runway capacity inthe next seven years in order to meet the growing demand.Perth Airport: demand concentration, particularly during ‘fly-in/fly-out’ peakperiods, is placing pressure on its infrastructure. A new domestic terminal wascompleted in March 2013.Sydney Airport: concerns over capacity issues are reflected in the reduction topoor in this year’s ratings by airlines of availability of airside services, includingrunways, taxiways and aprons. The current legislated runway managementsystem sets a cap of 80 hourly aircraft movements which places limits onoptions.Car parking and landside arrangements:Evidence of congestion in terminal forecourts and landside services hasprompted airports to improve arrangements for dealing with traffic flows, suchas establishing new public passenger pick up areas and additional car parkingspaces.
  • 11. Key Findings Airport Monitoring Report 2011-12xInvestment will be required for additional capacityAeronautical servicesForecasts of continued growth in passenger throughput and aircraftmovements at monitored airports suggests that existing aeronauticalinfrastructure will be under increasing pressure in the years ahead.In 2011-12, the decline in overall ratings for quality of service suggests thatdemand for aeronautical services, may be growing more quickly than theapparent ability to accommodate the increased demands placed oninfrastructure, particularly at Brisbane, Sydney and Perth airports.Australian airports have typically not used peak-period pricing to efficientlyration excess demand, preferring to ration quantity through slot managementschemes. In the short term, dealing with congestion through slot managementschemes based on grandfathered landing rights may discourage entry of newairlines.In the long term, it is apparent that without additional investment inaeronautical capacity Australia’s largest airports will face challenges in the nextfew years continuing to provide aeronautical services that meet the reasonableexpectations of users.Landside servicesIn order to facilitate access to landside services and maximise the efficiency oflandside infrastructure networks, Australia’s major airports will need to ensurethat they engage all relevant stakeholders. While an airport is responsible forplanning and developing terminal access roads and car parking facilities withinthe airport boundaries, local and state governments must work in conjunctionwith the airports.The ACCC will continue to report on progress with airport investments and howairports are responding to airside and landside congestion.
  • 12. Airport Monitoring Report 2011-12 Key FindingsxiKey Performance Indicators 2011-12Table 1: Key indicators for the monitored airports for 2011-12Airport Passengernumbers(million)Totalaeronauticalrevenue($million)Aeronauticalrevenue perpassenger($)Aeronauticaloperatingmargin perpassenger($)Return onaeronauticalassets(%)Overallrating forquality ofservice(out of 5)Adelaide 7.1 78.1 11.01 4.53 7.6 3.87Brisbane 21.2 212.4 10.02 4.47 6.8 3.92Melbourne 28.4 243.6 8.58 3.38 10.1 3.44Perth 13.3 118.0 8.86 3.12 11.3 3.36Sydney 36.3 543.5 14.96 7.33 10.5 3.33Note: Comparisons across monitored airports must be treated with caution. Results can be affected by the airports’varying terminal configurations and the different approaches to valuing assets.Table 2: Percentage change in key indicators from 2010-11 to 2011-12Airport PassengernumbersTotalaeronauticalrevenueAeronauticalrevenue perpassengerAeronauticaloperatingmargin perpassengerReturn onaeronauticalassetsOverallrating forquality ofserviceAdelaide ▼ 4.0% ▼ 9.3% ▼ 5.5% ▼ 14.8% ▼ 2.6pp ▼ 1.5%Brisbane ▲ 4.6% ▲ 7.0% ▲ 2.2% ▲ 9.2% ▲ 0.6pp ▼ 7.1%Melbourne ▲ 0.2% ▲ 5.0% ▲ 4.8% ▼ 9.9% ▼ 2.2pp ▼ 7.6%Perth ▲ 16.3% ▲ 14.5% ▼ 1.6% ▼ 12.5% ▼ 1.9pp ▼ 8.7%Sydney ▲ 0.1% ▲ 3.6% ▲ 3.5% ▲ 6.4% ▲ 0.9pp ▼ 9.0%Note: pp = percentage pointsTable 3: Car parking prices as at 30 June 20121Airport Short-term car parking Long-term car parking1 hour 3 hours 8 hours 24 hours 1 day 7 daysAdelaide $4.00 $11.00 $26.00 $30.00 $25.00 $70.00Brisbane $14.00 $22.00 $50.00 $50.00 $40.00 $140.00Melbourne $12.00 $28.00 $55.00 $55.00 $29.00 $77.00Perth $6.00 $10.20 $15.20 $38.00 $17.00 $93.00Sydney $16.00 $29.00 $56.00 $56.00 $26.00 $127.00Table 4: Percentage change in car parking prices from 30 June 2011 to 30 June2012Airport Short-term car parking Long-term car parking1 hour 3 hours 8 hours 24 hours 1 day 7 daysAdelaide 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Brisbane ▲ 7.7% 0.0% ▲ 25.0% ▲ 25.0% 0.0% 0.0%Melbourne 0.0% 0.0% ▲ 5.8% ▲ 5.8% 0.0% 0.0%Perth ▲ 7.1% ▲ 2.0% ▲ 1.3% ▲ 5.6% ▲ 6.3% ▲ 5.7%Sydney ▲ 6.7% ▲11.5% ▲ 7.7% ▲ 7.7% ▲ 4.0% ▲ 4.1%1Brisbane, Perth and Sydney airports’ short-term and long-term car parking prices are based on the domestic terminalcar park at each airport. Melbourne Airport’s long-term car parking prices are based on the long-term uncovered carpark located at distance from the terminal precinct.
  • 13. Key Findings Airport Monitoring Report 2011-12xiiTable 5: Key car park indicators for the monitored airports for 2011-12Airport Totalairport carparkingrevenue($million)Totalairport carparkingoperatingmargin($million)Totalairport carparkingspacesAirport carparkingrevenue percar parkspace($)Airport carparkingmargin percar parkspaceAirport carparkingrevenue as% of totalairportrevenue(%)Adelaide 14.0 9.5 3 002 4 673 3 179 9.7Brisbane 60.9 37.9 12 862 4 738 2 944 12.5Melbourne 114.7 86.4 21 924 5 231 3 942 20.0Perth 50.6 34.2 15 626 3 239 2 187 7.0Sydney 100.4 69.4 13 116 7 654 5 290 10.0Table 6: Percentage change in key indicators from 2010-11 to 2011-12Airport Totalairport carparkingrevenue($million)Totalairport carparkingoperatingmargin($million)Totalairport carparkingspacesAirport carparkingrevenue percar parkspace($)Airport carparkingmargin percar parkspaceAirport carparkingrevenue as% of totalairportrevenue(%)Adelaide ▼ 4.9% ▼ 10.0% ▲ 0.1% ▼ 5.0% ▼ 10.1% ▲ 0.5ppBrisbane ▲ 1.4% ▼ 11.8% ▲ 31.7% ▼ 23.0% ▼ 33.0% ▼ 0.6ppMelbourne ▲ 0.05% ▼ 0.6% ▼ 2.2% ▲ 2.3% ▲ 1.6% ▼ 1.0ppPerth ▲ 23.2% ▲ 24.3% ▲ 7.4% ▲ 14.7% ▲ 15.8% ▼ 6.9ppSydney ▲ 2.5% ▲0.4% ▲ 6.9% ▼ 4.1% ▼ 6.1% ▼ 0.2ppNote: pp = percentage pointsTable 7: Investments in tangible aeronautical non-current assets –2002-03 to 2011-12 ($M)$M 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Adelaide 4.4 49.8 135.1 25.3 1.8 3.8 3.1 4.4 38.1 59.9Brisbane 16.0 8.7 19.9 32.5 92.5 247.6 199.1 150.9 63.2 155.9Melbourne 22.5 19.7 70.6 42.2 60.6 83.7 161.0 136.7 103.4 155.8Perth 6.7 7.1 27.6 10.7 15.8 28.4 47.4 45.3 69.7 75.6Sydney 151.1 49.2 46.3 124.4 161.6 83.9 345.3 227.1 65.0 100.2Table 8: Investments as proportions of tangible aeronautical non-current assets –2002-03 to 2011-12 (%)2002-03%2003-04%2004-05%2005-06%2006-07%2007-08%2008-09%2009-10%2010-11%2011-12%Adelaide 3.4 28.3 32.8 6.3 0.5 1.0 0.8 1.2 9.5 13.4Brisbane 2.8 1.5 2.2 3.5 9.1 19.5 14.2 11.4 4.7 10.8Melbourne 5.3 4.7 14.9 8.5 11.3 14.1 22.1 16.4 11.5 15.5Perth 7.7 4.0 14.1 5.9 8.4 13.8 19.4 16.2 20.6 19.0Sydney 9.2 3.0 2.9 5.6 7.0 3.6 13.5 8.6 2.5 4.0
  • 14. Airport Monitoring Report 2011-12 SummaryxiiiSummary - Airport Monitoring 2011-12Prices, revenue, margins and quality of service foraeronautical servicesDemand for aeronautical servicesIn 2011-12 demand for aeronautical services increased at all airports except Adelaide Airport.Growth in total passenger numbers was relatively flat at Melbourne and Sydney airportsincreasing by 0.2 per cent and 0.1 per cent respectively. Growth was stronger at BrisbaneAirport (4.6 per cent) and Perth Airport (16.3 per cent).Passenger numbers at Adelaide Airport fell by 4.0 per cent compared with 2010-11. It is likelythat a number of factors may have contributed to the drop in passenger numbers at AdelaideAirport, including subdued economic conditions, Tiger Airways ceasing operations at the airportfrom July 2011 and the Qantas grounding and associated industrial action.2Perth and Brisbane airport have experienced strong growth in domestic passenger numbers.Falls in domestic passenger numbers at Sydney and Melbourne airports were off-set by highernumbers of international passengers.Section 1.4.1 discusses airport throughput levels at monitored airports.Total and average revenues and pricesAll airports other than Adelaide Airport earned higher aeronautical revenues during 2011-12.In 2011-12, higher average prices at Sydney and Melbourne airports contributed to solid growthin aeronautical revenues of 3.6 per cent and 5.0 per cent respectively despite relatively lowgrowth in passenger numbers.Higher average prices and an increase in passenger numbers at Brisbane Airport during2011-12 contributed to a strong increase in aeronautical revenues of 7.0 per cent.Perth Airport reported a slight fall in aeronautical revenue per passenger (average prices)(-1.6 per cent) but significantly higher total aeronautical revenues (14.5 per cent) due mainly tostrong growth in total passenger numbers.At Adelaide Airport, lower average prices and a fall in passenger numbers resulted in loweraeronautical revenues (-9.3 per cent).Sections 1.4.2 and 1.4.3 describe total aeronautical revenues and average prices at monitoredairports.2Tiger Airways re-commenced operations at Adelaide Airport after the end of the 2011-12 financial year.
  • 15. Summary Airport Monitoring Report 2011-12xivAeronautical marginsSydney and Brisbane airports were the only two airports to report higher aeronautical operatingmargins per passenger during 2011-12.At Sydney Airport, aeronautical operating margins per passenger increased 6.4 per cent due tohigher increases in revenue than costs and comparatively low growth in overall passengernumbers.At Brisbane Airport, higher aeronautical revenue per passenger coupled with loweraeronautical operating expenses per passenger resulted in an increase in operatingaeronautical margins per passenger of 9.2 per cent.Adelaide, Melbourne and Perth airports experienced falls in aeronautical operating margins perpassenger of 14.8 per cent, 9.9 per cent and 12.5 per cent respectively.At Melbourne Airport, an increase in average aeronautical revenues per passenger of4.8 per cent was not enough to offset the effects of an increase in aeronautical operatingexpenses of 17.3 per cent. Higher depreciation and salaries contributed to higher costs atMelbourne Airport.At Adelaide Airport, aeronautical margins per passenger fell as aeronautical revenues perpassenger decreased while operating expenses per passenger increased by 2.4 per cent.At Perth Airport, aeronautical margins per passenger fell as aeronautical revenues perpassenger fell 1.6 per cent while operating expenses associated with the airport’s expansionincreased.Section 1.4.5 presents an analysis of aeronautical margins at monitored airports.Returns on assetsSydney and Brisbane airports recorded slightly higher returns on aeronautical assets in2011-12 relative to 2010-11, consistent with the changes in aeronautical operating margins.Returns fell at the other three monitored airports.In the 2009-10 and 2010-11 AMRs, the ACCC noted that airports are partially insulated fromthe effects of economic shocks (such as the global financial crisis and natural disasters) thatcan reduce demand for air travel.Section 1.4.6 describes returns on assets at monitored airports.Quality of servicesThe overall ratings for quality of service (that is, quality of service ratings based on objectiveindicators and responses from surveys of airlines, passengers and border agencies) fell at allmonitored airports during 2011-12, with each airport receiving an overall rating of satisfactory.For the first time since 2007-08, none of the airports achieved an overall rating of good (that is,a rating equal to 4.0 or higher).Adelaide Airport’s rating by passengers and airlines decreased within the satisfactory category.Passengers rated Adelaide Airport lowest along with Sydney Airport while airlines rated ithighest for quality of service provided to airlines.
  • 16. Airport Monitoring Report 2011-12 SummaryxvBrisbane Airport achieved highest overall rating among monitored airports. Passengers’ ratingdropped slightly within the good range while airlines’ ratings decreased but remainedsatisfactory. Airlines’ rating for runway availability fell significantly in 2011-12 to poor after itwas rated good in 2010-11. Brisbane Airport was ranked highest by passengers and secondhighest by airlines.Melbourne Airport’s rating by passengers decreased slightly in 2011-12, though remainedgood. Airlines’ ratings increased within the satisfactory range. Passengers rated MelbourneAirport second among the five monitored airports while airlines ranked it third.Perth Airports’ average passenger rating decreased from good in 2010-11 to satisfactory in2011-12. Airlines’ rating for Perth Airport remained poor. Passengers rated Perth Airport thirdwhile airlines rated it last for quality of service provided to airlines.Sydney Airport had the lowest overall rating among monitored airports for 2011-12.Passengers’ rating increased within the satisfactory range in 2011-12. Sydney Airport was theonly airport that received an increased passenger rating in 2011-12. Airlines’ rating decreasedfrom satisfactory in 2010-11 to poor in 2011-12. Passengers rated Sydney Airport, along withAdelaide Airport, lowest among monitored airports while airlines rated it second lowest.Section 1.5 presents an analysis of quality of service outcomes for all monitored airports.Emerging capacity constraints in aeronautical infrastructureWhile in 2011-12 passenger numbers fell at Adelaide Airport and were essentially flat atMelbourne and Sydney airports, the monitored airports as a whole have experienced significantgrowth in passenger numbers in recent years.Total passenger throughput at the five monitored airports has increased by 71.1 per cent since2001-02, with passenger numbers increasing from 62.1 million in 2001-02 to 106.3 million in2011-12. Aircraft movements have increased by 30.7 per cent over the same time period,increasing from 733 694 in 2001-02 to 958 863 in 2011-12.It is likely that further investment will be required by the monitored airports over the next fewyears to ensure that aeronautical capacity is sufficient to accommodate the future needs ofusers.Forecasts of continued growth in passenger throughput and aircraft movements at themonitored airports suggests that existing aeronautical infrastructure is likely to be underincreasing pressure in the medium to long term. The Bureau of Infrastructure, Transport andRegional Economics (BITRE) has projected that by 2031 total passenger throughput at the fivemonitored airports will increase by 103.8 per cent, from 106.3 million passengers in 2011-12 to216.7 million passengers in 2030-31.3BITRE also projected that by 2030, total aircraftmovements at the five monitored airports will increase by 55.5 per cent, from 958 863movements in 2011-12 to just under 1.5 million movements in 2029-30.4If unaddressed, congestion issues will have direct impacts on users of the airports, as well asindirect impacts on the economy more broadly. Australia’s major airports are a significantcomponent of the national transport infrastructure, facilitating the movement of people and thesupply of goods and services. As a result, the major airports make a considerable contributionto Australia’s overall economic prosperity. Notably, the direct contribution of the air and space3Bureau of Infrastructure, Transport and Regional Economics, Research Report 133: Air passenger movementsthrough capital and non-capital city airports to 2030-31, November 2012.4Bureau of Infrastructure, Transport and Regional Economics, Research Report 117: Aircraft movements throughcapital city airports to 2029-30, April 2010.
  • 17. Summary Airport Monitoring Report 2011-12xviindustry to the Australian economy in the year ending 30 June 2012 was approximately$7.1 billion, or approximately 0.5 per cent of Australia’s Gross Domestic Product.5Despite investment in aeronautical assets over the last 11 years, there is evidence of emergingsystem-wide congestion at Australia’s monitored airports. According to the BITRE, betweenNovember 2003 and January 2013, the proportion of domestic flights that arrived on-time fell,on average, 11.4 per cent while the proportion of domestic flights that departed on-time fell8.9 per cent across monitored airports. At the same time the number of flights into and out ofthe monitored airports has increased markedly.6The government’s pricing principles for Australian monitored airports provide for the use ofpeak-period pricing to deal with the effects of congestion. It is noted, however, that monitoredairports have preferred to ration excess demand through slot management schemes based ongrandfathered landing rights. The use of grandfathered quantity rationing systems may havethe effect of discouraging efficient new entry.In the long run, the most efficient way for airports to respond to congestion is to invest in newinfrastructure to accommodate the increase in demand. A number of airports have noted theemergence of capacity constraints and the need for additional capacity.Melbourne Airport has noted that investment to expand runway capacity will be required beforethe end of the decade in order to meet growing demand. Brisbane Airport has stated that itexpects the growth in air travel to start exceeding the capacity of its current runway systembetween 2013 and 2015. Perth Airport has noted that demand concentration during peakperiods is placing pressure on its infrastructure.7In respect of Sydney Airport, the report to the Australian and NSW governments by theSteering Committee of the Joint Study on aviation capacity in the Sydney region concluded thatimmediate action is needed to increase Sydney Airport’s capacity to meet growing demand.The Steering Committee concluded that from around 2030, an additional airport will be neededto supplement the capacity of Sydney Airport.8Section 2.3 discusses evidence of congestion at monitored airports.Master planning process at Australian airportsTo ensure that airports continue to invest in airport infrastructure, the government requiresairports to prepare master plans and major development plans, so that airports can indicate theareas where investments will be undertaken. These plans also require public consultation, sothat users can express views to the airports and the Government about where investmentshould be targeted to meet their needs.Under the Airports Act 1996 (Airports Act), Australian airports are required to establish a20 year forward-looking master plan, which identifies, for example, development objectives andfuture aviation requirements. Master plans are updated by the airports every five years andhave to be approved by the Minister for Infrastructure and Transport (the Minister). The fivemonitored airports have master plans in place which are due to be updated over the next twoyears.5ABS, Australian National Accounts, National Income, Expenditure and Product (ABS cat. no. 5206.0, June 2012,Table 45).6Bureau of Infrastructure, Transport and Regional Economics, Domestic airline on time performance, December 2003and December 2012.7Perth Airport, Submission to ACCC Airport Monitoring Report, 28 September 2012. See also Brad Geatches, PerthAirport challenges, West Australian Perth, 15 October 2012.8Steering Committee, Joint Study on aviation capacity in the Sydney region, March 2012.
  • 18. Airport Monitoring Report 2011-12 SummaryxviiThe Government stated in its 2009 National Aviation Policy White Paper (the White Paper) thatimproved planning is one of its policy goals for Australian airports, in order to facilitate betterintegration and coordination with off-airport planning and to facilitate continued investment inAustralia’s airport infrastructure and land transport links.9Following the release of the WhitePaper, the Government has increased the requirements for airports to consult and engage withthe broader community throughput the planning process.Airports must also prepare major development plans for major projectsUnder the Airports Act, Australian airports are also required to prepare a major developmentplan for each major individual development at an airport, including aeronautical andnon-aeronautical projects. Airports must undertake public consultation on draft majordevelopment plans before submitting the plan to the Minister for approval.Planning for future investment in aeronautical servicesThe monitored airports have plans to invest in aeronautical assets over the next few years, inorder to expand aeronautical capacity.Brisbane Airport has recently completed the detailed design for the first construction phase ofits new parallel runway and has commenced civil works. Brisbane Airport has proposed thatconstruction will be completed by 2020.In November 2012, Melbourne Airport announced its preferred orientation for a third runway,with its proposal to be outlined in its 2013 master plan.10Melbourne Airport noted that a thirdrunway will be required from around 2018-22 to meet the growing demand for access to theairport.Perth Airport has planned a number of projects within the international terminal followingopening of a new domestic terminal in March 2013, including an expansion and redesign of theinternational arrivals area and the departures customs, security screening and lounge areas. Ithas been reported in the media that Perth Airport has commenced planning for a thirdrunway.11Sydney Airport, while constrained by legislative requirements from increasing runway capacity,is planning to undertake a number of initiatives, including a proposed reconfiguration of thecurrent domestic and international precincts.12ACCC to monitor and report on airports’ investment projectsThe ACCC intends to track progress by airports in implementing investment plans. FutureAMRs will assess and report on the extent to which planned investments are taking place.Chapter 2 presents an in-depth analysis of emerging capacity constraints on the supply ofaeronautical services and future investment needs at monitored airports.9Australian Government, National Aviation Policy White Paper, December 2009.10Melbourne Airport, Melbourne Airport announces third runway preference, Media Release, 20 November 2012.11Examples include; Geoffrey Thomas, Airport had warning of chaos, West Australian, 12 October 2012 and; BradGeatches, Perth Airport challenges, 15 October 2012 and; Natalie Gerritsen, Perth unlocks keys to terminal, AustralianFinancial Review, 8 January 2013.12Sydney Airport, New Vision To Integrate International , Domestic and Regional Services, 5 December 2011, viewedon 9 January 2013 at; http://www.sydneyairport.com.au/corporate/media-centre/media-releases/media-release-detail.aspx?item=%7B19FE83DF-66A6-49CA-A219-72C3A4A4C7E0%7D&lst=%7BC313C142-0E4E-4269-A2FB-BDEB95B3BC9E%7D.
  • 19. Summary Airport Monitoring Report 2011-12xviiiPrices, revenue, margins and capacity for airport carparkingThe ACCC monitors on-airport car parking prices and revenues, costs and profits associatedwith on-airport car parking for all monitored airports.The ACCC also collects information on charges imposed by airports on operators of alternativeservices to on-airport car parking as well as the amount of revenue received from thoseoperators. Alternatives to on-airport car parking include taxi services, limousine and hire carservices, and private and public bus services.By imposing excessive charges or restrictive terms and conditions for landside access, airportscould potentially obstruct competition from alternatives to on-airport car parking. This couldhave the effect of shifting demand from those alternatives to an airport’s own car parkingservices, and allow the airport to charge higher prices.However, it is important to note that, for the reasons outlined at the end of this chapter, careneeds to be taken when interpreting the levels of on-airport car parking and landside accessprices, revenues, costs and profits, and when making comparisons of performance across themonitored airports and over time.Because of the many different types of price points available on car parking (that is, differentprices per different lengths of car park stays), it is not possible to make reference to an averageprice for car parking. Instead, car parking revenue, costs and margins per car park space areused as indicators of unit revenue, unit costs and unit margins.Prices and RevenuesAt Brisbane, Melbourne Perth and Sydney airports car park revenues increased in 2011-12 dueto a combination of higher car parking charges and increased demand. See Table 3 in the KeyFindings for data on car parking prices and revenues.Perth Airport reported a 23.2 per cent increase in revenues as a result of increases in car parkprices in three of the four price points shown in Table 3 in the Key Findings and an increase of7.4 per cent in the number of car park spaces.Brisbane and Sydney airports recorded slight increases in revenue (up 1.4 per cent and2.5 per cent respectively) and large increases in the number of car park spaces (up31.7 per cent and 6.9 per cent respectively).Melbourne Airport’s car parking revenues were largely unchanged in 2011-12. Two of the pricepoints were increased and the number of car spaces decreased by 2.2 per cent. In 2011-12,Melbourne Airport earned the highest revenues from car parking ($114.7 million) and thehighest proportion of total airport revenue from car parking (20 per cent).Car parking prices did not change at Adelaide Airport which recorded a fall in car parkingrevenues of 4.9 per cent.Section 3.3 describes prices charged for car parking at monitored airports, while section 3.4discusses revenues earned by airport operators from their car parking businesses.MarginsTwo airports, Adelaide and Brisbane, experienced a fall in margins earned on their car parkingoperations. Adelaide and Brisbane airports recorded falls in margins, of 10.0 per cent and
  • 20. Airport Monitoring Report 2011-12 Summaryxix11.8 per cent respectively, and in margins per car park space of 10.1 per cent and33.0 per cent respectively.Sydney Airport reported a rise in total margins of 0.4 per cent but, because of a rise of6.9 per cent in the number of car park spaces, margins per car park space fell 6.1 per cent.Despite this, Sydney Airport continued to earn the highest margin per car park space with$5 290.Perth Airport car parking margins increased 24.3 per cent while margin per car park spaceincreased 15.8 per cent.Melbourne Airport car parking margins were largely unchanged from 2010-11 levels butremained the highest among monitored airports ($86.4 million).Section 3.4 assesses margins earned on car parking facilities at monitored airports.Landside servicesRecent trends in landside access prices and revenuesThe ability of operators of landside alternatives to on-airport car parking, such as taxis, trains,off-airport car parking, buses and hire cars, to supply these services depends on whether theycan have access to airport land, and on the terms and conditions of access.Airports control access to airport land, and the associated terms and conditions of access, andso have the ability to influence the level of competition between on-airport car parking andother off-airport landside alternatives.Results of monitoring charges and revenues associated with landside access include:Three airports, Brisbane, Perth and Sydney, increased some charges while Melbourne andAdelaide airports left all landside access charges unchanged in 2011-12.Total landside revenue increased at all airports other than Adelaide Airport. Total revenueearned from landside access operations at all airports increased by almost 20 per cent toaround $28.7 million in 2011-12.Revenue at Brisbane, Melbourne and Perth airports increased 9.2 per cent, 6.4 per cent and10.1 per cent respectively. Sydney Airport’s revenue from landside access was the highest ofall five airports at about $13.3 million, increasing by around 36.9 per cent in 2011-12. SydneyAirport accounted for around 46 per cent of the combined land-side revenue earned bymonitored airports.Section 3.6 presents additional information on landside charges and revenues.Investing in landside servicesProjected growth in passenger numbers will also increase demand for landside access atmonitored airports. This will create the need for investment in car parking facilities, terminalroads, kerbside management, and other facilities used by landside operators supplyingalternatives to on-airport car parking.An airport’s landside infrastructure can be broadly categorised as that existing within an airportand immediately adjacent to the airport precinct. Landside infrastructure within an airportbroadly consists of car parks, taxi holding areas, train platforms and other facilities, pick-up anddrop-off areas and roads surrounding the terminals and connecting the airport to the majorroads outside of the airport precinct. Beyond the airport boundaries, landside infrastructureconsists of road and rail networks used by consumers to access the airport.
  • 21. Summary Airport Monitoring Report 2011-12xxAs noted, several major investment projects are underway or have recently been completed bythe monitored airports. Looking forward, it will be imperative that the airports liaise with usersand governments to develop appropriate landside solutions to address growth. Suchengagement with stakeholders will ensure landside developments are fit for purpose, deliversufficient spare capacity and integrate with wider infrastructure networks.Section 3.8 analyses possible capacity issues at landside facilities including future investmentrequirements in section 3.8.1.Cooperation is necessaryPlanning, collaboration and investment in landside facilities, particularly those transportationnetworks outside of airport borders, will be required to complement significant airside capacityexpansion and aeronautical growth at airports.Establishing efficient landside networks for getting to and from an airport requires input from anumber of parties such as airports, landside operators, state governments and theCommonwealth. As airports continue to grow, and the surrounding landside infrastructurebecomes increasingly congested, effective cooperation between responsible parties will beimportant to implement effective landside solutions.It will be important that the airports liaise with users and governments to develop appropriatelandside solutions to address forecast growth, to ensure that they are fit for purpose and deliversufficient spare capacity.Section 3.8.2 discusses investment planning processes for landside facilities.Monitoring investment outcomesTo improve the scope and ability for the ACCC to assess the airport operator’s performanceand progress against investment plans, this year’s airport monitoring program was extended tocollect details of completed, ongoing and planned investment in landside infrastructure.By reporting on progress with airport investment, the AMR can provide further observations ofhow airports are responding to any congestion issues at the landside and whether there areissues outside the airport boundaries that are influencing the efficiency of landsideinfrastructure networks.This information, in conjunction with the airports’ own master plans, will assist in assessing theextent to which the airports are meeting the needs of their users.The ACCC’s role in monitoring aeronautical and carparking servicesThe ACCC’s monitoring role for the major airportsIn a number of inquiries into the economic regulation of airport services, the most recent ofwhich was in 2011, the PC has reiterated that airports monitored by the ACCC have marketpower. According to the PC “...the market power of Sydney, Melbourne, Brisbane and PerthAirports is sufficient to warrant policy attention”.13Airports control access to the keyinfrastructure necessary for air transportation and for users of airports to access terminals. Inmany cases, there is a lack of practical alternatives for travelling overseas and the largedistances between capital cities. Consequently, the air transportation industry plays a pivotal13Productivity Commission, Economic Regulation of Airport Services, Inquiry report No. 57, Canberra, December 2011.
  • 22. Airport Monitoring Report 2011-12 Summaryxxirole in the Australian economy in facilitating travel as well as movement of time sensitive goodsand services.Due to concerns that airports could use their position to earn monopoly profits to the detrimentof Australians, the Australian Government has directed the ACCC to monitor the quality, prices,costs and profits relating to the supply of aeronautical and car parking services by Australia’sfive major airports—Adelaide, Brisbane, Melbourne (Tullamarine), Perth and Sydney (KingsfordSmith) airports.The government established a price monitoring approach to regulating airports in 2002following consideration of the recommendations of a PC inquiry. The move from a priceregulation regime to a monitoring regime was intended to facilitate investment and innovation,while retaining a constraint on the exercise of market power by the airports in their dealingswith airlines and other customers. In responses to subsequent PC inquiries in 2006 and 2011,the government has reiterated its commitment to the continuation of the airports monitoringprogram.The ACCC is also required to monitor the quality of service in relation to the provision ofprescribed aspects of airport services and facilities by those airports.Productivity Commission 2011 inquiry into the economic regulation of airportservices and the Government’s responseDuring 2010, the government responded to concerns raised by the ACCC in relation to its2008-09 AMR. These concerns included that Sydney Airport had potentially increased profitsby permitting service-quality standards to fall below that which could be expected in acompetitive environment over a sustained period.The 2011 PC report into the economic regulation of airport services concluded that Brisbane,Melbourne, Perth and Sydney airports retain sufficient market power to be of policy concern.14The PC recommended that the current monitoring program should continue to operate until atleast 2020.The government agreed in principle with the PC’s recommendations to continue monitoring ofairports by the ACCC and that the next review of the monitoring program should be done in2018.Limitations of monitoringMonitoring of itself does not restrict airports from using their monopoly position to increaseprices and/or lower service standards.Monitoring is limited in its scope to undertake a detailed assessment of the performance ofairport operators. The results from monitoring do not provide conclusive evidence as to whetherairport operators are exercising market power. For example, it is not possible to determinewhether airports are earning monopoly rents from information obtained through the monitoringprogram. A more detailed evaluation of the airports’ performance would be required to makemore definitive findings, including a comparison with economically efficient benchmarks.However, such an evaluation is beyond the scope of monitoring. Among other things, withinaccepted accounting conventions airports have discretion on asset values. This limits theusefulness of data on returns on assets as an indicator of economic performance.14Productivity Commission, Economic Regulation of Airport Services, Inquiry Report No. 57, Canberra, December2011.
  • 23. Summary Airport Monitoring Report 2011-12xxiiImportantly, monitoring does not directly restrict the airports from increasing prices and/orlowering service standards and does not provide the ACCC with a general power to intervenein the airports’ conduct in setting of terms and conditions of access.For these reasons, monitoring is not effective in addressing the policy concern that anunconstrained airport presents and is not a substitute for effective regulation.That said, monitoring allows the performance of airports to be considered based onobservations from the monitoring results over time. It is possible for the ACCC to make generalobservations about whether certain outcomes might be consistent with firms with marketpower. For example, the ACCC may express concerns about an airport’s performance whereprices increase while quality of service is observed to have remained constant or even fallenbelow satisfactory, over a sustained period of time.By providing a greater level of transparency to the airports’ performance, monitoring also seeksto address information asymmetries that may exist between airports and its customers.Analysis and interpretation of monitoring resultsPresentation of data and charts in the 2011-12 reportThe 2010-11 AMR presented most charts and tables with airport data commencing from2006-07.In the current AMR, the time series presented and discussed in the accompanying notesextends from 2001-02 to 2011-12, representing 11 years of data.The ACCC believes that an appropriate period to assess trends over time is for data to bepresented from 2001-02 to 2011-12. The change to presenting data with a longer time seriesenables analysis of pricing and long term asset values and changes over time. Airport assetsare usually long-term investments. Where practicable, long-term time series, such as datacovering the period from 2001-02 is presented in both nominal and real terms.Monitoring prices, profits and quality of aeronautical servicesA number of indicators have been developed to monitor prices, profits and quality ofaeronautical services.The ACCC publishes a schedule of prices charged by each airport for the supply ofaeronautical services (see chapters 4-8). Airports provide many different types of services withcharges levied on different bases - such as on a per passenger basis or by aircraft weight.Further, airports might offer discounts for certain periods or to certain users, or there might beminimum and maximum charges in place which affect some users but not others.In addition, the price changes for particular airport users might vary depending on thecomposition of the airport services they utilise, the times at which they use them and so on. Forexample, the costs to an airline of a domestic flight are likely to be different to those associatedwith an international one due to differing security and processing requirements. Similarly,changes in price structure by an airport might affect users in different ways—even to the pointof effectively lowering the costs for one user while raising them for another.For these reasons, it is difficult to aggregate all services and prices into a single average priceof aeronautical services for monitoring purposes. The lack of a single aggregate pricecomplicates the task of establishing trends over time given and comparing prices acrossairports.
  • 24. Airport Monitoring Report 2011-12 SummaryxxiiiGiven these complications, the ACCC’s primary measure of average airport prices isaeronautical revenue per passenger. This relies on a consistently defined service definition andprovides a measure of the cost to airlines expressed in terms of the most significant chargingunit.Similarly, when measuring net earnings, the ACCC has relied on aeronautical operatingmargins per passenger as an indicator of unit profits and return on aeronautical assets as anindicator of profitability.Measures of service quality include survey ratings by airlines, passengers and border agenciesas well as objective indicators.Caveats - monitoring costs and profitsAs noted, care should be taken when making comparisons of performance across airports andover time. There are many factors that may influence the price and quality of service monitoringresults.The price, cost and profit data presented in this report is based on accounting data provided bythe monitored airports. The main caveats for price monitoring results include:• difficulties in consistently reporting financial information because of changes in legislationand regulations that can affect how items are reported (including in accounting practicessuch as the transition to Australian equivalents to International Financial ReportingStandards in 2005–06)• indicators of profitability based on accounting data in particular are not effective measuresof economic performance and only provide guidance on trends in operating performanceover time• airports’ return on assets can be significantly affected by the discretion they have on assetrevaluations. This affects the usefulness of analyses of rates of return on assets forassessing economic performance and also complicates comparisons of changes in rates ofreturn over time and across airports.A change in the definition of aeronautical services and non-aeronautical services in 2007–08 bythe Australian Government significantly affected how revenues are reported and reduced thecomparability of airports’ revenues with prior years.As with other multi-product firms, airports incur a range of costs that are common acrossaeronautical and non-aeronautical services. As there is no economically meaningful way ofallocating common costs to individual products and services, allocation of expenses to differenttypes of services requires some discretion by the airport operators, which in turn can influencemeasures of profitability of services.Financial indicators can provide useful insights into the operational performance of airportsover time. However, they should not be interpreted in isolation as they only provide a partialindication of performance and are not definitive. Trends of operational performance acrossairports are more reliable if comparable results are present for a range of relevant indicators.For example, the ACCC employs a number of indicators to measure profitability to account fortheir respective limitations. Aeronautical operating margin per passenger is used by the ACCCas a measure of unit profits. However, this measure does not make an allowance forrisk-adjusted returns on capital associated with the provision of services.The ACCC also uses return on average assets as an additional measure of profitability,although this measure is likely to vary according to the stage of a given airport’s investment
  • 25. Summary Airport Monitoring Report 2011-12xxivcycle. In addition, rates of return can also be affected by different asset valuationmethodologies employed by airports. Among other things, airports’ upward revaluation ofassets might lower measures of return on average assets. This can possibly distortcomparisons across airports and over time.In order to establish asset values to facilitate the monitoring of rates of return a ‘line in the sand’measure was reported for the first time in the 2007–08 ACCC AMR. The line in the sandapproach removes for monitoring purposes the effects of revaluations of aeronautical assets byairports after 30 June 2005. This approach, however, may also be affected to the extent thatairport operators had chosen to revalue assets prior to this cut-off date.Another reason that may make comparisons across airports difficult is the fact that the ACCC’smonitoring role for aeronautical services relates only to those terminals that are owned andoperated by the monitored airports. However, some of the airports’ domestic terminals, such asthe Qantas and Virgin Australia domestic terminals at Brisbane Airport are leased and operatedby those airlines and are not subject to the ACCC’s monitoring. Therefore the revenues, costs,profits and quality of service associated with those terminals are not included in the monitoringresults presented in this report.15Caveats - monitoring quality of serviceThe provision of airport services can be influenced by different parties and, therefore,interpretation of the quality of service results need to take these different factors into account.Indeed, airport services are commonly the combined responsibility of a number of entities—including airlines, government agencies, the airport operator and sub-lessees of the airportoperator.The quality of service results should not be considered in isolation of other indicators as doingso can result in misinterpretation of the outcomes. The objective measures of quality of servicemay provide useful context to the understanding of survey results and should therefore beinterpreted in conjunction with each other.15Note that the rent charged by the Airport operators to Airlines such as Qantas and Virgin for the use of the terminal isincluded in non-aeronautical revenue.
  • 26. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services11 Overview of the monitoring resultsfor aeronautical servicesKey pointsTrends in prices, costs and margins for aeronautical services• With the exception of Adelaide Airport, passenger numbers increased at the monitoredairports in 2011-12. Sydney Airport has had the highest passenger throughput in everyyear since 2001-02, while Perth Airport has had the highest growth in passengerthroughput since 2001-02.• Domestic passenger numbers fell but international passenger numbers increased in2011-12 at Australia’s two largest airports at Sydney and Melbourne. On the other hand,domestic passenger travel made significant contributions to the strong growth in passengernumbers at Perth and Brisbane airports.• Aeronautical revenue per passenger (an indicator of average prices) fell at Adelaide andPerth airports but rose at the other monitored airports.• Sydney Airport remained the airport with the highest aeronautical revenue per passenger at$14.95 per passenger compared with the second highest at Adelaide Airport with $11.01per passenger.• Adelaide, Melbourne and Perth airports reported a decrease in aeronautical operatingmargin per passenger (an indicator of profitability), while Brisbane and Sydney airportsreported an increase in aeronautical operating margin per passenger.• Sydney Airport continued to be the airport with the highest aeronautical margin perpassenger at $7.33 per passenger compared with the second highest at Adelaide Airportwith $4.53 per passenger.Trends in quality of service for aeronautical services• Overall quality of service ratings, based on objective indicators and encompassing theviews of airlines, passengers and border agencies, decreased for all monitored airports in2011-12, though all airports remained rated as satisfactory.• Sydney Airport recorded the lowest ratings in terms of overall quality of service for theseventh consecutive year.• Airlines’ ratings, which can provide a more direct indication of the quality that the airportoperators provide, decreased at Adelaide, Brisbane and Sydney airports in 2011-12.Airlines’ rating of Melbourne Airport’s quality of service increased, and remainedunchanged at Perth Airport.Price and quality ratings for the airports• Sydney Airport had the highest aeronautical revenue per passenger and the lowest overallrating for quality of service in 2011-12.• In contrast, Melbourne Airport had the lowest aeronautical revenue per passenger and wasthird behind Brisbane and Adelaide airports for overall quality of service.
  • 27. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1221.1 IntroductionThis chapter presents observations on the performance of Adelaide, Brisbane, Melbourne(Tullamarine), Perth and Sydney (Kingsford Smith) airports in relation to the supply ofaeronautical services.For the purposes of the ACCC AMRs, aeronautical services are defined as services providedby airport infrastructure to facilitate air transportation of passengers and freight. Underregulation 7.02 of the Airports Regulations 1997, aeronautical services and facilities are definedas “services and facilities at an airport that are necessary for the operation and maintenance ofcivil aviation at the airport”. These include services and facilities listed in the tablesaccompanying the regulations: aircraft-related services and facilities such as runways,taxiways, and passenger-related services and facilities such as public areas in terminals,departure and holding lounges.Section 2 describes terminal configurations at different airports. Section 1.3 provides some keyobservations about the performance of each of the monitored airports during 2011-12. Keyindicators relating to activity, prices, revenues, costs, margins and investments for aeronauticalservices are discussed in section 1.4, showing changes in indicators over time in nominalvalues, as well as inflation-adjusted values. Section 1.5 presents the quality of service results,while section 1.6 compares the airports’ price and quality of service outcomes for the mostrecent year (2011-12).More detailed information about the monitoring results for aeronautical services since 2001-02is provided on an airport-by-airport basis in chapters 4 to 8. Monitoring data going back to2001-02 is presented in order to provide an analysis of long-term trends. Aeronautical assets,such as terminals and runways, are generally long-lived assets, and long-term analysis canprovide an indication of the adequacy of these investments over time.Appendices A.1 and A.2 of this report provide the individual airports’ regulatory accounts anddetailed information on the airports’ indicators and statistics used in this report. For detailsregarding the approach taken by the ACCC in preparing the measures used in this report, aswell as a full list of aeronautical services covered by the monitoring program, see appendicesA.4 to A.7.1.2 Airport terminal configurationsThe monitored airports have considerably different terminal configurations. Some airports offera combined terminal for international and domestic passengers, while others have separateterminals.Importantly, some of the domestic terminals at the monitored airports are leased and operatedby airlines under domestic terminal leases (DTLs). Under DTLs, airlines operate their terminalsindependently of the airports and have greater discretion over the quality of services andfacilities offered.16The existence of DTLs at some of the monitored airports complicatescomparisons of monitoring results across airports (see box 1.2.1)The various terminal configurations offered by the monitored airports and the DTLs that applyare outlined in table 1.2.1.16For more detailed information on the implications of domestic terminal leases, see chapter 3 of the ACCC’s AirportMonitoring Report 2008-09.
  • 28. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services3Table 1.2.1: Terminal configurations at the monitored airportsAirport Terminal configuration Domestic terminal leases (DTLs)Adelaide One multi-user integrated terminal (T1) thatservices international, domestic and regionalpassengersNone (expired February 2006)Brisbane One international terminal and one domesticterminalThe majority of the domesticterminal is occupied by Qantasand Virgin Australia under DTLs(expires December 2018)Melbourne One international terminal and three domesticterminals as follows:• T1—Qantas domestic terminal• T2—international terminal• T3—common-user domestic terminal (VirginAustralia, Regional Express and Skywest)• T4—common-user domestic terminal (TigerAirways)T1 (Qantas domestic terminal)(expires December 2018)Perth One international terminal and two domesticterminals as follows:• T1—international terminal• T2—Qantas domestic terminal• T3—common-user domestic terminal (TigerAirways, Virgin Australia and others)T2 (Qantas domestic terminal)(expires 2018)Sydney One international terminal and two domesticterminals as follows:• T1—international terminal• T2—common-user domestic terminal (TigerAirways, Jetstar, Virgin Australia, RegionalExpress and others)• T3—Qantas domestic terminalT3 (Qantas domestic terminal)(expires June 2019)
  • 29. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-124Box 1.2.1: Domestic Terminal LeasesComparisons of airports’ revenues, prices, costs, margins and quality of service arecomplicated by domestic terminal leases (DTLs) at some of the monitored airports.The direction issued to the ACCC under s.95ZF of the CCA to undertake airport monitoring upto 2011-12 (Direction No 29) relates to aeronautical and car parking services and facilitiesprovided by Sydney Airport Corporation Limited (Sydney Airport), Australia Pacific AirportsCorporation Limited (Melbourne Airport), Brisbane Airport Corporation Pty Limited (BrisbaneAirport), Perth Airport Pty Ltd (Perth Airport) and Adelaide Airport Limited (Adelaide Airport).The Airports Regulations 1997 define aeronautical services and facilities to include bothaircraft-related and passenger-related services and facilities provided at an airport.17However,the ACCC’s monitoring program does not include passenger-related services and facilities thatare provided within a terminal that is occupied and operated by an airline under a DTL.Therefore, the revenues, prices, costs, margins and quality of service associated with thepassenger-related services and facilities provided within these terminals are excluded from theresults presented in this report.18Adelaide Airport is the only monitored airport that does not have any DTLs. Adelaide Airportopened its multi-user terminal in October 2005, with Qantas transferring its domestic operationsfrom the terminal that it occupied and operated under a DTL to the new terminal in February2006. Therefore, monitoring data collected from Adelaide Airport prior to February 2006 doesnot include data on passenger-related services and facilities provided within the domesticterminal operations of Qantas. This contributed to Adelaide Airport reporting significantincreases in aeronautical revenue, expenses and margins in 2005-06 and 2006-07, as data onpassenger-related services and facilities previously provided within the domestic terminaloperations of Qantas were included in the monitoring programme for the first time.1.3 Key observations from the monitoring results foraeronautical servicesIn performing its monitoring role, the ACCC looks at levels and trends across a range ofindicators—including prices, costs, margins, returns on assets, investment and quality ofservice—at the individual airports. However, although observations from monitoring may raisesome concerns about an individual airport’s performance, monitoring does not allow a detailedassessment of the airport’s performance to be undertaken and cannot be used to conclusivelyestablish whether an airport has exercised market power to earn monopoly rents. Thelimitations of monitoring are set out in further detail in the executive summary, while appendixA.7 discusses the ACCC’s monitoring methodology.For the purposes of the discussion in this section, analysis of quality of service is focused onthe quality of service provided to airlines and on the results of the airline survey results, asairline ratings can provide a more direct indicator of the quality of service that the airportoperator provides. This is because airports provide services directly to airlines undercommercial arrangements and are in a position to make an informed assessment of qualityagainst price.17Aeronautical services and facilities have the meaning given by regulation 7.02A of the Airports Regulations 1997.18For more detailed information on the implications of domestic terminal leases, see chapter 3 of the ACCC’s AirportMonitoring Report 2008-09.
  • 30. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services5Given the complex nature of airports’ bundling of charges, and changes on the basis of howthese charges are applied, the ACCC adopts aeronautical revenue per passenger as anindicator of average prices that the airlines pay to airports. Aeronautical operating expensesper passenger are used as an indication of unit costs.It should be noted that aeronautical revenue and aeronautical operating expenses on a perpassenger basis include revenues and costs associated with the provision of governmentmandated security services. The revenues and costs associated with these services do notreflect decisions made by airport operators. Therefore, where appropriate, the discussion in thischapter and the individual airport chapters (chapters 4-8) also consider aeronautical revenueper passenger and aeronautical operating expenses per passenger excluding security.Unlike average prices and unit costs, aeronautical operating margin per passenger isdiscussed including security. This is because government mandated security revenue is set torecover the costs associated with security services and does not affect the overall profitabilityof the airports.The following sections outline some observations from the monitoring results for each of theairports.1.3.1 Observations about Adelaide AirportIn 2011-12, Adelaide Airport was the only monitored airport to report a decrease in passengernumbers, with passenger numbers decreasing by 4.0 per cent to 7.1 million passengers. Anumber of factors may have contributed to the drop in passenger numbers at Adelaide Airport,including subdued economic conditions, Tiger Airways ceasing operations at the airport fromJuly 201119and the Qantas grounding and associated industrial action.Declining passenger numbers impacted on Adelaide Airport’s aeronautical revenue during2011-12, with total aeronautical revenue decreasing by 9.3 per cent. The impact onaeronautical operating expenses was less pronounced, with total aeronautical operatingexpenses decreasing by 1.7 per cent.In 2011-12, Adelaide Airport’s aeronautical operating margin decreased by 18.3 per cent anddecreased by 14.8 per cent on a per passenger basis.As a measure of investment in aeronautical services, Adelaide Airport’s additions as apercentage of tangible non-current assets for aeronautical services have been relatively lowsince the completion of the new multi-user terminal in 2006. However, Adelaide Airport hasbegun to increase its additions over the last two years, with additions increasing to13.4 per cent of tangible non-current aeronautical assets in 2011-12. Adelaide Airport’sadditions during 2011-12 have mostly related to the landside infrastructure project, whichinvolved construction of a new car park and landside facilities.Chart 1.3.1 shows that since the opening of its new multi-user terminal in 2006, quality ofservice results improved significantly at Adelaide Airport and have on average been rated assatisfactory or above. This is in contrast with the period prior to the opening of the newterminal, when Adelaide Airport recorded poor quality of service results.19Tiger Airways re-commenced operations at Adelaide Airport after the end of the 2011-12 financial year.
  • 31. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-126Chart 1.3.1: Airlines’ average ratings for quality of service at Adelaide Airport,2001-02 to 2011-12It should be noted that following the release of the 2011-12 AMR, Adelaide Airport will berequired to join the second-tier price and quality of service reporting process established by theNational Aviation Policy White Paper in December 2009. This is a self-administered scheme,where the airport will be expected to disclose on its website:• prices of aeronautical services• prices of car parking services• various quality of service outcomes• airport complaint-handling processes and outcomes.The reasons for this change to the monitoring regime are discussed in more detail in AdelaideAirport’s individual airport chapter (chapter 4).1.3.2 Observations about Brisbane AirportIn 2011-12 over 21 million passengers travelled through Brisbane Airport, an increase of4.7 per cent over 2010-11 numbers. International passenger numbers increased 4.9 per cent in2011-12 while domestic passenger numbers increased 4.6 per cent. In 2011-12, almost78 per cent of passengers were travelling domestically, while just over 21 per cent wereinternational passengers. Both domestic and international travellers contributed to the increasein passenger numbers at Brisbane Airport in 2011-12. Since 2001-02 domestic andinternational travellers have contributed roughly equally to the 70.3 per cent growth inpassenger numbers. Since 2007-08 domestic passengers travelling through Brisbane Airporthave increased by 14.4 per cent compared with 7.5 per cent growth in internationalpassengers.Since 2001-02, Brisbane Airport’s quality of service indicators have been consistently rated assatisfactory to good. These quality of service trends were repeated during 2011-12.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingInternational terminal Domestic terminalAirside services and facilities Managements responsivenessExcellentGoodPoorVery poorSatisfactory
  • 32. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services7In 2011-12, Brisbane Airport increased prices for a number of services, while prices of otherservices were unchanged, such as landing fees, aircraft parking fees and noise surcharge.Airlines continue to rate Brisbane Airport’s quality of service as satisfactory orhigher but identify runway availability as a problemAverage quality of service ratings for Brisbane Airport have consistently been rated assatisfactory. Individual ratings have ranged from satisfactory to good over the period 2001-02 to2010-11. However in 2011-12, airlines changed their rating of runway availability whichdeclined from good to poor. Commentary from the airlines on this issue referred to significantdelays during peak periods. Some airlines noted that Brisbane Airport was taking measures toaddress the issue.Brisbane Airport has completed the detailed design for the first construction phase for a newparallel runway. Civil works have commenced and the new runway is expected to becommissioned in 2020. The ACCC notes the new runway was approved by the state andAustralian governments in 2007.Prior to 2011-12, airlines’ rating of the availability of check-in desks in 2003-04 and airlines’rating of the standard of aerobridges in 2007-08 were the only occasions when ratings wereless than satisfactory across the range of Brisbane Airport’s individual services and facilities.It is noted that recent media articles have stated that Brisbane Airport has been unable to reacha commercial agreement with airlines regarding the funding of its new parallel runway.20Theconstruction of this runway is unusual as it is spread over eight or nine years, with about halfthe cost being involved in preparing the site for the runway.Chart 1.3.2: Airlines’ average ratings for quality of service at Brisbane Airport,2001-02 to 2011-1221Chart 1.3.2 presents average quality of service indicators for Brisbane Airport as rated byairlines. Of the three average indicators presented, not one increased or decreased between20Robyn Ironside, Airlines angry at new toll, Courier Mail, Brisbane, 28 September 2012 and; Steve Creedy, Runwaybill irks carriers, The Australian, 5 October 2012.21Note that average measures for Brisbane Airport’s domestic terminal are not presented due to the unavailability ofsome individual quality of service indicators.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingInternational terminal Airside services and facilities Managements responsivenessExcellentGoodPoorVery poorSatisfactory
  • 33. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-128categories during 2011-12. Airline ratings for the international terminal increased slightly withinthe satisfactory category, while the rating for management responsiveness decreased slightlywithin the same category. There was a larger decrease in the rating for airside services andfacilities, primarily due to the decline in the airlines’ rating of runway availability.Brisbane Airport’s average prices and unit margins are higher, but is investingin aeronautical servicesBrisbane Airport’s aeronautical revenue per passenger increased by 2.2 per cent in 2011-12, to$10.02 per passenger. This is lower than the 4.7 per cent annual increase in aeronauticalrevenue per passenger in 2010-11.In 2011-12, Brisbane Airport’s aeronautical operating margin per passenger was $4.47,representing an increase of 9.2 per cent from 2010-11. This is the smallest annual increase forthe operating margin over the period from 2001-02 to 2011-12.Since 2001-02, Brisbane Airport’s aeronautical operating margin per passenger has increasedsignificantly. Brisbane Airport’s aeronautical operating margin per passenger was negative in2001-02, however, since 2002-03 aeronautical operating margin per passenger has increasedby 397.7 per cent. This increase is equivalent to an average annual increase of 19.5 per centper annum. When adjusted for inflation, this increase is equivalent to an average annualincrease of 14.7 per cent. In 2011-12, Brisbane Airport’s aeronautical operating margin perpassenger increase was driven by the operating margin increasing at a faster rate than thenumber of passengers.Brisbane Airport increased terminal charges for international and domestic passengers in2011-12, while aircraft related charges, aircraft parking fees and noise surcharge remainedunchanged. Brisbane Airport has advised that price increases were set out in the five-yearpricing agreements with airlines to recover the costs of investment. However, and as noted inthe 2010-11 AMR, the ACCC is cognisant that in submissions to the PC’s inquiry airlinesclaimed that, while there are agreements in place with airports, commercial negotiations withsome airports tend to be one-sided and dysfunctional.22The ACCC is not privy to thecommercial negotiations between Brisbane Airport and the airlines and, therefore, is unable todetermine whether or not the price increases at Brisbane Airport are a reflection of the highquality of services delivered at the airport or whether they are a symptom of an imbalance inthe negotiating power between airlines and the airport. That said, the airlines have not raisedany specific concerns in their survey responses and the ACCC continues to note the highquality of service results at the airport.Brisbane Airport has increased its level of investment in aeronautical services in recent years.Between 2006-07 and 2011-12, annual additions as a percentage of tangible non-currentassets for aeronautical assets have been over 10.0 per cent on average, with the exception of2010-11 when addition as a percentage of tangible non-current assets for aeronautical servicesfell to 4.7 per cent. In 2011-12, additions as a percentage of tangible non-current assetsincreased to 10.8 per cent.1.3.3 Observations about Melbourne AirportMelbourne Airport had the second largest number of passengers among monitored airportspass through its terminals in 2011-12, with 28.4 million passengers. This represented anincrease of 0.2 per cent over 2010-11: international passenger numbers increased by7.6 per cent while domestic passenger numbers fell by 2.0 per cent. In 2011-12, domesticpassengers accounted for around three quarters of total passengers travelling throughMelbourne Airport. Melbourne Airport stated that the decrease in domestic passengers in22Productivity Commission, Economic Regulation of Airport Services, Inquiry report no. 57, Canberra, December 2011.
  • 34. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services92011-12 reflected some of the difficulties experienced by domestic operators during the year.23In particular, Melbourne Airport pointed to the cessation of services by Tiger Airways at theairport between 2 July 2011 and 10 August 2011, as well as the Qantas grounding andassociated industrial issues. That said, international passenger numbers have been growing ata faster rate than domestic passenger numbers over the last ten years: since 2001-02,international passenger numbers have increased 96.8 per cent compared with 67.5 per cent fordomestic passenger numbers.Melbourne Airport had the largest increase in aeronautical revenue per passenger among themonitored airports in 2011-12, increasing by 4.8 per cent to $8.58 per passenger.The ACCC has observed that since 2001-02, Melbourne Airport’s quality of service ratingshave largely remained above satisfactory. Following a decline in the airport’s rating in 2010-11,quality of service ratings by airlines have somewhat improved in 2011-12.Following a decline in ratings by airlines for quality of service last year, airlineratings have shown improvement in 2011-12In 2011-12 Melbourne Airport’s quality of service ratings by airlines improved within thesatisfactory range, with airlines noting improvements in its international terminal services andfacilities, as shown in chart 1.3.3. In particular, airlines noted improvements in baggageprocessing facilities at the international terminal. However, some airlines continued to state thatservices at the international and domestic terminal were constrained during peak periods.Chart 1.3.3: Airlines’ average ratings for quality of service at Melbourne Airport,2001-02 to 2011-12On average, from 2001-02 to 2011-12, airlines have generally rated Melbourne Airport’s qualityof service as satisfactory. Airline average ratings for the airport’s quality of service, however,experienced a notable decline in 2004-05 and again in 2010-11 but recovered in 2011-12.Services provided at the domestic terminal were the only services that received a poor rating in2011-12.23Melbourne Airport, Melbourne Airport achieves 8 per cent international growth for 2011/12, Media Release, 24 July2012. See: http://melbourneairport.com.au/News-Events/News-Events-Archive/2012/melbourne-airport-achieves-8-per-cent-international-growth-for-2011-12.html.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingInternational terminal Domestic terminalAirside services and facilities Managements responsivenessExcellentGoodPoorVery poorSatisfactory
  • 35. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1210While Melbourne Airport’s average prices increased in 2011-12, the airport isundertaking investment and is reporting increasing average costsMelbourne Airport’s aeronautical revenue per passenger (excluding security) has increased inalmost every year since 2002-03.Between 2001-02 and 2002-03, Melbourne Airport reported a 44.5 per cent increase inaeronautical revenue per passenger and a 380.7 per cent increase in aeronautical margin perpassenger. This was largely driven by Melbourne Airport increasing aeronautical chargesfollowing the removal of price caps on 1 July 2002.Between 2002-03 and 2011-12, Melbourne Airport’s aeronautical operating margin perpassenger increased by 43.1 per cent. When adjusted for inflation, the increase in aeronauticaloperating margin per passenger since 2002-03 is 12.0 per cent. However, in three of the lastfour years Melbourne Airport experienced a decline in aeronautical operating margin perpassenger, which decreased by 9.9 per cent in 2011-12. The decrease in aeronauticaloperating margins was driven by an increase in aeronautical operating expenses perpassenger (excluding security) of 20.5 per cent, related mainly to salaries and depreciationcharges. The increase in salaries was due to an increase in staff levels and in average salariesper staff. Average salaries in 2011-12 were 9.4 per cent higher than the previous year.Melbourne Airport noted that increases in salaries and depreciation charges were driven byactivities associated with the airport’s expansion, specifically investing in new aeronauticalassets and accommodating passenger growth. Melbourne Airport has noted that staff numbershave moved in both the planning and construction areas during the year, in line with its currentand future development requirements. Further, Melbourne Airport has stated that operationalstaff numbers have moved in line with the need to operate an airport with increasingcongestion.Melbourne Airport continued to invest in aeronautical services in 2011-12 with additions tobuildings and plant and machinery assets as well as land improvements. Some of theaeronautical projects completed during 2011-12 include fitting out several departure gates andworks in the baggage reclaim area of the international terminal, as well as expanding rooms forAustralian Customs and Border Protection Services search and interview functions. Since2006-07, Melbourne Airport’s additions as a percentage of tangible non-current assets foraeronautical services have remained over 10.0 per cent, with a high of 22.1 per cent in2008-09. In 2011-12, additions were $155.8 million, or 15.5 per cent of tangible non-currentaeronautical assets.Melbourne Airport has announced that investment to expand runway capacity will be requiredbefore the end of the decade in order to meet the growing demand for access to the airport.The proposal is to be outlined in its 2013 draft master plan (chapter 2 provides more detail onthe master planning process).241.3.4 Observations about Perth AirportPerth Airport faced the fastest growing demand of the monitored airports in 2011-12, with totalpassenger numbers increasing by 16.3 per cent to 13.3 million passengers. Internationalpassenger numbers increased by 7 per cent in 2011-12 while domestic passenger numbersincreased 20 per cent. Perth Airport has experienced an increase in passenger numbers of86.6 per cent since 2005-06. More than three quarters of the total growth in passengernumbers since 2001-02 has been accounted for by domestic passengers. The share of totalpassenger numbers accounted for by domestic passengers has increased from 65.4 per cent in2001-02 to 73.7 per cent in 2011-12.24Melbourne Airport, Melbourne Airport announces third runway preference, Media Release, 20 November 2012.
  • 36. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services11In previous monitoring reports, the ACCC observed that the evidence about Perth Airport wascontinuing to show mixed results. Quality of service results were seen to be a concern,although investment was occurring and price changes were moderate.In 2011-12, the quality of service results for aeronautical services did not show materialimprovements across the majority of indicators measured. Yet, as occurred in previous years,Perth Airport has invested in terminals and airfield improvements during 2011-12. AlthoughPerth Airport is investing in upgraded or new facilities, these investments do not appear to behaving a major impact on average quality of service indicators for aeronautical services. Thatsaid, a new domestic terminal that opened in March 2013 is expected to have an impact onservice levels.In 2011-12, Perth Airport implemented upward and downward revision of the prices of anumber of services. Overall, however, Perth Airport had a slight fall in aeronautical revenue perpassenger among the monitored airports, decreasing by 1.6 per cent to $8.86 per passenger.Airlines have continued to raise concerns about quality of service levels atPerth AirportPerth Airport’s average quality of service ratings by airlines remained at poor in 2011-12. Theseservice ratings have been at poor in four out of the last five years. This is despite Perth Airportundertaking substantial investments in aeronautical services. A number of completedinvestments in 2011-12 including the terminal 3 phase 1 expansion, other terminalenhancements and apron reconfiguration and ground support equipment storage upgrades.Other substantial investments that commenced or were underway during 2011-12 include thenew domestic terminal, completed during 2013, and airfield investments planned for completionin 2014.Chart 1.3.4 presents average quality of service indicators for Perth Airport as rated by airlines.Although none of these quality of service ratings increased between rating categories, therewere slight increases within categories for two of the indicators. The ratings for the domesticterminal and management’s responsiveness both increased within their categories, butremained at poor and satisfactory respectively. Airline ratings for the international terminal andairside services and facilities both decreased within the category of poor.
  • 37. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1212Chart 1.3.4: Airlines’ average ratings for quality of service at Perth Airport,2001-02 to 2011-12In the 2011-12 survey results, airlines rated 15 of the 28 indicators at the international terminal,domestic terminal and airside services as either poor or very poor. Again in 2011-12, airlineshave commented on insufficient numbers (and quality) of aerobridges in both the internationaland domestic terminals. Ratings for the availability and standard of all aerobridges were poorfor 2011-12.A more detailed discussion of Perth Airport’s quality of service results is available in section 7.4of this report.Perth Airport is continuing to invest in aeronautical servicesAs noted, the ACCC has previously acknowledged that Perth Airport had increased investmentin aeronautical services in more recent periods, including a major redevelopment of its airportannounced in November 2010. In particular, this redevelopment includes new and expandedpassenger terminals, expanded aircraft parking areas and public access infrastructure. PerthAirport noted in 2011-12 that the substantial passenger growth over the past few years hasresulted in the ‘customer experience suffering’ due to passenger congestion during peak hours.Perth Airport commented that the investment and redevelopment was intended to address thisdeclining customer experience and standard of quality of service, as well as increasing airportcapacity.The monitoring results for 2011-12 show that Perth Airport is continuing to invest inaeronautical services. In 2011-12, Perth Airport’s additions as a percentage of tangible non-current assets for aeronautical services were 19 per cent, slightly down from the 21 per centrecorded in 2010-11.As noted, Perth Airport completed a number of major investment projects during 2011-12,including the first stage of the terminal 3 refurbishments, various international terminalrefurbishments and a number of airfield improvements. The recently completed new domesticterminal 2 (opened in March 2013) will primarily service regional Western Australia and somelimited interstate routes. The new terminal is part of a larger investment plan for the airportwhich will include a new domestic pier due for completion in 2014.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingInternational terminal Domestic terminalAirside services and facilities Managements responsivenessExcellentGoodPoorVery poorSatisfactory
  • 38. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services13Uncertainty about whether investment is addressing airlines’ concernsThe ACCC noted in the 2010-11 AMR that, in general, concerns about an airport’s performancewhere quality of service may be less than satisfactory over a short period of time may beallayed if the airport is investing to address quality of service concerns.In the case of Perth Airport, it would appear that investment completed during 2011-12 has notmaterially improved quality of service ratings and has not as yet addressed all airlines’concerns. It remains to be seen if these and other investments to be completed during 2012-13will address airlines’ concerns.The ACCC has noted in previous monitoring reports that meaningful negotiations with users forsignificant investment projects often take time. However, the ACCC has also noted that longdelays in addressing key users’ concerns would be less likely to occur in an effectivelycompetitive market.While Perth Airport has previously advised that most of the issues have arisen in response tothe unexpected surge in demand for aeronautical services in the last few years, the ACCCnotes that it has now been a number of years since Perth Airport first recognised the concerns.That said, Perth Airport may be reasonably expected to be cautious about new investments if itis not certain that current high levels of demand for aeronautical services are sustainable in thelong term.A key question for future monitoring reports will be how Perth Airport responds to the strengthof current throughput growth rates. The completion and commissioning of the new domesticterminal in early 2013 is a key part of Perth Airport’s strategy for improving service levels.25The ACCC intends to closely monitor the extent to which these concerns are addressed byPerth Airport.Higher margins are a reflection of increased demand rather than higher pricesAs noted above, Perth Airport adjusted a number of charges during 2011-12. International,domestic and regional landing charges decreased by 6.1 per cent, while basic aircraft parkingcharges increased by 5.0 per cent. Passenger related charges generally increased.However, due to the impact on costs associated with the expansion of aeronautical facilitiesand the increase in passenger numbers, aeronautical operating margin per passengerdecreased during 2011-12 by 12.5 per cent to $3.12. Although total aeronautical operatingmargin increased by 1.8 per cent in 2011-12, total passengers increased by 16.3 per cent.Since 2002-03, total aeronautical operating margin has increased by 150.0 per cent, anaverage annual increase of 10.7 per cent per annum. When adjusted for inflation, the averageannual increase is 7.7 per cent per annum. Over the same period, annual passenger numbersincreased 147.7 per cent to 13.3 million passengers, equivalent to an average annual increaseof 10.6 per cent per annum. As a result, it appears that the increase in total aeronauticaloperating margins seen at Perth Airport since 2002-03 may have been mainly driven bypassenger growth, rather than increasing list prices.During 2002-03, aeronautical operating margin per passenger increased by 1220.6 per cent,largely driven by higher aeronautical charges following the removal of price caps on1 July 2002. Since 2002-03, Perth Airport’s aeronautical operating margin per passenger hasincreased by 0.9 per cent. This represents an annualised increase of 0.1 per cent per annum.When adjusted for inflation, aeronautical operating margin per passenger had decreased by anaverage of 2.6 per cent per annum.25The ACCC notes that Perth Airport has plans to implement a slot management scheme to balance supply anddemand during peak periods from the end of March 2013.
  • 39. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-12141.3.5 Observations about Sydney AirportIn 2011-12, Sydney Airport experienced the highest passenger throughput among themonitored airports, with 36.3 million passengers passing through the airport, an increase of0.1 per cent from 2010-11. The number of domestic passengers fell 1.7 per cent while thenumber of international passengers increased by 3.6 per cent. Since 2001-02 domesticpassengers’ share of total passenger numbers going through Sydney Airport has remainedsteady at around two thirds. Since 2007-08, international passenger volumes have risen at aslightly higher rate than domestic passenger numbers, 12.3 per cent growth for internationalpassengers compared with 7.9 per cent growth for domestic passengers.In previous reports, the ACCC noted that airlines consistently identified Sydney Airport as theleast responsive of the airports in relation to the delivery and quality of aeronautical servicesover a long period of time—particularly at the airport’s international terminal. Despite the airportinvesting in aeronautical services, the ACCC has also observed increases in average pricesand profitability. The monitoring results for 2011-12 show a continuation of long-term trends inquality of service, prices and profitability.In 2011-12 Sydney Airport had the highest total aeronautical revenue per passenger among themonitored airports at $14.96 per passenger.Sydney Airport’s average ratings by airlines for quality of service fell to poor in2011-12, following improvements in its airline rating in 2010-11The average airline rating for Sydney Airport’s quality of service has fluctuated betweensatisfactory and poor since 2005-06. In 2011-12, airlines decreased their rating for SydneyAirport from satisfactory to poor. In last year’s AMR, the ACCC noted that although higherairline ratings for Sydney Airport were a positive step, airlines still had concerns aboutparticular services and facilities. The results from the latest airlines surveys suggest thatSydney Airport may not have addressed these concerns during 2011-12. More detail onSydney Airport’s quality of service results in 2011-12 is available in section 8.2 of this report.Chart 1.3.5: Airlines’ average ratings for quality of service at Sydney Airport,2001-02 to 2011-12In particular, as shown in chart 1.3.5, airlines have raised concerns with the quality of service atthe international terminal over the long-term and have rated the quality of service they received01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingInternational terminal Domestic terminalAirside services and facilities Managements responsivenessExcellentGoodPoorVery poorSatisfactory
  • 40. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services15at the international terminal as less than satisfactory in every year since 2002-03, except for2006-07 and 2010-11.When examining the ratings for individual services over numerous years, the ACCC hasobserved that airlines consistently raised concerns about particular services. For example, atthe international terminal, airlines rated the standard of baggage processing facilities as lessthan satisfactory over nine consecutive periods from 2001-02 to 2009-10. Airlines repeatedlynoted that the system was unreliable during peak periods. Airlines have again rated thestandard of baggage processing facilities as poor in 2011-12, with some airlines stating that thesystem is ageing and that equipment is out of date.Over a similar period, airlines raised concerns about inadequate check-in services andaerobridges, a concern that is still being raised by airlines in 2011-12. Sydney Airport hascommented that ten new check-in desks were installed in October 2012. Sydney Airport hasnot reported an increase to the number of aerobridges at the international terminal since itadded four aerobridges in 2008-09 to have a total of 34. Nor has it reported an increase in thenumber of international check-in desks since 2001-02 and the number of desks has remainedconstant at 192 since 2004-05. By way of contrast, demand for these services in terms ofinternational passenger numbers increased by 45.1 per cent between 2001-02 and 2011-12,and demand in terms of total aircraft movements increased by 22.1 per cent over the sameperiod.Sydney Airport’s unit margins slightly increased in 2011-12 and the airportcontinues to investSince 2001-02, Sydney Airport’s aeronautical operating margin per passenger has increasedby 157.7 per cent. This is mainly due to a decrease in aeronautical operating expenses perpassenger of 13.9 per cent between 2001-02 and 2004-05, while aeronautical revenue perpassenger increased by 15.7 per cent over the same period. When adjusted for inflation,aeronautical operating margin per passenger has increased by 96.6 per cent since 2001-02. In2011-12, Sydney Airport’s aeronautical operating margin per passenger increased by6.4 per cent, driven by an increase in revenues of 3.6 per cent while passenger numbersincreased by only 0.1 per cent.Sydney Airport has increased its level of investment in aeronautical services in recent periods.In particular, between 2006-07 and 2009-10, additions to tangible non-current aeronauticalassets averaged around $204.5 million per annum, with a peak of $345.3 million in additions in2008-09. In 2011-12, Sydney Airport had additions of $100.2 million, representing 4.0 per centof tangible non-current assets for aeronautical services.Since 2001-02, Sydney Airport has consistently had the largest volume of passengers amongthe monitored airports. Over the same period, Sydney Airport has also had the largestaeronautical revenue per passenger (excluding security) and aeronautical operating margin perpassenger. It should be noted that despite earning the largest aeronautical operating marginper passenger, Sydney Airport has been consistently rated last among the five monitoredairports for overall quality of service since 2006-07.1.4 Price monitoring resultsThis section provides an overview of the key indicators relating to prices, revenues, costs andmargins for aeronautical services. In particular:• activity levels (including passenger and aircraft movements) (section 1.4.1)• revenues (section 1.4.2)
  • 41. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1216• average prices, costs and margins (section 1.4.3 to 1.4.6)• investment in aeronautical assets (section 1.4.7).The charts in these sections present data since 2001-02. However, where relevant, analysis ofmore recent trends is also presented. It should also be noted that in addition to the chartsshowing data expressed in nominal terms in sections 1.4.2 to 1.4.6, these sections also includecharts showing changes in indicators adjusted for inflation over time. Adjusting for inflationprovides a more accurate reflection of the real changes in these indicators over time.As noted in the introduction, comparisons of airports’ revenues, prices, costs, margins andquality of service are complicated by various terminal configurations and DTLs. Notably,Adelaide Airport is the only monitored airport that does not have any DTLs.1.4.1 Activity levelsUsers of airport services and facilities primarily include airlines, passengers and governmentborder agencies. Passengers are a useful measure of activity at the airports as passengerdemand for air transportation is likely to be the primary driver of the airports’ capacity needs.Chart 1.4.1: Volume of passengers, 2001-02 to 2011-12Key observations from chart 1.4.1 include:• With the exception of Adelaide Airport, the monitored airports had an increase in passengernumbers in 2011-12. The total number of passengers passing through the five monitoredairports increased by 2.5 per cent from 103.7 million in 2010-11 to 106.3 million in 2011-12.Melbourne and Sydney airports recorded a fall in domestic passenger numbers and higherinternational passenger numbers. On the other hand, at Perth and Brisbane airports,domestic passenger travel made a significant contribution to total passenger growth atthese airports.• Since 2001-02, total throughput of passengers has increased by 71.1 per cent from62.1 million. Interestingly, despite the global economic slowdown since 2008-09, the05101520253035402001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Numberofpassengers(million)Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 42. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services17airports have had continual growth in passenger numbers, leading to a growth in totalthroughput of 13.0 million (14.0 per cent) since 2008-09.Chart 1.4.2: Percentage of total passengers through each airport in 2011-12Key observations from chart 1.4.2 include:• In terms of passenger numbers, Adelaide Airport is the smallest of the five airports, with7.1 million passengers passing though the airport in 2011-12, a decrease of 4.0 per centfrom 2010-11. Adelaide Airport was the only monitored airport to report a decrease inpassengers, which may be partly due to subdued economic conditions, Tiger Airwaysceasing operations at the airport from July 201126and the Qantas grounding andassociated industrial action.− Since 2001-02, passenger throughput at Adelaide Airport has increased by69.8 per cent from 4.2 million.• In 2011-12, Brisbane Airport was the second fastest growing airport following Perth Airport.Brisbane Airport had 21.2 million passengers passing through its terminals in 2011-12, anincrease of 4.6 per cent.− Since 2001-02, passenger numbers at Brisbane Airport have increased by72.1 per cent from 12.3 million.• Melbourne Airport was the second busiest airport in 2011-12, with 28.4 million passengers(26.7 per cent of the monitored airports’ total passengers) passing through its terminals—an increase of 0.2 per cent compared to 2010-11. International passenger numbersincreased by 7.6 per cent in 2011-12, while domestic passenger numbers fell by2.0 per cent.− Since 2001-02, passengers through Melbourne Airport have increased by72.1 per cent from 16.5 million.26Tiger Airways re-commenced operations at Adelaide Airport after the end of the 2011-12 financial year.Adelaide Airport6.7%Brisbane Airport19.9%Melbourne Airport26.7%Perth Airport12.5%Sydney Airport34.2%
  • 43. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1218• Perth Airport was the fastest growing airport, with passenger numbers increasing by16.3 per cent to 13.3 million passengers in 2011-12.− Since 2001-02, passengers at Perth Airport have increased by 175.3 per cent from4.8 million. The majority of this increase has occurred since 2005-06, withpassenger numbers increasing by 86.6 per cent during this period.• Sydney Airport experienced the highest passenger throughput of the five monitoredairports, with 36.3 million passengers passing through the airport in 2011-12. This was anincrease of 0.1 per cent from 2010-11. International passenger numbers increased by3.6 per cent in 2011-12, while domestic passenger numbers fell by 1.7 per cent.− Since 2001-02, passengers through Sydney Airport have increased by49.3 per cent from 24.3 million.Chart 1.4.3: Aircraft movements, 2001-02 to 2011-12Key observations from chart 1.4.3 include:• A combined 958 863 aircraft flew to and from the five airports in 2011-12, increasing by2.4 per cent from 2010-11. The change in aircraft movements at each of the monitoredairports in 2011-12 ranged between a fall of 5.4 per cent at Adelaide Airport to a rise of10.1 per cent at Perth Airport.− Since 2001-02, total aircraft movements at the five monitored airports hasincreased by 30.7 per cent from 733 694.• Adelaide Airport is the smallest of the five airports in terms of aircraft movements, with94 482 aircraft movements in 2011-12—a decrease of 5.4 per cent from 2010-11. As notedthis may be partly due to subdued economic conditions, Tiger Airways ceasing operationsat the airport from July 201127and the Qantas grounding and associated industrial action.27Tiger Airways re-commenced operations at Adelaide Airport after the end of the 2011-12 financial year.040801201602002402803202001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Numberofaircraftmovements(thousand)Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 44. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services19− Since 2001-02, aircraft movements through Adelaide Airport have decreased by1.8 per cent from 96 205. Adelaide Airport is the only monitored airport to havereported a decrease in aircraft movements over the period since 2001-02.• Brisbane Airport experienced a 7.3 per cent increase in aircraft movements in 2011-12,increasing from 190 402 aircraft movements in 2010-11 to 204 296 aircraft movements in2011-12. Brisbane Airport had the second highest growth in aircraft movements in 2011-12,following Perth Airport.− Since 2001-02, aircraft movements through Brisbane Airport have increased by35.5 per cent from 150 750.• Melbourne Airport’s aircraft movements remained relatively unchanged in 2011-12,reporting a slight increase of 0.5 per cent to 207 070.− Since 2001-02, aircraft movements through Melbourne Airport have increased by31.4 per cent from 157 570.• Perth Airport had the highest growth in aircraft movements of the five airports, reporting anincrease of 10.1 per cent in 2011-12. This is the highest annual increase in aircraftmovements reported at Perth Airport since 2001-02.− Perth Airport has had the highest growth in aircraft movements in every year since2005-06. Despite this growth, Perth Airport had the second smallest number ofaircraft movements among the five monitored airports in 2011-12 at 142 079aircraft movements.− Since 2001-02, aircraft movements through Perth Airport have increased by90.9 per cent from 74 440.• Despite a decrease in aircraft movements of 0.1 per cent in 2011-12, Sydney Airport hadthe highest number of aircraft movements among the five monitored airports. In 2011-12,there were around 310 936 aircraft movements through Sydney Airport.− Since 2001-02, aircraft movements through Sydney Airport have increased by22.1 per cent from 254 729.• While passenger numbers have generally increased at the airports over the past 11 years,aircraft movements have not necessarily followed the same trend, with the number ofaircraft increasing at a slower rate and, in some instances, decreasing.− Over time, there has been a change in aircraft configurations, particularly with anincreasing number of low cost carriers (LCCs), which carry a higher number ofpassengers per flight. There has also been a shift towards airlines using largeraircraft, which carry a much greater load of passengers (such as the A380, whichcarries 525 passengers compared to a typical Boeing 747, which carries 416passengers).− While trends in aircraft movements are affected by the use of larger aircraft,passengers are likely to be a key driver of terminal capacity needs and totalaeronautical revenue at the airports.
  • 45. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-12201.4.2 Total aeronautical revenueAeronautical revenue is derived from charges to airlines, typically on a per passenger basis, forthe use of essential airport services (such as runways, taxiways and some passengerprocessing facilities).Chart 1.4.4: Total aeronautical revenue, 2001-02 to 2011-12Chart 1.4.5: Total aeronautical revenue in real terms, 2001-02 to 2011-12Note: 2001-02 is used as the base year.0801602403204004805602001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12$millionAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport0801602403204004805602001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12$millionAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 46. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services21Key observations from charts 1.4.4 and 1.4.5 include:• Total aeronautical revenue increased at all monitored airports in 2011-12, except forAdelaide Airport. The five monitored airports reported combined revenue of $1.2 billionfrom aeronautical services—an increase of 4.5 per cent from $1.1 billion in 2010-11.− Since 2001-02, increased passenger numbers and charges have led to the airportsreporting a combined increase in total aeronautical revenue of $824.2 million(221.9 per cent). When adjusted for inflation since 2001-02, the increase in totalaeronautical revenue is $540.8 million (145.6 per cent).− The monitored airports reported significant increases in aeronautical revenueduring 2001-02 and 2002-03. This was partly due to Brisbane, Melbourne andPerth airports increasing prices shortly after price caps were removed on 1 July2002, Sydney Airport increasing prices due to an approved price notification during2001 and Adelaide Airport increasing prices shortly after its price cap was removedin October 2001.• Adelaide Airport’s total aeronautical revenue was the lowest of the monitored airports,decreasing by 9.3 per cent from $86.1 million in 2010-11 to $78.1 million in 2011-12. Asnoted, this decrease in total aeronautical revenue which may be partly due to subduedeconomic conditions, Tiger Airways ceasing operations at the airport from July 201128andthe Qantas grounding and associated industrial action.− Since 2001-02, total aeronautical revenue at Adelaide Airport has increased by589.1 per cent from $11.3 million. When adjusted for inflation, the increase in totalaeronautical revenue since 2001-02 is 425.8 per cent.− As noted in box 1.2.1, Adelaide Airport reported a significant increase inaeronautical revenue in 2005-06 and 2006-07. Between 2006-07 and 2011-12,Adelaide Airport’s aeronautical revenue has increased by 12.6 per cent. This is thelowest percentage growth in aeronautical revenue among the five monitoredairports during these years.• Brisbane Airport had the second highest percentage increase in total aeronautical revenueamong the five monitored airports, reporting an increase of 7.0 per cent from $198.5 millionin 2010-11 to $212.4 million in 2011-12.− Since 2001-02, total aeronautical revenue at Brisbane Airport has increased by369.4 per cent from $45.3 million. When adjusted for inflation, the increase in totalaeronautical revenue since 2001-02 is 258.1 per cent, which represents anaverage annual increase of 13.6 per cent.• Melbourne Airport reported the second highest total aeronautical revenue at $243.6 millionin 2011-12—an increase of 5.0 per cent from $231.9 million in 2010-11.− Since 2001-02, total aeronautical revenue at Melbourne Airport has increased by270.8 per cent from $65.7 million. When adjusted for inflation, the increase in totalaeronautical revenue since 2001-02 is 182.9 per cent, which represents anaverage annual increase of 11.0 per cent.• Perth Airport reported the largest growth in total aeronautical revenue in 2011-12,increasing by 14.5 per cent from $103.1 million in 2010-11 to $118.0 million in 2011-12.28Tiger Airways re-commenced operations at Adelaide Airport after the end of the 2011-12 financial year.
  • 47. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1222− Since 2001-02, total aeronautical revenue at Perth Airport has increased by473.2 per cent from $20.6 million. When adjusted for inflation, the increase in totalaeronautical revenue since 2001-02 was 337.3 per cent, which represents anaverage annual increase of 15.9 per cent. This is the second highest percentagegrowth in total aeronautical revenue among the five monitored airports since2001-02.• Sydney Airport’s total aeronautical revenue has been significantly higher than the otherairports since 2001-02. Over this time, Sydney Airport’s total aeronautical revenue hasincreased by 137.7 per cent from $228.6 million in 2001-02 to $543.5 million in 2011-12. In2011-12, total aeronautical revenue increased by 3.6 per cent. When adjusted for inflation,the increase in total aeronautical revenue since 2001-02 is 81.4 per cent, which representsan average annual increase of 6.1 per cent.Comparison of aeronautical revenue and total airport revenueTable 1.4.1: Comparison of aeronautical and total airport revenue at the monitoredairports, 2001-02 and 2011-12Adelaide Brisbane Melbourne Perth SydneyRevenue2001-02($million)Aeronautical 11.3 45.3 65.7 20.6 228.6Total airport 39.6 146.9 196.9 76.1 454.0Aeronautical as% of total 28.6% 30.8% 33.4% 27.0% 50.4%Revenue2011-12($million)Aeronautical 78.1 212.4 243.6 118.0 543.5Total airport 145.3 486.1 573.3 721.9 1 004.0Aeronautical as% of total 53.8% 43.7% 42.5% 16.4% 54.1%Key observations from table 1.4.1 include:• Aeronautical revenue as a proportion of total airport revenue has increased at all of themonitored airports since 2001-02, except for Perth Airport. The five monitored airportsreported total combined revenue of $2.9 billion in 2011-12—an increase of 21.0 per centfrom $2.4 billion in 2010-11.• Adelaide Airport’s total airport revenue has increased in every year since 2001-02, exceptfor 2008-09 and 2011-12. Aeronautical revenue as a proportion of total airport revenue hasranged between 28.6 per cent and 63.1 per cent since 2001-02.• Brisbane Airport’s total airport revenue has increased in every year since 2001-02, exceptfor 2008-09, when total airport revenue decreased by 2.9 per cent. Aeronautical revenue asa proportion of total airport revenue has ranged between 30.4 per cent and 43.7 per centsince 2001-02.• Melbourne Airport’s total airport revenue has increased in every year since 2001-02 and byan average of 11.3 per cent per annum. Aeronautical revenue as a proportion of totalairport revenue has ranged between 33.4 per cent and 43.5 per cent since 2001-02.
  • 48. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services23• Perth Airport’s total airport revenue has increased in every year since 2001-02, except for2007-08 and 2008-09, when total airport revenue decreased by 29.2 per cent over theseyears. Aeronautical revenue as a proportion of total airport revenue has ranged between27.0 per cent and 47.3 per cent between 2001-02 and 2010-11. In 2011-12, aeronauticalrevenue as a proportion of total airport revenue was at its lowest since 2001-02, at16.4 per cent. This was due to a 143.7 per cent increase in total airport revenue in2011-12.− Perth Airport noted that its 2011-12 total airport revenue included an increase infair value of non-aeronautical investment property of around $337.5 million as at 30June 2012. Perth Airport stated that the increase was primarily due to a change inthe investment methodology used for deriving fair value of an investment and thatthe change materially impacts on total airport return measurements. Excluding therevaluation, aeronautical revenue as a proportion of total airport revenue in2011-12 was 34.3 per cent, unchanged from last year.• Sydney Airport’s total airport revenue has increased in every year since 2001-02, exceptfor 2009-10, when total airport revenue decreased by 20.1 per cent. Aeronautical revenueas a proportion of total airport revenue has ranged between 39.6 per cent and54.5 per cent since 2001-02.1.4.3 Average prices for aeronautical servicesGiven the complex nature of airports’ bundling of charges, and changes on the basis of howthese charges are applied, the ACCC adopts aeronautical revenue per passenger as anindicator of average prices that the airlines pay to airports.It should be noted that the average prices shown in charts 1.4.6 and 1.4.7 include revenuereceived to cover the costs for government mandated security and provides an indication of thetotal average price paid by airlines to airports. However, as discussed below, governmentmandated security charges do not reflect decisions made by airport operators. Therefore,charts 1.4.8 and 1.4.9 show aeronautical revenue per passenger excluding security as anindication of the average prices charged by the airports, which more closely reflects the airportoperators’ decisions.It should be noted that prior to 2011-12, Perth Airport did not apply passenger charges to largeaircraft operating in the general aviation precinct and did not receive passenger numbers fromairlines in respect of these aircraft. As a result, care should be taken when making comparisonsof aeronautical revenue on a per passenger basis for 2011-12 with earlier years. This isdiscussed in further detail in section 7.3.
  • 49. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1224Chart 1.4.6: Aeronautical revenue per passenger (average prices including security),2001-02 to 2011-12Chart 1.4.7: Aeronautical revenue per passenger in real terms (average pricesincluding security), 2001-02 to 2011-12Note: 2001-02 is used as the base yearKey observations from charts 1.4.6 and 1.4.7 include:• With the exception of Adelaide and Perth airports, all other monitored airports reported anincrease in average prices in 2011-12. Compared to the previous year, changes in theairports’ average prices ranged from a fall of 5.5 per cent at Adelaide Airport to a rise of4.8 per cent at Melbourne Airport.− Since 2001-02, average prices increased at all airports by between 59.2 per cent(Sydney Airport) and 305.9 per cent (Adelaide Airport). However, the majority of$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 50. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services25the increase at Adelaide Airport occurred when it opened its new terminal andDTLs ceased at the airport in 2005-06.− Since 2001-02, the increase in average prices at the monitored airports whenadjusted for inflation ranged between 21.5 per cent (Sydney Airport) and 209.7 percent (Adelaide Airport).• Adelaide Airport’s aeronautical revenue per passenger declined for the second consecutiveyear in 2011-12, decreasing from $11.64 per passenger in 2010-11 to $11.01 perpassenger (-5.5 per cent).− Since 2001-02, Adelaide Airport has had the largest percentage increase inaeronautical revenue per passenger, increasing by 305.9 per cent from $2.71 perpassenger. When adjusted for inflation, the increase in aeronautical revenue perpassenger since 2001-02 is 209.7 per cent.− As noted in box 1.2.1, Adelaide Airport reported a significant increase inaeronautical revenue in 2005-06 and 2006-07. Between 2006-07 and 2011-12,Adelaide Airport’s aeronautical revenue per passenger has declined 0.1 per cent.Adelaide Airport is the only monitored airport to report a decline in aeronauticalrevenue per passenger over these years.• Brisbane Airport’s aeronautical revenue per passenger increased by 2.2 per cent in2011-12, from $9.80 per passenger in 2010-11 to $10.02 per passenger.− Brisbane Airport has experienced the second largest percentage increase inaeronautical revenue per passenger since 2001-02, increasing by 172.8 per centfrom $3.67 per passenger. When adjusted for inflation, the increase in aeronauticalrevenue per passenger since 2001-02 is 108.1 per cent, which represents anaverage annual increase of 7.6 per cent.• Melbourne Airport’s aeronautical revenue per passenger was the lowest of the monitoredairports at $8.58 per passenger in 2011-12. Melbourne Airport reported the largestpercentage growth in aeronautical revenue per passenger in 2011-12, increasing by4.8 per cent from $8.19 per passenger in 2010-11.− Since 2001-02, Melbourne Airport’s average prices have increased by115.4 per cent from $3.98 per passenger. When adjusted for inflation, the increasein aeronautical revenue per passenger since 2001-02 is 64.4 per cent, whichrepresents an average annual increase of 5.1 per cent.• Perth Airport’s aeronautical revenue per passenger decreased by 1.6 per cent in 2011-12,from $9.00 per passenger in 2010-11 to $8.86 per passenger.− Since 2001-02, Perth Airport’s average prices have increased by 108.2 per centfrom $4.26 per passenger. When adjusted for inflation, the increase in aeronauticalrevenue per passenger since 2001-02 is 58.8 per cent, which represents anaverage annual increase of 4.7 per cent.• In 2011-12, Sydney Airport continued to have the highest aeronautical revenue at $14.96per passenger, increasing by 3.5 per cent from $14.46 per passenger in 2010-11.− Since 2001-02, Sydney Airport’s average prices have increased by 59.2 per centfrom $9.40 per passenger. When adjusted for inflation, the increase is21.5 per cent, which represents an average annual increase of 2.0 per cent. This is
  • 51. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1226the lowest percentage increase in average prices among the monitored airportssince 2001-02.Average prices for aeronautical services excluding security costsOver the years, the government has introduced more stringent security requirements atAustralian airports (see discussion in appendix A.6). These include, among other requirements,increased passenger and baggage screening. Importantly, these additional requirements havecontributed to the airports’ costs (and associated revenue) through necessary investment insecurity equipment and additional personnel. Given that government security requirements donot reflect decisions made by airport operators, the ACCC also reports on aeronautical revenueper passenger excluding security to provide some indication of the average prices charged bythe airports and that reflect the airport operators’ decisions. It should be noted that the airportsaim to set government security revenue at a level to recover the costs of government securityrequirements so as not to earn margins on security services.Chart 1.4.8: Aeronautical revenue per passenger excluding security (average pricesexcluding security), 2001-02 to 2011-12$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 52. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services27Chart 1.4.9: Aeronautical revenue per passenger in real terms and excluding security(average prices excluding security), 2001-02 to 2011-12Note: 2001-02 is used as the base yearKey observations from charts 1.4.8 and 1.4.9 include:• With the exception of Adelaide Airport, all other monitored airports reported an increase inaverage prices (excluding security) in 2011-12. Compared to the previous year, changes inthe airports’ average prices (excluding security) ranged from a decrease of 6.5 per cent atAdelaide Airport to an increase of 5.6 per cent at Melbourne Airport.− Since 2001-02, average prices (excluding security) increased at all airports bybetween 54.3 per cent (Sydney Airport) and 326.5 per cent (Adelaide Airport).However, the majority of the increase at Adelaide Airport occurred when it openedits new terminal and DTLs ceased at the airport in 2005-06.− Since 2001-02, the increase in average prices (excluding security) at the monitoredairports when adjusted for inflation ranged between 17.7 per cent (Sydney Airport)and 225.4 per cent (Adelaide Airport).• Adelaide Airport was the only airport to see a decline in its average price (excludingsecurity) in 2011-12, decreasing from $10.09 per passenger in 2010-11 to $9.44 perpassenger (-6.5 per cent).− Since 2001-02, Adelaide Airport has experienced the largest percentage increasein aeronautical revenue per passenger (excluding security), increasing by326.5 per cent from $2.21 per passenger. When adjusted for inflation, the increasein aeronautical revenue per passenger (excluding security) since 2001-02 is225.4 per cent.− As noted in box 1.2.1, Adelaide Airport reported a significant increase inaeronautical revenue in 2005-06 and 2006-07. For the years from 2006-07 to2011-12, Adelaide Airport’s aeronautical revenue per passenger (excludingsecurity) declined 0.5 per cent. Adelaide Airport is the only monitored airport tohave reported a decline in aeronautical revenue per passenger (excluding security)over these years.$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 53. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1228• Brisbane Airport’s aeronautical revenue per passenger (excluding security) increased by2.7 per cent in 2011-12, from $8.76 per passenger in 2010-11 to $9.00 per passenger.− Brisbane Airport has had the second largest percentage increase in aeronauticalrevenue per passenger (excluding security) since 2001-02, increasing by206.1 per cent from $2.94 per passenger. When adjusted for inflation, the increasein aeronautical revenue per passenger (excluding security) since 2001-02 is133.5 per cent, which represents an average annual increase of 8.9 per cent.• Melbourne Airport had the largest percentage increase in aeronautical revenue perpassenger (excluding security) in 2011-12, increasing by 5.6 per cent from $7.17 perpassenger in 2010-11 to $7.57 per passenger.− Since 2001-02, Melbourne Airport’s average prices (excluding security) haveincreased by 121.7 per cent from $3.41 per passenger. When adjusted for inflation,the increase in aeronautical revenue per passenger (excluding security) since2001-02 is 69.1 per cent, which represents an average annual increase of5.4 per cent.• Perth Airport’s aeronautical revenue per passenger (excluding security) is the lowest of themonitored airports at $7.42 per passenger in 2011-12. Perth Airport had the secondsmallest percentage growth in aeronautical revenue per passenger (excluding security) in2011-12, increasing by 0.8 per cent from $7.36 in 2010-11.− Since 2001-02, Perth Airport’s average prices (excluding security) have increasedby 121.4 per cent from $3.35 per passenger. When adjusted for inflation, theincrease in aeronautical revenue per passenger (excluding security) since 2001-02is 68.9 per cent, which represents an average annual increase of 5.4 per cent.• Sydney Airport continued to report the highest aeronautical revenue per passenger(excluding security) at $12.86 per passenger in 2011-12, increasing by 3.8 per cent from$12.39 per passenger in 2010-11.− Since 2001-02, Sydney Airport’s average prices have increased by 54.3 per centfrom $8.33 per passenger. When adjusted for inflation, this increase is17.7 per cent, which represents an average annual increase of 1.6 per cent. This isthe lowest percentage increase in average prices (excluding security) among thefive monitored airports since 2001-02.1.4.4 Costs of providing aeronautical servicesAirports incur costs in providing aeronautical services, such as costs associated withmaintaining terminals and runways (aeronautical operating expenses). These costs arerecovered from the airports’ aeronautical revenues.Similarly to average prices, aeronautical operating expenses per passenger (shown in charts1.4.10 and 1.4.11) includes government mandated security costs and provides an indication ofthe total unit costs for the airports. However, as government mandated security costs do notreflect decisions made by the airport operators, charts 1.4.12 and 1.4.13 also showaeronautical operating expenses per passenger excluding security as an indication of the unitcosts incurred by airports that reflect the airport operators’ decisions.It should be noted that prior to 2011-12, Perth Airport did not apply passenger charges to largeaircraft operating in the general aviation precinct and did not receive passenger numbers fromthese aircraft. As a result, care should be taken when making comparisons of aeronauticaloperating expenses on a per passenger basis for 2011-12 with earlier years.
  • 54. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services29Chart 1.4.10: Aeronautical operating expenses per passenger (unit costs includingsecurity), 2001-02 to 2011-12Chart 1.4.11: Aeronautical operating expenses per passenger in real terms (unit costsincluding security), 2001-02 to 2011-12Note: 2001-02 is used as the base yearKey observations from charts 1.4.10 and 1.4.11 include:• With the exception of Brisbane Airport, all monitored airports reported an increase inaeronautical operating expenses per passenger in 2011-12. Compared to the previousyear, changes in the airports aeronautical operating expenses per passenger ranged froma decrease of 2.8 per cent at Brisbane Airport to an increase of 17.3 per cent at MelbourneAirport.• Adelaide Airport’s aeronautical operating expenses per passenger increased by2.4 per cent from $6.33 per passenger in 2010-11 to $6.48 per passenger in 2011-12.$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 55. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1230− Since 2001-02, Adelaide Airport has experienced the largest percentage increasein aeronautical operating expenses per passenger, increasing by 85.8 per centfrom $3.49 per passenger. When adjusted for inflation, the increase in aeronauticaloperating expenses per passenger since 2001-02 is 41.8 per cent.− As noted in box 1.2.1, Adelaide Airport experienced a significant increase inaeronautical operating expenses in 2005-06 and 2006-07. Between 2006-07 and2011-12, Adelaide Airport’s aeronautical operating expenses per passengerincreased by 3.3 per cent. Adelaide Airport has experienced the lowest percentagegrowth in aeronautical operating expenses per passenger over these years amongthe monitored airports.• Brisbane Airport was the only monitored airport to report a reduction in aeronauticaloperating expenses per passenger in 2011-12, decreasing by 2.8 per cent from $5.70 perpassenger in 2010-11 to $5.55 per passenger in 2011-12. This change was due to greaterpassenger growth (4.6 per cent) than growth in aeronautical operating expenses(1.8 per cent).− Since 2001-02, Brisbane Airport’s aeronautical operating expenses per passengerhave increased by 44.4 per cent from $3.84 per passenger. When adjusted forinflation, the increase in aeronautical operating expenses per passenger since2001-02 is 10.2 per cent, which represents an average annual increase of1.0 per cent.• In 2011-12, Melbourne Airport’s aeronautical operating expenses per passenger saw thelargest increase of the five airports at 17.3 per cent. This was a result of total aeronauticaloperating expenses increasing (17.5 per cent) at a faster rate than passenger volumes(0.2 per cent). Higher salaries and depreciation charges were the main contributors to theincrease in operating expenses at Melbourne Airport in 2011-12. Average salaries in2011-12 were 9.4 per cent higher than the previous year. Melbourne Airport noted thatincreases in these cost categories were driven by activities associated with the airport’sexpansion, specifically investing in new aeronautical assets and accommodatingpassenger growth. Melbourne Airport continued to have the lowest aeronautical operatingexpenses per passenger at $5.20 per passenger in 2011-12, compared to $4.43 perpassenger in 2010-11.− Since 2001-02, Melbourne Airport’s aeronautical operating expenses perpassenger have increased by 48.9 per cent from $3.49 per passenger. Whenadjusted for inflation, this increase is 13.6 per cent, which represents an averageannual increase of 1.3 per cent. This is the second largest percentage increase inaeronautical operating expenses among the monitored airports since 2001-02.• Perth Airport’s aeronautical operating expenses per passenger increased by 5.6 per centfrom $5.44 per passenger in 2010-11 to $5.74 per passenger in 2011-12. This was thesecond largest increase in aeronautical operating expenses per passenger of the fiveairports in 2011-12.− Since 2001-02, Perth Airport’s aeronautical operating expenses per passengerhave increased by 42.8 per cent from $4.02 per passenger. It should be noted thatsome of the decrease in aeronautical operating expenses during 2007-08 was dueto the reversal of a technical services fee in that year. Perth Airport accrued theexpense in 2006-07 but subsequently reversed the amount in 2007-08, as it wasnot required to be paid. When adjusted for inflation, the increase in aeronauticaloperating expenses per passenger since 2001-02 is 8.9 per cent, which representsan average annual increase of 0.9 per cent.
  • 56. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services31• Sydney Airport continued to report the highest operating expenses per passenger at $7.63per passenger in 2011-12, increasing by 0.8 per cent from $7.57 per passenger in 2010-11.− Since 2001-02, Sydney Airport’s aeronautical operating expenses per passengerhave increased by 16.5 per cent from $6.55 per passenger. This is the lowestpercentage increase in aeronautical operating expenses per passenger among thefive monitored airports since 2001-02.− When adjusted for inflation, Sydney Airport has had a decrease of 11.1 per cent inaeronautical operating expenses per passenger since 2001-02, which representsan average annual decrease of 1.2 per cent. Sydney Airport is the only monitoredairport to report declining aeronautical operating expenses per passenger since2001-02, when adjusted for inflation.Aeronautical operating expenses per passenger under the line in the sandapproachThe ACCC required airport operators to provide additional information relating to theaeronautical asset base under the line in the sand (LIS) approach for the first time in 2007-08,as discussed in appendix A.7. Under this approach, the value of an airport’s aeronautical assetbase for monitoring purposes is the value of tangible non-current aeronautical assets reportedto the ACCC at 30 June 2005—plus new investments, less depreciation and disposals.Under the LIS approach, aeronautical operating expenses were lower for Adelaide, Brisbaneand Sydney airports in 2011-12 compared to non-LIS values. However, Melbourne and Perthairports’ values were no different under the LIS approach as they had no revaluations of theiraeronautical assets recorded in the regulatory accounts during the relevant periods. Adelaide,Brisbane and Sydney airports’ aeronautical operating expenses per passenger under the LISapproach were $6.41, $5.33 and $7.42 respectively in 2011-12.However, some of the airports’ increased costs are associated with increased governmentmandated security requirements. Chart 1.3.8 below shows unit costs less costs associated withgovernment mandated security expenses.Costs of providing aeronautical services excluding security costsAs noted, additional government mandated security requirements have contributed to theairports’ costs (and associated revenue). Given that government security requirements do notreflect decisions made by airport operators, the ACCC also reports on aeronautical operatingexpenses per passenger excluding security to provide an indication of the unit costs incurredby airports that reflect the airport operators’ decisions.
  • 57. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1232Chart 1.4.12: Aeronautical operating expenses per passenger excluding security (unitcosts excluding security), 2001-02 to 2011-12Chart 1.4.13: Aeronautical operating expenses per passenger in real terms andexcluding security (unit costs excluding security), 2001-02 to 2011-12Note: 2001-02 is used as the base yearKey observations from charts 1.4.12 and 1.4.13 include:• With the exception of Brisbane Airport, all other monitored airports reported an increase inaeronautical operating expenses per passenger (excluding security) in 2011-12. Comparedto 2010-11, changes in the airports aeronautical operating expenses per passenger(excluding security) ranged from a decrease of 3.0 per cent at Brisbane Airport to anincrease of 20.5 per cent at Melbourne Airport.$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 58. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services33• Adelaide Airport’s aeronautical operating expenses per passenger (excluding security)increased by 4.0 per cent from $4.75 per passenger in 2010-11 to $4.94 per passenger in2011-12.− Since 2001-02, Adelaide Airport experienced the largest percentage increase inaeronautical operating expenses per passenger (excluding security), increasing by65.4 per cent from $2.99 per passenger. When adjusted for inflation, the increasein aeronautical operating expenses per passenger (excluding security) since2001-02 is 26.2 per cent.− As noted in box 1.2.1, Adelaide Airport experienced a significant increase inaeronautical operating expenses in 2005-06 and 2006-07. Between 2006-07 and2011-12, Adelaide Airport’s aeronautical operating expenses per passenger(excluding security) increased by 2.6 per cent. Adelaide Airport has experiencedthe lowest percentage growth in aeronautical operating expenses per passenger(excluding security) over these years among the monitored airports.• Brisbane Airport was the only monitored airport to report lower aeronautical operatingexpenses per passenger (excluding security) in 2011-12, decreasing by 3.0 per cent from$4.67 per passenger in 2010-11 to $4.53 per passenger in 2011-12.− Since 2001-02, Brisbane Airport’s aeronautical operating expenses per passenger(excluding security) have increased by 40.1 per cent from $3.23 per passenger.When adjusted for inflation, the increase in aeronautical operating expenses perpassenger (excluding security) since 2001-02 is 6.9 per cent, which represents anaverage annual increase of 0.7 per cent.• In 2011-12, Melbourne Airport’s aeronautical operating expenses per passenger (excludingsecurity) had the largest increase among the monitored airports at 20.5 per cent. As noted,higher salaries and depreciation charges contributed to the increase in aeronauticaloperating expenses at Melbourne Airport. In 2011-12, Melbourne Airport continued to havethe lowest aeronautical operating expenses per passenger among the monitored airports,at $4.17 per passenger, compared to $3.46 per passenger in 2010-11.− Since 2001-02, Melbourne Airport’s aeronautical operating expenses perpassenger (excluding security) have increased by 40.2 per cent from $2.98 perpassenger. When adjusted for inflation, the increase in aeronautical operatingexpenses per passenger (excluding security) since 2001-02 is 6.9 per cent, whichrepresents an average annual increase of 0.7 per cent.• Perth Airport’s aeronautical operating expenses per passenger (excluding security)increased by 10.1 per cent from $3.84 per passenger in 2010-11 to $4.23 per passenger in2011-12. This was the second largest increase in aeronautical operating expenses perpassenger (excluding security) among the monitored airports.− Since 2001-02, Perth Airport’s aeronautical operating expenses per passenger(excluding security) have increased by 41.1 per cent from $3.00 per passenger.When adjusted for inflation, the increase is 7.6 per cent, which represents anaverage annual increase of 0.7 per cent. This is the second largest percentageincrease in aeronautical operating expenses per passenger (excluding security)among the five monitored airports since 2001-02.• Sydney Airport continued to report the highest aeronautical operating expenses perpassenger (excluding security) at $5.53 per passenger in 2011-12, increasing by0.5 per cent from $5.50 per passenger in 2010-11.
  • 59. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1234− Since 2001-02, Sydney Airport’s aeronautical operating expenses per passenger(excluding security) have decreased by 10.5 per cent from $6.18 per passenger.Sydney Airport is the only monitored airport to report a decrease in aeronauticaloperating expenses per passenger (excluding security) since 2001-02. Whenadjusted for inflation, the decrease in aeronautical operating expenses perpassenger (excluding security) since 2001-02 is 31.7 per cent, which represents anaverage annual decrease of 3.7 per cent.Comparison of aeronautical operating expenses and total airport operatingexpensesTable 1.4.2: Comparison of aeronautical and total airport operating expenses at themonitored airports, 2001-02 and 2011-12Adelaide Brisbane Melbourne Perth SydneyExpenses2001-02($million)Aeronautical 14.6 47.3 57.6 19.5 159.4Total airport 27.5 72.1 92.8 37.7 238.9Aeronautical as% of total 52.9% 65.6% 62.1% 51.6% 66.7%Expenses2011-12($million)Aeronautical 46.0 117.6 147.6 76.5 277.2Total airport 76.0 198.1 219.3 145.7 384.9Aeronautical as% of total 60.5% 59.4% 67.3% 52.5% 72.0%Key observations from table 1.4.2 include:• Aeronautical operating expenses as a proportion of total airport operating expenses haveincreased at all monitored airports since 2001-02, except for Brisbane Airport. The fivemonitored airports reported combined total airport operating expenses of $1.0 billion in2011-12—an increase of 6.9 per cent from $957.7 million in 2010-11.• Adelaide Airport’s total airport operating expenses were the smallest of the monitoredairports since 2001-02, and have increased in every year since 2001-02, except for2009-10, when total airport operating expenses decreased by 0.2 per cent. Aeronauticaloperating expenses as a proportion of total airport operating expenses have rangedbetween 52.9 per cent and 66.5 per cent since 2001-02.• Brisbane Airport’s total airport operating expenses have increased in every year since2001-02 and by an average of 10.6 per cent per annum. Aeronautical operating expensesas a proportion of total airport operating expenses have ranged between 59.4 per cent and66.0 per cent since 2001-02.• Melbourne Airport’s total airport operating expenses have increased in every year since2001-02 and by an average of 9.0 per cent per annum. Aeronautical operating expenses asa proportion of total airport operating expenses have ranged between 56.2 per cent and67.3 per cent since 2001-02.
  • 60. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services35• Perth Airport’s total airport operating expenses increased in every year since 2001-02,except for 2005-06 and 2007-08. Aeronautical operating expenses as a proportion of totalairport operating expenses have ranged between 43.6 per cent and 55.9 per cent since2001-02.• Since 2001-02, Sydney Airport’s total airport operating expenses have been the largest ofthe monitored airports, and have increased in every year since 2001-02, except for2002-03 and 2004-05. Aeronautical operating expenses as a proportion of total airportoperating expenses have ranged between 66.7 per cent and 73.1 per cent since 2001-02.1.4.5 Aeronautical marginsAeronautical operating margin is calculated as aeronautical revenue minus aeronauticaloperating expenses, and provides a measure of earnings after depreciation but before interest,tax and amortisation (EBITA). Aeronautical operating margin per passenger provides oneindicator of the airports’ profitability. Another indicator—EBITA on average tangible non-currentassets—is discussed in section 1.4.6. It should be noted, however, that both of these indicatorsare based on regulatory accounts prepared under standard accounting practices and,therefore, it is difficult to interpret returns in terms of whether or not prices are generatingrevenue consistent with the efficient long-run costs of providing the services.Further, the indicators are influenced by the different approaches airports have taken to valuingtheir assets and changes in accounting standards and regulations over time. As noted, tofacilitate monitoring of returns, an LIS approach to asset values has been used since2007-08.29Over the long-term, significant fixed aeronautical assets (such as buildings, plantand machinery) will be fully depreciated and replaced, while the value of the lease onaeronautical land will also be depreciated and become a smaller proportion of the total value ofaeronautical assets. Therefore, over the long-term, the LIS approach would be expected toreduce the effect of the different approaches taken by airports in valuing their assets.Unlike average prices and unit costs above, aeronautical operating margin per passenger hasnot been presented excluding security. This is because government mandated securityrevenue is set to recover the costs associated with security charges and does not affect theoverall profitability of the airports.It should be noted that prior to 2011-12, Perth Airport did not apply passenger charges to largeaircraft operating in the general aviation precinct and did not receive passenger numbers fromairlines in respect of these aircraft. As a result, care should be taken when making comparisonsof aeronautical operating margin on a per passenger basis for 2011-12 with earlier years.29Under the line in the sand approach, the value of an airports’ aeronautical asset base for monitoring purposes is thevalue of tangible non-current assets reported to the ACCC at 30 June 2005 (which includes any revaluations by theairports up to this point), plus new investments, less depreciation and disposals.
  • 61. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1236Chart 1.4.14: Aeronautical operating margin per passenger, 2001-02 to 2011-12Chart 1.4.15: Aeronautical operating margin per passenger in real terms,2001-02 to 2011-12Note: 2001-02 is used as the base yearKey observations from charts 1.4.14 and 1.4.15 include:• Adelaide, Melbourne and Perth airports reported a decrease in aeronautical operatingmargin per passenger in 2011-12, whereas Brisbane and Sydney airports reported anincrease. Compared to 2010-11, changes in the airports aeronautical operating margin perpassenger ranged from a decrease of 14.8 per cent at Adelaide Airport to an increase of9.2 per cent at Brisbane Airport.− The monitored airports reported significant increases in aeronautical revenue perpassenger during 2001-02 and 2002-03. This was partly due to Brisbane,Melbourne and Perth airports increasing prices shortly after price caps wereremoved on 1 July 2002, Sydney Airport increasing prices due to an approved-$1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport-$1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 62. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services37price notification during 2001 and Adelaide Airport increasing prices shortly after itsprice cap was removed in October 2001. This led to significant increases inaeronautical operating margin per passenger in these years.• In 2011-12, Adelaide Airport continued to have the second highest aeronautical operatingmargin per passenger at $4.53 per passenger, despite experiencing the largest percentagedecrease in operating margin per passenger relative to the previous year. AdelaideAirport’s aeronautical operating margin per passenger decreased by 14.8 per cent in2011-12, from $5.31 per passenger in 2010-11.− Adelaide Airport reported a negative operating margin per passenger in 2001-02,with positive values reported since that year. Since 2002-03, Adelaide Airport hashad the largest percentage increase in aeronautical operating margin perpassenger, increasing by 430.0 per cent from $0.85 per passenger. When adjustedfor inflation, the increase in aeronautical operating margin per passenger since2002-03 is 314.9 per cent.− As noted in box 1.2.1, Adelaide Airport experienced a significant increase inaeronautical operating margin in 2005-06 and 2006-07. Between 2006-07 and2011-12, Adelaide Airport’s aeronautical operating margin per passenger hasdeclined by 4.5 per cent.• Brisbane Airport reported the highest increase in aeronautical operating margin on a perpassenger basis in 2011-12, increasing by 9.2 per cent from $4.10 per passenger in2010-11 to $4.47 per passenger in 2011-12.− Brisbane Airport reported a negative operating margin per passenger in 2001-02,with positive values reported since that year. Since 2002-03, Brisbane Airport’saeronautical operating margin per passenger has increased by 337.9 per cent from$1.02 per passenger. When adjusted for inflation, the increase in aeronauticaloperating margin per passenger since 2002-03 is 242.8 per cent, which representsan average annual increase of 13.1 per cent.• In 2011-12, Melbourne Airport reported a decrease in its aeronautical operating margin perpassenger for the fourth consecutive year. Melbourne Airport’s aeronautical operatingmargin per passenger decreased by 9.9 per cent in 2011-12, from $3.75 per passenger in2010-11 to $3.38 per passenger in 2011-12.− Since 2001-02, Melbourne Airport’s aeronautical operating margin per passengerhas increased by 588.0 per cent from $0.49 per passenger. However, the majorityof this increase occurred during 2002-03. Since 2002-03, Melbourne Airport’saeronautical operating margin per passenger has increased by 43.1 per cent from$2.36 per passenger. When adjusted for inflation, the increase in aeronauticaloperating margin per passenger since 2002-03 is 12.0 per cent, which representsan average annual increase of 1.1 per cent.• In 2011-12, Perth Airport had the lowest aeronautical operating margin per passenger ofthe five airports at $3.12 per passenger. This represents a fall in aeronautical operatingmargin per passenger of 12.5 per cent from $3.56 per passenger in 2010-11.− Since 2001-02, Perth Airport’s aeronautical operating margin per passenger hasincreased by 1232.9 per cent from $0.23 per passenger. The majority of thisincrease occurred during 2002-03. Since 2002-03, Perth Airport’s aeronauticaloperating margin per passenger has increased by 0.93 per cent from $3.09 perpassenger. This is the lowest percentage increase in operating margin since2002-03 among the monitored airports. When adjusted for inflation, Perth Airport
  • 63. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1238has had a decrease in aeronautical operating margin per passenger since 2002-03of 21.0 per cent, which represents an average annual decrease of 2.3 per cent.• Sydney Airport continued to have the highest aeronautical operating margin per passengerat $7.33 per passenger in 2011-12, increasing by 6.4 per cent from $6.89 per passenger in2010-11.− Since 2001-02, Sydney Airport’s aeronautical operating margin per passenger hasincreased by 157.7 per cent from $2.84 per passenger. A large percentage of thisincrease occurred during 2002-03. Since 2002-03, Sydney Airport’s aeronauticaloperating margin per passenger has increased by 94.6 per cent from $3.77 perpassenger. When adjusted for inflation, the increase in aeronautical operatingmargin per passenger since 2002-03 is 52.3 per cent, which represents an averageannual increase of 4.3 per cent.Aeronautical operating margin per passenger under the line in the sandapproach• Under the LIS approach, Adelaide, Brisbane and Sydney airports had a higher aeronauticaloperating margin per passenger as a result of lower aeronautical operating expenses perpassenger in 2011-12 (as discussed above).• Sydney Airport maintained the highest operating margin per passenger ($7.54) comparedto the other airports under the LIS approach. Adelaide and Brisbane airports’ aeronauticaloperating margin per passenger under the LIS approach were $4.60 and $4.70 respectivelyin 2011-12.Aeronautical operating margin and total airport operating marginTable 1.4.3 displays aeronautical operating margins and total airport operating margins, inorder to compare the profitability of the airports’ aeronautical operations in the context of theprofitability of the total airport. A comparison of the proportion of total airport operating marginprovided by aeronautical services across airports provides a measure of the relative profitabilityof aeronautical services at each monitored airport.Table 1.4.3: Aeronautical and total airport operating margin at the monitored airports,2001-02 and 2011-12Adelaide Brisbane Melbourne Perth SydneyMargin2001-02($million)Aeronautical (3.2) (2.1) 8.1 1.1 69.2Total airport 12.1 74.8 104.2 38.4 215.1Aeronautical as% of total NA NA 7.8% 2.9% 32.2%Margin2011-12($million)Aeronautical 32.1 94.8 96.0 41.5 266.3Total airport 69.3 288.0 354.0 576.1 619.1Aeronautical as% of total 46.4% 32.9% 27.1% 7.2% 43.0%
  • 64. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services39Key observations from table 1.4.3 include:• Aeronautical operating margin as a proportion of total airport operating margin hasincreased at all of the monitored airports since 2001-02. The five monitored airportsreported a combined total airport operating margin of $1.9 billion in 2011-12—an increaseof 30.2 per cent from $1.5 billion in 2010-11.− The monitored airports reported significant increases in aeronautical revenueduring 2001-02 and 2002-03. This was partly due to Brisbane, Melbourne andPerth airports increasing prices shortly after price caps were removed on 1 July2002, Sydney Airport increasing prices due to an approved price notification during2001 and Adelaide Airport increasing prices shortly after its price cap was removedin October 2001. This led to significant increases in aeronautical operating marginin these years.• Since 2001-02, Adelaide Airport’s total airport operating margin has been the smallest ofthe monitored airports, and has increased in most years during this period. Adelaide Airporthad a negative aeronautical operating margin in 2001-02 but has not had a negativeaeronautical operating margin since that year. Adelaide Airport’s aeronautical operatingmargin as a proportion of total airport operating margin has ranged between 21.3 per centand 58.9 per cent since 2002-03.• Brisbane Airport’s total airport operating margin has increased in every year since 2002-03,except for 2008-09. Brisbane Airport had a negative aeronautical operating margin in2001-02 and has not had a negative aeronautical operating margin since that year.Aeronautical operating margin as a proportion of total airport operating margin has rangedbetween 11.3 per cent and 32.9 per cent since 2002-03.• Melbourne Airport’s total airport operating margin has increased in every year since2001-02 and by an average of 13.0 per cent per annum. Aeronautical operating margin asa proportion of total airport operating margin was 7.8 per cent in 2001-02 and has rangedbetween 27.1 per cent and 33.8 per cent since 2002-03.• Perth Airport’s total airport operating margin has increased in most years since 2001-02.Aeronautical operating margin as a proportion of total airport operating margin was2.9 per cent in 2001-02 and has ranged between 15.5 per cent and 42.6 per cent in theyears from 2002-03 to 2010-11. In 2011-12, aeronautical operating margin as a proportionof total airport operating margin was at its lowest level since 2002-03, at 7.2 per cent. Thiswas due to a 233.6 per cent increase in total airport operating margin during 2011-12.− Perth Airport noted that its 2011-12 total airport revenue included an increase infair value of non-aeronautical investment property of around $337.5 million as at30 June 2012. Perth Airport stated that the increase was primarily due to a changein the investment methodology used for deriving fair value for an investment andthat the change materially impacts on total airport return measurements. Excludingthe revaluation, aeronautical operating margin as a proportion of total airportoperating margin in 2011-12 was 20.9 per cent, slightly down from 23.6 per cent in2010-11.• Sydney Airport’s total airport operating margin has increased in every year since 2001-02,except for 2009-10, when total airport operating margin decreased by 32.9 per cent.Aeronautical operating margin as a proportion of total airport operating margin has rangedbetween 25.6 per cent and 43.0 per cent since 2001-02.
  • 65. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-12401.4.6 Return on assetsEBITA on average tangible non-current assets (return on assets) provides another indicator ofthe airports’ profitability. As previously noted, however, this indicator is based on regulatoryaccounts prepared under standard accounting practices and therefore, it is difficult to assessthese returns from an economic efficiency perspective. Further, this indicator is influenced bythe different approaches airports have taken to valuing their assets and changes in accountingstandards and regulations over time. Therefore, care should be taken when comparing returnsacross airports and over time.Chart 1.4.16: Return on assets for aeronautical services, 2001-02 to 2011-12Key observations from chart 1.4.16 include:• Adelaide Airport reported a 2.6 percentage point decrease in returns on aeronauticalassets from 10.2 per cent in 2010-11 to 7.6 per cent in 2011-12.− Since 2001-02, Adelaide Airport’s return on aeronautical assets has increased by10.1 percentage points from -2.5 per cent, due to earnings increasing by more thaninvestment in aeronautical assets.− Since 2006-07, when it opened its new multi-user terminal, Adelaide Airport’sreturn on aeronautical assets increased from 7.6 per cent to a peak of10.2 per cent in 2010-11, falling back to 7.6 per cent in 2011-12.• Brisbane Airport reported increased returns on aeronautical assets for the third consecutiveyear, increasing by 0.6 percentage points from 6.2 per cent in 2010-11 to 6.8 per cent in2011-12.− Since 2001-02, Brisbane Airport’s return on aeronautical assets has increased by7.2 percentage points from -0.4 per cent, due to earnings increasing by more thannet investment in aeronautical assets.• Melbourne Airport reported decreased returns on aeronautical assets for the fourthconsecutive year, decreasing by 2.2 percentage points from 12.3 per cent in 2010-11 to10.1 per cent in 2011-12. This change was due to earnings decreasing while netinvestment in aeronautical assets increasing.-4%-2%0%2%4%6%8%10%12%14%16%18%20%2001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 66. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services41− Since 2001-02, Melbourne Airport’s return on aeronautical assets has increased by8.2 percentage points from 1.9 per cent. The majority of this increase occurred in2002-03, when returns on aeronautical assets increased by 7.5 percentage points,due to a significant increase in aeronautical operating margin in that year.• Perth Airport reported a 1.9 percentage point decrease in its return on aeronautical assetsfrom 13.2 per cent in 2010-11 to 11.3 per cent in 2011-12. Perth Airport continued to havethe highest return on aeronautical assets among the five monitored airports.− Since 2001-02, Perth Airport’s return on aeronautical assets has increased by10.0 percentage points from 1.3 per cent. The majority of this increase occurred in2002-03, when Perth Airport’s returns on aeronautical assets increased by17.9 percentage points to reach a peak of 19.1 per cent, due to a significantincrease in aeronautical operating margin in that year.• Sydney Airport reported increased returns on aeronautical assets for the third consecutiveyear, increasing by 0.9 percentage points from 9.6 per cent in 2010-11 to 10.5 per cent in2011-12.− Since 2001-02, Sydney Airport’s return on aeronautical assets has increased by6.2 percentage points from 4.3 per cent, due to earnings increasing by more thaninvestment in aeronautical assets.Return on assets for aeronautical services under the line in the sand approach• Under the LIS approach, Adelaide, Brisbane and Sydney airports all had a higher return onaeronautical assets in 2011-12 when compared with the non-LIS values. Melbourne andPerth airports’ values were no different.• The greatest difference between the LIS values and non-LIS values in 2011-12 was atBrisbane Airport where return on assets under the LIS approach was higher at 9.4 per centcompared to 6.8 per cent for non-LIS (2.6 percentage points). This is because BrisbaneAirport’s aeronautical tangible non-current asset base was affected by the LIS approach toa greater extent than the other airports.Return on assets for total airport services• With the exception of Perth and Sydney airports, the monitored airports’ returns on totalairport assets decreased in 2011-12. Compared to the previous year, the change in theairports’ returns on total airport assets ranged from a decrease of 4.1 percentage points atAdelaide Airport to an increase of 30.3 percentage points at Perth Airport.• In 2011-12, Perth Airport’s return on total airport assets increased to 50.5 per cent due tothe effects of a $377 million revaluation in the fair value of an investment property. Understandard accounting rules, the effects of revaluations of investment properties are reflectedin revenues and margins. The other airports’ returns on total airport assets ranged from10.0 per cent at Brisbane Airport to 17.5 per cent at Sydney Airport.• Under the LIS approach, the airports (excluding Perth and Melbourne airports) returns ontotal airport assets ranged from 11.5 per cent at Adelaide Airport to 16.6 per cent at SydneyAirport.
  • 67. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1242Risk and the airports’ returns on aeronautical services• In the 2009-10 and 2010-11 AMRs, the ACCC noted that airports are partially insulatedfrom the effects of economic shocks (such as the global financial crisis and naturaldisasters) that can reduce demand for air travel. Although these events and others, such asthe collapse of Ansett airlines in 2001, can reduce overall demand for air travel and insome instances, airport services30, the 2010-11 monitoring report presented data thathighlighted the relative stability of the airports’ returns on assets compared to the airlines’return on assets.31• Although airports, like airlines, earn revenue partly based on applying charges on a perpassenger basis, the airport’s risk is still partially insulated by the airlines. During lowerdemand periods, airlines can reduce airfares to stimulate demand. By managing passengernumbers this way, airlines are partially protecting the revenue stream of the airports. Thisalso allows the airports to continue to operate without lowering airline charges.• Data collected by the ACCC for the airport monitoring program over the past 10 years hasshown aeronautical revenue continuing to increase for all years including the year of theglobal financial crisis of 2008-09. Total aeronautical revenue for the monitored airportsincreased by 6.3 per cent in 2008-09 and by 8.8 per cent the following year. Airports arealso partly insulated from the effects of these types of events by long-term pricingagreements with the airlines.1.4.7 Aeronautical asset valuesAeronautical assets refer to assets held by the airports for the provision of primary airportfunctions, such as runways and terminal buildings. As noted above, aeronautical asset valuesare influenced by the different approaches airports have taken to valuing their assets andchanges in accounting standards and regulations over time. Therefore, care should be takenwhen comparing returns across airports and over time.In 2011-12, the airports collectively invested $547.4 million in aeronautical assets, an increaseof 61.2 per cent compared with investments of $339.5 million undertaken in 2010-11.30Productivity Commission, Inquiry Report in the Economic Regulation of Airport Services, No. 57, 14 December 2011.31ACCC, 2010-11 Airport Monitoring report, pages xi & xii. (The ACCC assessed the standard deviation of the airports’and airlines’ returns on assets as an indicator of their volatility and risk. An aggregate total with the larger standarddeviation means that there is a greater amount of variability of values than compared to the aggregate with a smallerstandard of deviation. The smaller value is representative of firms with a more stable income stream and facing lessrisk).
  • 68. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services43Chart 1.4.17: Aeronautical tangible non-current assets, 2001-02 to 2011-12Key observations from chart 1.4.17 include:• In 2011-12, the five monitored airports held a combined $5.8 billion worth of aeronauticaltangible non-current assets—an increase of 4.6 per cent from the previous year. With theexception of Sydney Airport, the monitored airports’ aeronautical tangible non-current assetvalues increased, ranging from 6.5 per cent at Brisbane Airport to 17.7 per cent at PerthAirport. Sydney Airport’s aeronautical tangible non-current asset value decreased by1.9 per cent in 2011-12.• Adelaide Airport reported around $59.9 million in additions to aeronautical assets in2011-12. These additions were to land improvement, plant and machinery and work inprogress. The value of Adelaide Airport’s aeronautical asset base increased by11.7 per cent in 2011-12, from $399.3 million in 2010-11 to $445.9 million.− Since 2001-02, Adelaide Airport has increased the value of its aeronautical assetbase by 243.1 per cent from $130.0 million. The most significant increase in thevalue of Adelaide Airport’s aeronautical asset base occurred in 2004-05, when itincreased by 134.2 per cent due to investment in its multi-user terminal.• Brisbane Airport reported $155.9 million in additions to aeronautical assets in 2011-12. Thevalue of Brisbane Airport’s aeronautical asset base increased by 6.5 per cent in 2011-12,from around $1.3 billion in 2010-11 to around $1.4 billion. Brisbane Airport has asignificantly higher aeronautical asset value compared to Adelaide ($455.9 million),Melbourne ($1.0 billion) and Perth ($397.8 million) airports.− Since 2001-02, Brisbane Airport has increased the value of its aeronautical assetbase by 150.3 per cent from $574.3 million. The most significant increase in thevalue of Brisbane Airport’s aeronautical asset base occurred in 2004-05, when thevalue increased by 57.0 per cent, which was primarily due to the application of anew financial reporting standard.• Melbourne Airport had around $155.8 million in additions to aeronautical assets in 2011-12.Additions were to buildings, land improvement and plant and machinery. The value ofMelbourne Airport’s aeronautical asset base increased by 12.1 per cent in 2011-12, from$898.5 million in 2010-11 to just over $1.0 billion.0400800120016002000240028002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12$millionAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 69. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1244− Since 2001-02, Melbourne Airport has increased the value of its aeronautical assetbase by 136.0 per cent from $426.7 million. The most significant increase occurredin 2008-09, when the value increased by 23.0 per cent, which was due toMelbourne Airport commencing an expansion of the international terminal inJanuary 2008.32• Perth Airport had $75.6 million of additions to aeronautical assets in 2011-12. Additionswere to buildings, plant and machinery, work in progress and other assets. The value ofPerth Airport’s aeronautical asset base increased by 17.7 per cent in 2011-12, from$337.9 million in 2010-11 to $397.8 million.− Since 2001-02, Perth Airport has increased the value of its aeronautical asset baseby 357.7 per cent from $86.9 million. The most significant increase in the value ofPerth Airport’s aeronautical asset base occurred in 2003-04, when the valueincreased by 105.3 per cent, which was due to a significant upwards revaluation ofaeronautical assets.− Perth Airport has also been substantially increasing its aeronautical asset baseover the last four years. Since 2007-08, Perth Airport has increased the value of itsaeronautical asset base by an average of 18.0 per cent per annum due to newinvestments in terminals and airside improvements.• Sydney Airport had around $100.2 million in additions to aeronautical assets in 2011-12.Additions were to buildings, land improvements, plant and machinery and other assets.Nevertheless, the value of Sydney Airport’s aeronautical asset base decreased by1.9 per cent in 2011-12, from around $2.6 billion in 2010-11 to around $2.5 billion.− Since 2001-02, Sydney Airport has increased the value of its aeronautical assetbase by 60.2 per cent from $1.6 billion. The most significant increase in the valueof Sydney Airport’s aeronautical asset base occurred in 2005-06, when the valueincreased by 40.0 per cent, which was primarily due to the application of a newfinancial reporting standard.Additions as a percentage of aeronautical assetsThe indicator ‘additions as a percentage of tangible non-current assets for aeronauticalservices’ is used as a measure of investment relative to airport size. As with returns, thedifferent approaches taken by airports in valuing their assets will also affect this measure,although, over time, the LIS approach will also reduce the effects.32Australian Pacific Airports Corporation Annual Report 2008, p. 6.
  • 70. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services45Chart 1.4.18: Additions as a percentage of tangible non-current assets for aeronauticalservices, 2001-02 to 2011-12Key observations from chart 1.4.18 include:• With the exception of Perth Airport, all other monitored airports reported an increase inadditions as a percentage of tangible non-current assets for aeronautical services in2011-12. However, Perth Airport continued to have the highest additions as a percentageof tangible non-current aeronautical assets.• Adelaide Airport’s additions as a percentage of tangible aeronautical non-current assetsincreased to 13.4 per cent in 2011-12, compared to 9.5 per cent in 2010-11. AdelaideAirport undertook significant additions between 2003-04 and 2004-05, related to theconstruction of the multi-user terminal during this period. As a result, Adelaide Airport’sadditions as a percentage of tangible aeronautical non-current assets reached a peak in2004-05 of 32.8 per cent.• Between 2001-02 and 2005-06, Brisbane Airport reported additions as a percentage oftangible aeronautical non-current assets ranging between 1.5 per cent and 3.5 per cent.Since 2006-07, Brisbane Airport has had significantly higher additions as a percentage oftangible aeronautical non-current assets—additions during this period averaged11.6 per cent of Brisbane Airport’s tangible aeronautical non-current assets. In 2011-12most recent year, Brisbane Airport’s additions as a percentage of tangible aeronauticalnon-current assets increased to 10.8 per cent, compared to 4.7 per cent in 2010-11.• Melbourne Airport’s additions as a percentage of tangible aeronautical non-current assetsincreased to 15.5 per cent in 2011-12, compared to 11.5 per cent in 2010-11. MelbourneAirport’s additions as a percentage of tangible aeronautical non-current assets reached apeak in 2008-09 of 22.1 per cent.• Between 2001-02 and 2006-07, Perth Airport’s additions averaged 7.1 per cent of itstangible aeronautical non-current assets. Since 2007-08, Perth Airport has had significantlyhigher additions as a percentage of tangible aeronautical non-current assets—on averageadditions during this period were equivalent to 17.8 per cent of Perth Airport’s tangibleaeronautical non-current assets. In 2011-12, Perth Airport was the only monitored airport toreport a decrease in additions as a percentage of tangible aeronautical non-current assets,decreasing slightly from 20.6 per cent in 2010-11 to 19.0 per cent in 2011-12.0%5%10%15%20%25%30%35%40%2001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney Airport
  • 71. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1246• Sydney Airport’s additions as a percentage of tangible aeronautical non-current assetsincreased to 4.0 per cent in 2011-12, compared to 2.5 per cent in 2010-11. SydneyAirport’s additions as a percentage of tangible aeronautical non-current assets reached apeak in 2008-09 of 13.5 per cent.Additions as a percentage of aeronautical assets under the line in the sand(LIS) approach• Under the LIS approach, additions as a percentage of tangible aeronautical non-currentassets for aeronautical services were higher at Adelaide and Brisbane airports and mostlyunchanged at Sydney Airport.• In 2011-12, Adelaide Airport’s additions as a percentage of tangible aeronautical non-current assets were 15.6 per cent under the LIS approach, compared to 13.4 per centunder the non-LIS approach. Brisbane Airport’s additions as a percentage of tangibleaeronautical non-current assets were 14.2 per cent under the LIS approach in 2011-12,compared to 10.8 per cent under the non-LIS approach.• Melbourne and Perth airports’ values were no different under the LIS approach as they hadno revaluations of their aeronautical assets recorded in the regulatory accounts during therelevant periods.• Sydney Airport’s additions as a percentage of tangible aeronautical non-current assets foraeronautical services were mostly unchanged under the LIS approach in 2011-12,decreasing slightly although remaining at around 4.0 per cent.1.5 Quality of service monitoring resultsInformation on quality of service was collected for each airport, including quantitative measuresof utilisation of services and facilities and results from surveys of airlines, border agencies33and passengers. The results obtained for each airport were aggregated to give an overall viewof the quality of service provided by the airport operators over the past 11 years.The overall view of quality of service can, however, be broken down into the relevant users’average ratings to provide an indication of their views of the airports’ quality of service.Importantly, the ACCC notes that overall ratings are not necessarily a direct indicator of thequality of service that the airport operators provide. This is because passengers’ perceptions ofthe airports’ quality of service can be influenced by the services also provided by airlines andborder agencies. Further, analysis of the supply of airport services to border agencies iscomplicated by the fact that airports have regulatory obligations to provide certain services.In contrast, airports provide services directly to airlines under commercial arrangements.Airlines are therefore in a position to make an informed assessment of quality against price. Assuch, airline survey ratings for quality can provide a more direct indication of whether an airporthas provided a satisfactory quality of service.1.5.1 Overall airport ratings for quality of serviceChart 1.5.1 shows the overall rating of quality of service for the monitored airportsencompassing the views of airlines, passengers, border agencies and objective indicators.33The border agencies surveyed are; the Australian Customs and Border Protection Service, the Department ofAgriculture, Fisheries and Forestry Biosecurity and the Department of Immigration and Citizenship.
  • 72. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services47Chart 1.5.1: Overall ratings of quality of service, 2001-02 to 2011-12Key observations from chart 1.5.1 include:• Overall ratings by airlines, passengers and government agencies of the monitored airports’quality of service fell for all airports in 2011-12, with all airports receiving an overall rating ofsatisfactory.• The observations for each airport, in order of overall rating by airlines, passengers andgovernment agencies, are below.− Brisbane Airport had the highest overall rating for quality of service in 2011-12,despite a decrease in its rating from good in 2010-11 to satisfactory in 2011-12. Ofthe five monitored airports, Brisbane Airport has been rated first in the overallratings results in every year since 2002-03, except for 2006-07 when it was ratedequal first with Adelaide Airport.− In 2011-12, Adelaide Airport was rated second among the monitored airports forquality of service for the second consecutive year, despite its overall ratingdecreasing within the satisfactory range. Since 2001-02, Adelaide Airport has beenrated satisfactory in every year.− Melbourne Airport remained the third rated airport for quality of service in 2011-12,for the second consecutive year. Melbourne Airport’s overall rating decreasedwithin the satisfactory range in 2011-12 and has remained rated as satisfactory inevery year since 2001-02.− Perth Airport’s overall rating for quality of service decreased within the satisfactoryrange in 2011-12, although Perth Airport received its lowest overall rating since2001-02. Perth Airport has been rated as satisfactory in every year since 2001-02.− In 2011-12, Sydney Airport was rated last among the monitored airports for qualityof service for the seventh consecutive year, with its overall rating decreasing withinthe satisfactory range. Since 2001-02, Sydney Airport has been rated assatisfactory in every year.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportExcellentGoodSatisfactoryPoorVery poor
  • 73. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-12481.5.2 Passengers’ ratings of the airports’ quality of serviceThe demand for airport services is derived from the demand for airline services, which in turn isdriven by passengers. As such, while passengers’ perceptions may be affected by servicesprovided by parties other than airports, they are an important indicator of the quality of serviceprovided at airports.Chart 1.5.2: Average of passenger survey ratings, 2001-02 to 2011-12Key observations from chart 1.5.2 include:• In 2011-12, passengers rated Brisbane and Melbourne airports as good, while Adelaide,Perth and Sydney airports were rated as satisfactory. With the exception of Sydney Airport,the passenger rating for each airport decreased in 2011-12.• Interestingly, passengers’ perceptions were, in general, higher than the overall ratings ofquality of service for the monitored airports.• The observations for each airport, in order of average passenger rating for 2011-12, arebelow.− Brisbane Airport’s average passenger rating dropped slightly in 2011-12, thoughremained rated as good. Brisbane Airport was rated first among the five monitoredairports in regards to its passenger survey results in 2011-12 as well as in thepreceding three years. Passengers have rated Brisbane Airport as good in everyyear since 2001-02, except for 2007-08, when the average passenger ratingdecreased to satisfactory.− Melbourne Airport’s rating by passengers decreased slightly in 2011-12, thoughremained within the good range. Melbourne Airport was rated second among thefive monitored airports in 2011-12. Since 2001-02, passengers have ratedMelbourne Airport as good in every year.− Perth Airports’ average passenger rating decreased from good in 2010-11 tosatisfactory in 2011-12. Since 2001-02, this was the only year that passengers didnot rate Perth Airport as good.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportExcellentGoodSatisfactoryPoorVery poor
  • 74. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services49− Adelaide Airport’s average passenger rating decreased within the satisfactoryrange in 2011-12 and was rated last along with Sydney Airport among the fivemonitored airports. Passengers have rated Adelaide Airport as satisfactory in everyyear since 2001-02.− In 2011-12, Sydney Airport was rated last out of the monitored airports bypassengers for the eighth consecutive year, despite receiving its highest ratingsince being rated as good in 2001-02. In 2011-12, Sydney and Adelaide airportswere rated equal last. Sydney Airport’s average passenger rating increased withinthe satisfactory range in 2011-12, and was the only airport that received anincreased passenger rating in 2011-12. Passengers have rated Sydney Airport assatisfactory in every year since 2002-03.1.5.3 Airlines’ ratings of the airports’ quality of serviceAirline survey results can provide a more direct indication of whether airports have providedquality of service at a satisfactory level for airside services (such as runways and aircraftparking facilities), as well as terminal services (such as check-in counters, aerobridges andbaggage processing facilities). While airports provide many of the services and facilities at theairports, the airlines also provide services that may influence the passenger experience.Therefore, airlines’ ratings of the airports can vary significantly from passengers’ perceptionsand provide another indicator of the airports’ quality of service.Chart 1.5.3: Average of airline survey ratings, 2001-02 to 2011-12Key observations from chart 1.5.3 include:• On average, airlines’ ratings of the airports services and facilities over the past 11 yearshave been lower than passengers’ perceptions over the same period. In 2011-12, airlines’rating of Adelaide, Brisbane and Sydney airports decreased, while airlines’ rating increasedat Melbourne Airport and were unchanged at Perth Airport.• The observations for each airport, in order of average airline rating for 2011-12, are below.− Adelaide Airport’s airline rating decreased slightly in 2011-12, though remainedrated as satisfactory. Adelaide Airport was rated first out of the five airports on01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportExcellentGoodSatisfactoryPoorVery poor
  • 75. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-1250quality of service provided to airlines in 2011-12. Since 2001-02, airlines have ratedAdelaide Airport as satisfactory in every period, except for 2002-03 and 2003-04,when airlines rated Adelaide Airport’s quality of service as poor.− Brisbane Airport’s airline rating decreased within the satisfactory range in 2011-12,leading to a rating of second out of the five airports. Airlines have rated BrisbaneAirport as satisfactory in every year since 2001-02, except for 2002-03, whenairlines rated Brisbane Airport’s quality of service as good.− Melbourne Airport was the only airport to receive an increase in its airline rating in2011-12, increasing within the satisfactory range to be rated third out of the fivemonitored airports. Since 2001-02, airlines have rated Melbourne Airport assatisfactory in every period.− Sydney Airport’s airline rating decreased from satisfactory in 2010-11 to poor in2011-12—giving the airport a rating of fourth in the most recent period. Since2001-02, airlines have rated Sydney Airport’s quality of service as eithersatisfactory or poor.− Perth Airport was rated last by airlines for quality of service, despite its ratingremaining unchanged at poor in 2011-12. This is the third consecutive year thatairlines have rated Perth Airport’s quality of service as poor and the secondconsecutive year that airlines have rated Perth Airport last out of the five airports.Since 2001-02, airlines have rated Perth Airport’s quality of service as eithersatisfactory or poor.1.5.4 Border agencies’ ratings of the airports’ quality of serviceBorder agencies are surveyed on services and facilities provided by airport operators to allowfor government inspection services (such as adequacy of areas for circulation and queuing,signage and desks). However, as noted, the relationship between the border agencies andairports is partly mandated by government and not subject to the same commercial relationshipas between airlines and airports.
  • 76. Airport Monitoring Report 2011-12 Overview of the monitoring results for aeronautical services51Chart 1.5.4: Average of border agencies’ survey ratings, 2001-02 to 2011-12Key observations from chart 1.5.4 include:• The observations for each airport, in order of average border agency rating for 2011-12,are below.− Adelaide Airport’s border agencies’ rating increased from satisfactory in 2010-11 togood in 2011-12. Adelaide Airport has been rated as either good or satisfactorysince it opened its multi-user terminal in 2005-06. Prior to 2005-06, borderagencies’ rated Adelaide Airport’s services and facilities as poor in every period.− Border agencies’ rated Brisbane Airport’s services and facilities as satisfactory forthe fifth consecutive year in 2011-12, with its rating increasing within thesatisfactory range. Since 2001-02, border agencies’ have rated Brisbane Airport’sservices and facilities as either satisfactory or poor.− Sydney Airport’s border agencies’ rating was unchanged at satisfactory in 2011-12,with border agencies rating Sydney Airport’s services and facilities as satisfactoryfor the third consecutive year. Since 2001-02, border agencies’ have rated SydneyAirport’s services and facilities as either satisfactory or poor, with the exception of arating of good in 2002-03 and 2003-04.− Perth Airport’s border agencies’ rating was unchanged at poor in 2011-12, withborder agencies rating Perth Airport’s services and facilities as poor for the fourthconsecutive year. Since 2001-02, border agencies’ have rated Perth Airport’sservices and facilities as either satisfactory or poor.− Border agencies’ rated Melbourne Airport’s services and facilities as poor for thesecond consecutive year in 2011-12, decreasing within the poor range. Since2001-02, border agencies’ have rated Melbourne Airport’s services and facilities aseither satisfactory or poor.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportExcellentGoodSatisfactoryPoorVery poor
  • 77. Overview of the monitoring results for aeronautical services Airport Monitoring Report 2011-12521.6 Price and quality outcomes for the airportsThe chart below provides a summary of the aeronautical revenue per passenger and overallratings for quality of service for each of the monitored airports in 2011-12.Chart 1.6.1: Aeronautical revenue per passenger and overall quality of service ratingsKey observations from chart 1.6.1 include:• Sydney Airport had the highest aeronautical revenue per passenger and the lowest overallrating for quality of service in 2011-12. In contrast, Melbourne Airport had the lowestaeronautical revenue per passenger but was third behind Brisbane and Adelaide airportsfor overall quality of service. It is noted, however, that all of the monitored airports’ overallratings for quality of service were within the satisfactory range.• Users rated Brisbane Airport the highest out of the monitored airports for overall quality ofservice, however, aeronautical revenue per passenger was third highest out of the fiveairports. Although Perth Airport had the second lowest overall rating for quality of service, italso had the second lowest aeronautical revenue per passenger.• Adelaide Airport had the second highest aeronautical revenue per passenger and wasrated second in overall quality of service. However, it should be noted that Adelaide Airportis the only monitored airport that does not have any DTLs. Importantly, the revenue frompassenger-related services and facilities provided within DTLs at the other monitoredairports are excluded from their aeronautical revenue, which results in the aeronauticalrevenue figure for Adelaide Airport being overstated relative to the other airports.Adelaide AirportBrisbane AirportMelbourne AirportPerth AirportSydney Airport$8.00$12.00$16.003.00 4.00 5.00Satisfactory GoodHIGHERPRICELOWERPRICELOWER QUALITY HIGHER QUALITY
  • 78. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports532 Potential aeronautical capacityissues at airportsKey points• Notwithstanding the subdued growth in passenger throughput at a number of monitoredairports during 2011-12, passenger throughput has grown significantly in recent years, andis expected to continue to grow over the next two decades.• Despite investment in aeronautical capacity in the last 11 years, there is evidence ofcongestion emerging at a number of the monitored airports, particularly during peakperiods.• Forecast growth in passenger throughput over the next two decades could place existingaeronautical infrastructure under increasing pressure.• In the short-term, airports can use price rationing or quantity rationing to allocate scarcecapacity and manage congestion more efficiently. However, in the long-term, the airportswill be required to expand aeronautical capacity to accommodate future growth and to meetthe reasonable expectations of users of airport infrastructure.• The potential to benefit from scarcity rents provides airports with incentives to inefficientlywithhold investment in aeronautical capacity in order to restrict the level of servicessupplied and continue to charge prices above costs for a sustained period.• While efficient price rationing was envisaged in the government’s aeronautical pricingprinciples, a number of monitored airports have instead implemented slot managementschemes to manage scarce capacity. Under these schemes, slots are allocated, usually onthe basis of existing landing rights, rather than priced so that the airport does not receivescarcity rents from existing slots when capacity is constrained. This reduces incentives forthe airport to inefficiently withhold investment in aeronautical capacity.• To ensure continued investment in airport infrastructure, the Australian Government haslegislated planning processes in place, so that airports can indicate the areas whereinvestments will be undertaken.• The monitored airports are planning investment to increase aeronautical capacity. Themonitored airports will be undertaking significant capital expenditure over the next fewyears that will need to be funded.• There are various approaches that the airports can take to fund aeronautical investments.2.1 IntroductionWhile the monitored airports have undertaken significant investments in aeronautical assets inrecent years, they have also experienced significant growth in passenger throughput andaircraft movements. Evidence suggests that congestion is emerging at a number of themonitored airports, particularly during peak periods. Without an expansion of capacity,congestion will become more pronounced over the next two decades as both passengerthroughput and aircraft movements are forecast to continue to grow. If congestion issues arenot addressed, there will be direct impacts on users of the airports, as well as an indirectimpact on the economy more broadly.
  • 79. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1254In the short-term, airports can deal with congestion by managing scarce airport slots moreefficiently. However, in the long-term, it will be necessary for airports to expand aeronauticalcapacity in order to accommodate forecast growth. Airports can lack incentives to expandcapacity as there is a low risk that users can respond to high prices by switching to analternative supplier of aeronautical services. This is because airports do not operate in acompetitive environment. Airports may have even less incentive to invest in aeronauticalcapacity if they can increase profits from simply rationing existing scarce capacity.However, in practice not all approaches for managing scarce capacity result in increased profitsfor an airport. For example, in Australia a number of the monitored airports have implementedslot management schemes where airport slots are allocated to airlines rather than priced orauctioned by the airport. In these situations, an airport does not benefit from failing to increasecapacity as the airport is dealing with capacity constraints by rationing quantity rather thanincreasing prices. Slot management schemes therefore reduce incentives for an airport toinefficiently withhold investment in additional capacity. In essence, an airport with slotmanagement schemes can only increase revenues by expanding capacity.To ensure that airports continue to invest in airport infrastructure, the Australian Governmentrequires federally-leased airports to adhere to a legislated planning framework. The planningframework involves 20-year forward-looking master plans, which are required to be updatedevery five years and identify development objectives and future aviation requirements. Theairports are also required to prepare major development plans for significant investments. Boththe master planning and major development planning processes require the airports to consultand engage with the broader community throughout the process. These plans must also beapproved by the Minister for Infrastructure and Transport before they can be implemented.Expanding aeronautical capacity will generally involve substantial capital expenditure. As aresult, airports will also need to consider the various funding options available to finance theseinvestments. Ownership structures and the potential for competition may influence theapproaches taken by airports to funding new investment and the level of risk sharing withusers.2.2 Recent growth in passenger throughput andaeronautical investmentAustralia’s major airports are a significant component of the national transport infrastructure,facilitating the movement of people and the supply of goods and services. As a result, themajor airports make a considerable contribution to Australia’s overall economic prosperity.Notably, the direct contribution of the air and space transport sector to the Australian economyin the year ending 30 June 2012 was approximately $7.1 billion, or approximately 0.5 per centof Australia’s Gross Domestic Product.34Airports also enhance links within and between businesses and improve access to resourcesand to international capital markets.35Australia’s airports are also an essential component ofthe Australian tourism industry, with international visitors almost exclusively passing through anAustralian airport to visit the country.The monitored airports have experienced significant growth in passenger numbers in recentyears. This growth is beginning to place increasing pressure on aeronautical infrastructure.Considerable investment in aeronautical infrastructure has already taken place. However,further investment will be required by the monitored airports over the next few years to ensurethat aeronautical capacity is sufficient to accommodate the needs of users.34ABS, Australian National Accounts, National Income, Expenditure and Product (ABS cat. no. 5206.0, June 2012,Table 45).35International Air Transport Association, Aviation economic benefits, IATA Economics briefing no. 08, January 2006.
  • 80. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports552.2.1 Recent passenger growthTotal passenger throughput at the five monitored airports has increased by 71.1 per cent since2001-02, with passenger numbers increasing from 62.1 million in 2001-02 to 106.3 million in2011-12. This represents an average annual increase in passenger throughput of 5.5 per centper annum. Despite the global economic slowdown since 2008-09, the airports have hadcontinual growth in passenger numbers, with an annualised growth in passenger numbers of4.5 per cent between 2008-09 and 2011-12.Growth in passenger throughput during 2011-12 was driven by strong passenger growth atBrisbane and Perth airports. However, domestic passenger numbers decreased at Adelaide,Melbourne and Sydney airports where the cessation of services by Tiger Airways affecteddomestic travel. Other industrial relations disruptions faced by some airlines also impacted onpassenger numbers passing through these airports. On the other hand, international travelrecorded solid growth at all airports. The strong Australian dollar favoured outboundinternational travel while the emergence of low-fare carriers in Asia has boosted inboundinternational travel.Growth in aircraft movements is another indicator of how intensively airport services are beingutilised. Total aircraft movements at the five monitored airports has increased by 30.7 per centsince 2001-02, from 733 694 movements in 2001-02 to 958 863 movements in 2011-12. Thisrepresents an average annual increase in aircraft movements of 2.7 per cent per annum.2.2.2 Aeronautical investmentAeronautical investment since 2001-02Since 2001-02, the five monitored airports have invested a total of $3.9 billion in additions toaeronautical assets.36The monitored airports’ collective tangible aeronautical asset basesincreased from $2.8 billion in 2001-02 to $5.8 billion in 2011-12. A number of the majoraeronautical investments completed by the monitored airports since 2001-02 are outlinedbelow.• Adelaide Airport has invested $328.2 million in aeronautical assets. This included theexpansion of its main passenger terminal in 2005, which incorporated all international,domestic and regional services. Adelaide Airport opened its multi-user terminal in October2005, with Qantas transferring its domestic terminal operation to the new terminal inFebruary 2006.• Brisbane Airport has invested $1.0 billion in aeronautical assets. This includes a $320million expansion of its international terminal completed in 2008, which expanded the sizeof the terminal by around 60 per cent.37Brisbane Airport also completed an expansion of itsDomestic Common User Satellite in March 2011, which increased the number ofpassenger gate holding lounges from four to nine and added two additional aircraft parkingbays.• Melbourne Airport has invested $885.0 million in aeronautical assets. This has included afive-year, $330 million expansion of the international terminal, which provided additional36Nominal value of additions (that is, not taking into account the effects of inflation) between 2001-02 and 2011-12.37Brisbane Airport Corporation, Major Projects, viewed on 7 January 2013 at; http://www.bne.com.au/corporate/major-projects and; Brisbane Airport Corporation, Submission to the Productivity Commission’s Inquiry into EconomicRegulation of Airport Services, April 2011, pp. i-ii.
  • 81. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1256aircraft parking locations, an expansion of departures gates and improvements to outboundpassenger processing and passenger lounge facilities.38• Perth Airport has invested $336.4 million in aeronautical assets as part of a broaderexpansion plan. Many of these projects have been or will be completed in the next twoyears.• Sydney Airport has invested $1.4 billion in aeronautical assets. Some of the majorinvestments at Sydney Airport have included; upgrades to terminal 1, expansions toaccommodate the Airbus A380 and security upgrades for baggage screening.39Aeronautical investment during 2011-12In 2011-12, the five monitored airports have completed and undertaken a number ofaeronautical investment projects and invested a total of $547.4 million in aeronautical assets. Anumber of the aeronautical investments undertaken by the monitored airports in 2011-12 areoutlined below. The individual airport chapters set out a full list of aeronautical investmentscompleted by the monitored airports during 2011-12.• Adelaide Airport invested $59.9 million in aeronautical assets during 2011-12. Thisinvestment included its landside infrastructure project and an upgrade to Adelaide Airport’sbaggage handling system, which included new automatic baggage readers that integratewith Qantas’ next-generation check-in facilities.• Brisbane Airport invested $155.9 million in aeronautical assets during 2011-12. Thisinvestment included upgrading the Domestic Common User Satellite, which providedadditional gate lounges, aircraft parking bays and food and beverage facilities. Anundercover elevated walkway between the domestic terminal car park and the terminal wasalso completed. During 2011-12, Brisbane Airport commenced construction of additionalaircraft bays in both the international and domestic northern apron, as well as in thedomestic southern apron.• Melbourne Airport invested $155.8 million in aeronautical assets during 2011-12.Melbourne Airport completed a number of upgrades to terminal 2 departures and arrivalsareas, as well as completing its runway overlay project. During 2011-12, Melbourne Airportcontinued its expansion of customs search and interview rooms in terminal 2 as well ascommencing a refurbishment of terminal 3.• Perth Airport invested $75.6 million in aeronautical assets during 2011-12. Perth Airportcompleted phase one of its terminal 3 expansion and an apron reconfiguration, as well as anumber of refurbishments and expansions in terminal 1. During 2011-12, Perth Airportcontinued the construction of its new domestic terminal and improvements to its taxiways.The new domestic terminal was opened in March 2013.• Sydney Airport invested $100.2 million in aeronautical assets during 2011-12. Thisinvestment included additional A380 gates, expansion and upgrades of aircraft parkingbays, runway works and a number of improvements to terminal 1, such as an expansion ofgate lounges and screening enhancements. Sydney Airport commenced an expansion ofits terminal 2 Pier A in May 2012, which will provide additional gates, aerobridges and gatelounges. During 2011-12, Sydney Airport has also commenced a number of airfield safety38Melbourne Airport, Terminal 2 expansion, viewed on 8 January 2013 at; http://melbourneairport.com.au/About-Melbourne-Airport/Current-projects/Terminal-2-expansion.html.39Sydney Airport Corporation Limited, Economic regulation of airport services submission to the ProductivityCommission inquiry, 8 April 2011, p. 32.
  • 82. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports57improvements, as well as stage 2 of its terminal 1 Pier C departures improvements, whichwill provide an expansion and improvement of gate lounges.2.3 Congestion is emerging at a number ofmonitored airportsMeasuring capacity at airports is inherently difficult. The number of aircraft that an airport canservice at any given time can depend on a number of factors, including number and quality ofrunways, taxiways and aircraft parking bays, air traffic and flow management systems, staffinglevels, weather conditions and aircraft mix.Similarly, congestion at airports can be caused by many factors. Congestion occurs at anairport when throughput is approaching aeronautical capacity limits—such that the use of theairport by one party imposes costs on other users, in terms of delays. Congestion can be theresult of problems in the air and/or on the ground. Any airport is typically a part of a network ofother airports. Delays at one airport can have knock-on effects on departures and arrivals atother airports. In brief, attributing causation of congestion to any one factor at any given airportcan be fraught with difficulty.Data published by the Bureau of Infrastructure, Transport and Regional Economics (BITRE)indicates increasing incidence of delayed aircraft movements across the network of monitoredairports. Chart 2.3.1 shows that between November 2003 and January 2013, there has been anoticeable downward trend in the proportion of on-time domestic arrivals and departures.40Over the same period, the number of flights has shown a marked upward trend, indicating thatthere are a greater number of aircraft attempting to utilise scarce airport capacity across thenetwork.In the short term on-time performance can be adversely affected by extreme weather eventsand industrial disputes (see, for example, data for mid 2007 and mid 2008 in chart 2.3.1).These factors however are less relevant to explaining the medium to long-term trends evidentin chart 2.3.1. While these data are not direct evidence of capacity constraints, emergingnetwork-wide congestion may be one of the factors contributing to the decline in on-timeperformances at the monitored airports.40Bureau of Infrastructure, Transport and Regional Economics, Domestic airline on time performance, November 2003to January 2013. See http://www.bitre.gov.au/publications/ongoing/airline_on_time_monthly.aspx; viewed 9 April 2013.
  • 83. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1258Chart 2.3.1: Average proportion of on-time domestic arrivals and departures andnumber of flight arrivals and departures at monitored airports—November 2003 to January 2013Source: Bureau of Infrastructure, Transport and Regional Economics, Domestic airline on time performance,November 2003 and January 2013. Seehttp://www.bitre.gov.au/publications/ongoing/airline_on_time_monthly.aspx; viewed 9 April 2013.Other evidence available to the ACCC through its airport monitoring program also indicatesemergence of possible capacity constraints:• Melbourne Airport noted that investment to expand runway capacity will be required beforethe end of the decade in order to meet the growing demand for access to the airport.41Thatsaid, in 2011-12, airlines did not raise any concerns with the current availability of runways,although some airlines commented that check-in services and facilities in the internationaland domestic terminal are congested during peak periods.• Brisbane Airport has stated that it expects the growth in air travel to exceed the capacity ofits current runway system between 2013 and 2015. Brisbane Airport’s current runwaysystem comprises two runways that are not allowed to operate simultaneously at night dueto safety concerns. Media articles have noted that the unavailability of the second runwayafter dark has been a cause for delays at Brisbane Airport.42In 2011-12, airlines rated theavailability of Brisbane Airport’s runways as poor, with airlines referring to significant delaysduring peak periods.• Perth Airport has claimed that it faces challenges meeting demand during peak periods:according to CEO Brad Geatches, the current runway system cannot meet demand during41Melbourne Airport, Melbourne Airport announces third runway preference, Media Release, 20 November 2012,viewed on 7 January 2013 at; http://melbourneairport.com.au/News-Events/Listing/Overview/melbourne-airport-announces-third-runway-preference.html.42Robyn Ironside, Seatbelts on, your flight is on time again, Courier Mail Brisbane, 31 August 2012 and; AndrewMacDonald, Air schedules in chaos because Brisbane Airport’s two runways can’t operate at same time at night,Courier Mail Brisbane, 5 July 2012.10,00012,00014,00016,00018,00020,00022,00024,00026,00055%60%65%70%75%80%85%90%95%100%NumberofFlightsPercentageOnTime% Departures"On-Time" % Arrivals"On-Time" Flight Departures Flight Arrivals Linear Trend "On-Time" Arrivals Linear Trend Number of Flight ArrivalsOn-time arrivals trendNumberof flightarrivals trend
  • 84. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports59the mid-week morning periods when fly-in/fly-out services have to depart.43In 2011-12,airlines rated the availability of Perth Airport’s runways as poor, noting that congestionleads to carriers facing delays with inbound and outbound flights, particularly during peakmorning periods.• In respect of Sydney Airport, the Joint Study on aviation capacity in the Sydney region (theJoint Study) report to the Australian and NSW governments concluded that immediateaction is needed to increase Sydney Airport’s capacity to meet growing demand. The reportconcluded that from around 2030, an additional airport will be needed to supplement thecapacity of Sydney Airport.44Commonwealth Bank infrastructure analysts have indicatedthat Sydney Airport’s capacity may be constrained soon after 2025, which will require newinfrastructure in order to handle further growth in volumes.45On the other hand, accordingto Sydney Airport a second airport will not be required in Sydney until 2045.46In 2011-12,airlines rated the availability of Sydney Airport’s runways as poor, with airlines notingcongestion for both international and domestic flights and recognising that this is partly dueto Sydney Airport’s legislated 80 aircraft movement per hour cap.2.4 Passenger throughput is forecast to continue togrow over the next two decadesForecasts of continued growth in passenger throughput and aircraft movements at themonitored airports suggest that existing aeronautical infrastructure will continue to experiencecapacity constraints.The BITRE has projected that by 2031, total passenger throughput at the five monitoredairports will more than double. Passenger numbers are expected to increase by 103.8 per centfrom 106.3 million passengers in 2011-12 to 216.7 million passengers in 2030-31.47As noted, growth in aircraft movements is another measure that can provide an indication ofhow intensively airport services are being utilised. BITRE has projected that by 2030, totalaircraft movements at the five monitored airports will increase by 55.5 per cent from 958 863movements in 2011-12 to just under 1.5 million movements in 2029-30. This represents anincrease in aircraft movements of 2.5 per cent per annum, which is slightly lower than the2.7 per cent annual growth rate between 2001-02 and 2011-12.48As passenger throughput and aircraft movements continue to grow over the next 20 years, themonitored airports will need to develop plans for accommodating this growth, as the effects ofcapacity constraints are likely to become more pronounced as volumes continue to grow.43Brad Geatches, Perth Airport challenges, West Australian Perth, 15 October 2012.44Steering Committee, Joint Study on aviation capacity in the Sydney region, March 2012, p. 4.45A. Fromyhr & M. Crowe, Global Markets Research: Equities: Sydney Airport, Commonwealth Bank, 7 January 2013.46Sydney Airport, Sydney Airport Capacity – The Facts, Fact Sheet, May 2012, viewed on 8 January 2013 at;http://www.sydneyairport.com.au/investors/~/media/files/corporate/about%20us/fact%20sheets/fact_sheet_sydney_airport_capacity_the_facts.pdf.47This represents an average annual increase in passenger throughput of 3.8 per cent per annum, which is lower thanthe annualised growth in passengers between 2001-02 and 2011-12 (5.5 per cent). BITRE notes that this is due toslower than expected economic growth in Australia, the maturation of the influence of low-cost carriers on domesticpassenger growth, as well as an assumption that there will be real increases in domestic airfares and relative prices ofdomestic and overseas travel and accommodation. See Bureau of Infrastructure, Transport and Regional Economics,Research Report 133: Air passenger movements through capital and non-capital city airports to 2030-31, November2012.48Bureau of Infrastructure, Transport and Regional Economics, Research Report 117: Aircraft movements throughcapital city airports to 2029-30, April 2010.
  • 85. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-12602.5 Inadequate investment and effects of ongoingcongestionIn the long-term, if the major airports are unable to address capacity constraints, this may forma barrier to future growth in aviation. A sustained period of constrained capacity at the majorairports could potentially hinder the forecast growth in volumes over the next two decades, asthere will be inadequate aeronautical capacity to accommodate additional demand. Persistentcapacity constraints will also negatively affect passengers through more frequent delays andhigher costs of flying.Some airlines may also be negatively affected, as capacity constraints will limit the ability ofairlines to increase or alter services, as well as causing delays. Persistent capacity constraintscould lead to aircraft being placed in holding patterns more often, which will impact airlinesthrough the additional resources required, such as fuel and the opportunity cost of time, aircraftand crews. Capacity constraints may also deter new entry into the market from other airlines,as no new airport slots will be available once existing airport slots are fully allocated. In asituation where airport slots are fully allocated, existing airport slots may be priced at apremium due to their relative scarcity.Capacity constraints would also impact downstream markets and the economy more broadly.As airports provide the predominant means of access to Australia for overseas passengers,passenger growth that cannot be accommodated will have a significant impact on theAustralian economy. For example, the Joint Study estimated that if Sydney’s future aviationdemand cannot be met, then by 2060, the impacts across the Australian economy could total$59.5 billion49in foregone expenditure. These impacts would be more pronounced if thepotential impacts of capacity constraints at the other major Australian airports were alsoincluded. Persistent capacity constraints will also result in foregone jobs across Australia,including direct employment from the airports and flow-on employment from the activities of theairports.Airports with market power would be expected to typically set the quantity of aeronauticalservices provided and prices at their individual profit-maximising levels. For an airport withmarket power, this would mean a higher price and a smaller quantity of aeronautical servicesthan would be the case in a competitive market. In addition, as noted, the activities of airportsalso affect downstream markets and the economy more broadly. However, when setting profit-maximising outcomes, firms do not consider external benefits from their services. In the case ofairports, consideration is not given to the external benefits of aeronautical services whensetting profit-maximising outcomes—as these benefits are not internalised by the airport.502.6 Approaches for dealing with congestion in theshort-term and long-termWhen addressing congestion issues an airport has broadly two alternatives. An airport caneither ration demand through prices or quantity allocation, or the airport can invest inaeronautical assets to expand capacity and relieve congestion. The choice between these twooptions will be driven by the relative cost of each option, with the airport needing to decide49This is expressed in 2010 dollars.50This is an example of a positive externality, where the optimal social quantity of aeronautical services is higher thanthe optimal private quantity of aeronautical services provided by the airport. In this situation, the airports would providea level of aeronautical capacity that is below the optimal social level, that is, the level of aeronautical capacity thatwould fully realise the external benefits by accommodating all passengers that wish to use the airports.
  • 86. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports61whether it is preferable to expand capacity rather than to displace some traffic load, or viceversa.51In the short-term, airports can allocate scarce capacity in order to manage congestion moreefficiently, such as through prices or quantity rationing. However, in the long-term, airports willbe required to expand aeronautical capacity if they are to accommodate future growth.Dealing with congestion in the short-term by managing scarce airport slotsIn the short-term, there are a number of approaches that airports can take to manage scarceaeronautical capacity. One option is quantity rationing, such as through a slot managementscheme. Another option is price rationing, such as through peak period pricing or congestionpricing.All commercial and private aircraft require a time slot to land or take-off at an airport. Slotmanagement schemes have been in place at Sydney Airport since March 1998 and at BrisbaneAirport since October 2012. Perth Airport has noted that it plans to have implemented a slotmanagement scheme from the end of March 2013. These schemes are designed with theintention of ensuring that scarce slots can be managed in a non-discriminatory and efficientway.52Without a slot management scheme at a capacity-constrained airport, congestion wouldincrease and impose costs on airlines (such as through more frequent use of holding patterns),passengers (such as through delays in arrival and departure) and airports (such as through theinefficient use of infrastructure).Sydney Airport’s slot management scheme is legislatively enforced and provides a cap of80 aircraft movements per hour. Brisbane Airport has voluntarily introduced a slot managementscheme that provides a cap of 50 aircraft movements per hour. Brisbane Airport’s slotmanagement scheme is based on the International Air Transport Association’s (IATA)Worldwide Slot Guidelines53for level 3 airports and tailored to the specific requirements ofBrisbane Airport.54Perth Airport’s recently introduced slot management scheme was alsovoluntary, with the intention to more closely balance demand and capacity throughout the day.Perth Airport’s slot management scheme will also based on IATA’s Worldwide Slot Guidelines,and will be tailored to account for the fly-in, fly-out resource sector charter flights and routesregulated by the Western Australia State Government.55All three of these slot managementschemes are administered by Airport Coordination Australia, although the Department ofInfrastructure and Transport also oversees the administration of the slot management schemeat Sydney Airport.In a situation where airport slots are allocated rather than priced—as is the case with the slotmanagement schemes implemented at Sydney and Brisbane airports—there is a redistributionof wealth from passengers to airlines, as airlines ration scarce aircraft seats during peakperiods by increasing prices above costs. Further, an allocated slot management scheme,without a secondary slot trading market, can create incentives for wasteful rent-seekingbehaviour, with airlines incurring additional transaction costs in trying to obtain premium airportslots.56A further issue with an allocated slot management scheme is that airlines that51Network Economics Consulting Group, Productivity Commission’s draft report on price regulation of airport services:Comments on land valuation and congestion issues, September 2001, p. 27.52Department of Infrastructure and Transport, Slot management at Sydney Airport, viewed on 10 January 2013 at;http://www.infrastructure.gov.au/aviation/airport/planning/apr_slots.aspx53International Air Transport Association, Worldwide Slot Guidelines 4thEdition, January 2013.54Brisbane Airport, Information Sheet: About the Runway Demand Management Scheme for Brisbane Airport, August2012, viewed on 10 January 2013 at;http://www.bne.com.au/sites/all/files/content/files/BAC_RDMS_FactSheet_March13%20(2).pdf.55Perth Airport, Schedule Coordination set to improve throughput at Perth Airport, Media Release, 5 December 2012,viewed on 9 January 2013 at; http://www.perthairport.com.au/aboutus/mediacentre/mediareleases/12-12-05/SCHEDULE_COORDINATION_SET_TO_IMPROVE_THROUGHPUT_AT_PERTH_AIRPORT.aspx.56Productivity Commission 2002, Price regulation of airport services, report no. 19, AusInfo Canberra, p. 436.
  • 87. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1262inefficiently use premium airport slots may not have incentives to reallocate these slots whenthe cost of holding onto the slot is low relative to the value of the slot to potential competitors,which can prevent new entrants from entering the market.57Airports can also implement peak period pricing as a way of managing scarce aeronauticalcapacity. Peak period pricing is where airports charge higher slot prices during capacityconstrained periods. This approach may accompany a reduction in slot prices during off-peakperiods, so as to provide incentives for some airlines to fly during off-peak periods and rationdemand to those users with the highest valuations of accessing slots during peak periods. Intheory, a restructure of prices where slot prices increase in peak periods and decrease inoff-peak periods can be revenue neutral if off-peak charges fall towards short-run marginalcost.58The Australian Government’s aeronautical pricing principles provide guidance to theairports on pricing practices and note that peak period pricing is allowed where necessary toefficiently manage demand and promote efficient investment in, and use of, airportinfrastructure.59The use of quantity rationing based on grand-fathered landing rights may havethe effect of restricting entry of new airlines.Perth Airport has noted that in the short-term, it intends to increase charges for aircraft usingairport slots during peak periods, so as to encourage airlines to instead use airport slots inshoulder-periods.60It is not yet clear if this will be accompanied by a reduction in off-peakcharges.Congestion pricing is similar to peak period pricing in that airports charge higher slot pricesduring capacity constrained periods. Unlike peak period pricing, which may be part of arestructure of charges encompassing lower charges for off-peak periods, congestion pricing istypically an additional levy that is intended to have the effect of rationing excess demand.Improving the efficiency of capacity utilisation can also potentially reduce future capacityrequirements.61Congestion pricing provides a redistribution of wealth from airlines andpassengers to airports as they can ration scarce airport capacity by increasing prices abovecosts.62Regardless of whether the airport chooses to implement quantity rationing or price rationing,the most efficient quantity of airport slots provided and the price paid by passengers can be thesame in theory.63The difference between these approaches may be in whether airlines orairports gain from the redistribution of wealth. The airport would gain from the redistribution if itauctioned slots in a slot management scheme or if it implemented congestion pricing, whereasthe airlines would gain from the redistribution if slots are allocated and airlines can increaseprices to ration scarce aircraft seats. However, in practice, the resulting quantities and pricesfrom these approaches are unlikely to be the same. For example, differences may result due to57Ibid.58Ibid.59Australian Government: The Treasury, Productivity Commission Report – Review of Price Regulation of AirportServices, Media Release, 30 April 2007.60Peter Kerr, Miners to be slugged more for FIFO flights, West Australian, Perth, 3 October 2012.61Joseph I. Daniel (March 1995), Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model withStochastic Queues, Econometrica, 63 (2), p. 327-370.62Congestion pricing can be seen as a form of tax that is added onto a price to account for negative externalities andthus enhance efficiency. The rationale behind this form of taxation is that the consumer or firm causing the externalityshould pay a tax equal to the marginal damage the externality causes, so that they take account of the damage whendeciding how much to consume or produce. In this case, airlines are charged an additional congestion price to accessan airport slot during peak periods, so airlines with the highest willingness to pay will gain access. These additionalcosts will then be passed onto passengers, so that passengers that are unwilling to pay the peak price will shift toflights at other times, other transport modes or not travel at all. (Source: J. Hindricks & G. D. Myles, Intermediate PublicEconomics, 2006, Massachusetts Institute of Technology).63This outcome would likely occur in a situation where there is perfect information and no transaction costs oruncertainty. For more information about the allocation of scarce airport slots, see Appendix H of ProductivityCommission 2002, Price regulation of airport services, report no. 19, Canberra.
  • 88. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports63the effects of rules included in slot management schemes, such as providing dedicatedgrandfathered slots based on existing usage rather than selling slots through an auction.Box 2.6.1: Air traffic management improvements could increasecapacity in the short-termThe total number of aircraft movements that can be undertaken at an airport is not a decisionsolely made by the airport operator, as capacity is also impacted by the particular air trafficmanagement systems at the airport.There are a number of government agencies that are responsible for managing safety in theAustralian aviation industry; the Department of Infrastructure and Transport, AirservicesAustralia (Airservices), the Australian Transport Safety Bureau (ATSB), the Civil Aviation SafetyAuthority (CASA), the Australian Maritime Safety Authority (AMSA) and the Bureau ofMeteorology (BOM).64An airport’s maximum safe-handling capacity can be increased by improving the way that airtraffic flows are managed. For example, Airservices has implemented a new approach to airtraffic management throughout 2012 and 201365, known as Collaborative Decision Making(CDM), which involves the sharing of information and data between airlines, airports, groundhandlers and air traffic control, with the intention of improving the utilisation of availableairspace and airport capacity.66This has involved the introduction of a new application called‘Metron Traffic Flow’, which is aimed at achieving a balance between air traffic demand andavailable capacity, with ground delays being preferable to airborne delays.67In the long-term, congestion will need to be managed through investment inaeronautical assets to expand capacityIn the long-term, the relative cost of expanding aeronautical capacity is likely to be lower thancosts associated with displacing traffic load, so once existing capacity has been fully utilised inthe short-term, there will be scope for airports to expand aeronautical capacity in order toprovide additional airport slots for airlines and passengers. In addition to investing in newcapacity, some investment will also be required to replace ageing infrastructure to improve thequality of facilities and to allow for more efficient and productive use of existing facilities.It should be noted that investments in aeronautical assets are largely indivisible in that they canonly be undertaken economically in large increments. For example, a runway is indivisible inthat it cannot be built only for a few aircraft movements. The indivisibility and irreversibility ofaeronautical investments can affect the optimal timing of investment decisions—especiallyunder conditions of uncertainty. For example, a firm might consider the trade-off between theextra returns from ‘early commitment’ against the benefits of increased information gained bywaiting.68In particular, there is likely to be uncertainty around demand forecasts and whetheractual growth in volumes will justify an expansion in capacity.64The Department of Infrastructure and Transport, Australia’s state aviation safety program,https://www.infrastructure.gov.au/aviation/safety/ssp/index.aspx.65‘Metron Traffic Flow’ was implemented in March 2012 at Perth and Sydney airports, December 2012 at BrisbaneAirport and will be implemented during 2013 at Melbourne Airport.66Airservices Australia, Collaborative decision making,http://www.airservicesaustralia.com/projects/collaborative-decision-making-cdm67Airservices Australia 2012, Air traffic flow management user manual version 3.0.68R Pindyck, Irreversibility, uncertainty, and investment, Journal of Economic Literature, 29 (3), September 1991,pp. 1110-1148.
  • 89. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1264Airports can expand their aeronautical capacity through the construction or extension ofrunways, terminals, taxiways and aprons. Because these are significant investments, majorexpansions in airport infrastructure can lead to large variations in investment over time,reflecting the typically ‘lumpy’ nature of infrastructure investment. For airport infrastructure thatis already in place, investment might only be required for maintaining, upgrading or replacinginfrastructure.In some cases, public policy may place limits on airports’ investment plans and decisions. Forexample, Sydney Airport is bound by legislation to allow no more than 80 aircraft movementsper hour, so that once all available airport slots are fully utilised, Sydney Airport will not be ableto provide any additional services. Sydney Airport’s legislated slot management scheme alsoincludes a guarantee of access for regional NSW communities, with a number of permanentregional service slots. This constrains Sydney Airport’s potential to service larger aircraft andthus, reduces the amount of passengers that can be accommodated with its scarce airportslots.69Sydney Airport also operates under a legislated curfew, with the airport being closedbetween 11pm and 6am (a similar curfew is also in place at Adelaide Airport). In the short-term,Sydney Airport can manage demand for its scarce airport slots, but in the long-term, provisionof additional services is problematic unless the Australian Government were to allow additionalaircraft movements at Sydney Airport or if a new airport were to be built in the Sydney region.2.7 Airports’ incentives for aeronautical investmentFirms in competitive industries invest in existing and new capacity to ensure that they canadequately cater for current and future demand as failure to do so may mean loss of businessand market share. However, firms with market power face weak or no competitive pressuresand have few incentives to undertake efficient investment. In response to excess demand,firms with market power typically ration demand by charging higher prices without necessarilyinvesting in new capacity.Where capacity is fixed, as is the case at a capacity constrained airport in the short-term, anairport with market power can increase prices to the point where the quantity of aeronauticalservices demanded by users equates to the supply of aeronautical capacity. For a capacityconstrained airport, so long as capacity is fully utilised (and not distorted by rent-seekingbehaviour), any excessive returns gained from congestion pricing will reflect scarcity rents70,not monopoly rents.71Although scarcity rents do not create deadweight losses, there remainsthe potential for a redistribution of wealth from airlines (and possibly passengers) to airports.This occurs because airports set prices above costs in order to ration the limited aeronauticalcapacity available.A firm with market power is likely to have weak incentives to undertake efficient investment.Lack of competition may result in an airport under-investing in new technologies to improveproductivity and meet the needs of airport users. The potential to benefit from scarcity rentsprovides airports with incentives to inefficiently withhold investment in aeronautical capacity inorder to restrict the level of services supplied and continue to charge prices above costs for asustained period.That said, the evidence from airports in Australia suggests that investment has taken place. Ina number of major cities there is potential for some level of competition for the major airports in69Network Economics Consulting Group, Productivity Commission’s draft report on price regulation of airport services:Comments on land valuation and congestion issues, September 2001, p. 16.70At times of excess demand, some airlines would be prepared to pay a premium in order to gain unhindered access toairport facilities. The size of this premium will be dependent on how scarce the capacity is at an airport. That is, thelower the amount of capacity that is available relative to demand, the higher the premium. In this situation, theopportunity cost of a unit of capacity is driven predominantly by the values placed on the foregone usage by others,rather than just the costs associated with the airport infrastructure. The benefits gained by airport operators fromincreasing prices above costs at these times to ration capacity can be characterised as scarcity rents.71Productivity Commission 2002, Price regulation of airport services, report no. 19, Canberra, p. 146.
  • 90. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports65the long-term. For example, Gold Coast Airport and Avalon Airport may provide competitivepressures on Brisbane Airport and Melbourne Airport respectively. There is also continuingdebate, and political pressure,72regarding a second major airport in the Sydney region, whichcould provide competition with Sydney Airport. However, Sydney Airport has the ‘first right torefusal’ to build and operate any major airport within 100 kilometres of the Sydney CBD.73Although, efficient price rationing was envisaged in the government’s aeronautical pricingprinciples74, a number of monitored airports have instead implemented slot managementschemes to manage scarce capacity. Under these slot management schemes, landing andtake-off time slots are allocated to airlines, rather than priced or auctioned by the airport. Inaddition, an airport does not gain excessive returns as a result of these slot managementschemes as it is dealing with capacity constraints by rationing capacity directly rather thanthrough increased prices. An airport can gain additional returns if it expands capacity and isable to accommodate greater traffic volumes. One of the consequences of slots being allocatedrather than priced, is that there are reduced incentives for the airport to inefficiently withholdinvestment in additional capacity, as the airport can only increase revenues by making morecapacity available.2.8 Airports’ current investment plans in responseto emerging congestionAs noted, Australian monitored airports have undertaken significant investment in aeronauticalinfrastructure over the last 11 years. A key question for this and subsequent Airport MonitoringReports (AMRs), is how airports are addressing congestion that appears to be emerging at anumber of monitored airports.It is likely that airports will be required to undertake significant investment over the next twodecades if they are to accommodate the forecast growth in volumes. Large scale futureinvestments will involve the preparation of plans that outline how and when they will undertakethese investments. With the exception of Adelaide Airport, the monitored airports have planneda number of aeronautical investments beyond 2011-12, which may potentially address some ofthe current aeronautical capacity issues. The ACCC will, in future AMRs, observe progress bythe airports in undertaking planned aeronautical investment. This, in conjunction with quality ofservice results, may assist in understanding the extent to which airports are meeting thereasonable expectations of users.2.8.1 Aeronautical investment planned by the monitored airportsbeyond 2011-12As noted, most of the monitored airports have invested in aeronautical assets in recent years.The monitored airports also have plans to invest in aeronautical assets over the next few years,in order to expand aeronautical capacity. The individual airport chapters set out a full list ofaeronautical investments planned by the monitored airports beyond 2011-12.72See the Hon. Anthony Albanese, MP, Minister for Infrastructure and Transport, “Sydney Airport struggling to stay ontime”, press release 20 February 2013; athttp://www.minister.infrastructure.gov.au/aa/releases/2013/February/aa033_2013.aspx.73Sydney Airport, Sydney Airport Master Plan 2009, p. 31.74The aeronautical pricing principles were initially enunciated in the government’s response to the 2002 inquiry by theProductivity Commission (PC) into the economic regulation of airport services. These principles set out thegovernment’s expectations on the pricing of aeronautical services by major airports. Although the principles providebroad guidance on appropriate outcomes they have not been enacted in legislation. The aeronautical pricing principleswere revised in the government’s response to the PC 2006 review of price regulations of airport services and can befound athttp://ministers.treasury.gov.au/DisplayDocs.aspx?doc=pressreleases/2007/032.htm&pageID=003&min=phc&Year=&DocType=0.
  • 91. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1266• Brisbane Airport has completed the detailed design for the first construction phase of itsnew parallel runway and has commenced civil works. The airport expects construction tobe completed by 2020. The lengthy construction period is due to the need to dredge thesite and place around 13 million cubic metres of sand to form the platform for the runway,with settling of the site taking up to four years. Brisbane Airport is also planning to build anew southern terminal, which will initially service closed charter operations to mainlyregional destinations.• In November 2012, Melbourne Airport announced its preferred orientation for a thirdrunway, with its proposal to be outlined in its 2013 master plan.75Melbourne Airport notedthat a third runway will be required from around 2018-2022 to meet the growing demand foraccess to the airport. Beyond 2011-12, Melbourne Airport is also planning on completingapron works to provide additional aircraft parking, relocating its Ground Service Equipmentarea and commencing an expansion of its airside road between the existing freight apronarea and future freight areas to the south.• Perth Airport has planned a number of projects within the international terminal, includingan expansion and redesign of the international arrivals area and the departures customs,security screening and lounge areas. Perth Airport noted that it has also identified thatadditional works are required in terminal 3 to address issues such as congestion at keytouch points and airline performance requirements within the terminal. Perth Airport is alsoplanning to construct a new domestic pier to be located on the eastern end ofterminal 1 and has also noted in the media that it has commenced planning for a thirdrunway and is holding preliminary discussions with users.76• Sydney Airport is planning to construct additional aprons in the international precinct and toreconfigure several existing aprons. Sydney Airport will also reconfigure aprons in terminal2 and is investigating options for redeveloping other aprons across the airport. SydneyAirport noted that terminal 2 check-in and baggage handling capacity will be expandedthroughout the second half of 2012 and works on terminal 1 check-in capacity willcommence throughout 2012 and 2013. In December 2011, Sydney Airport announced itsintention to commence stakeholder consultation on a proposed reconfiguration of thecurrent domestic and international precincts to create two alliance-based precincts.772.8.2 Airports have legislated requirements to plan for aeronauticalinvestmentsTo ensure continued investment in airport infrastructure, the Australian Government requiresairports to prepare master plans and major development plans, so that airports can indicate theareas where investments will be undertaken. These plans also require public consultation, sothat users can express views to the airports and the Australian Government about whereinvestment should be targeted to meet their needs.75Melbourne Airport, Melbourne Airport announces third runway preference, Media Release, 20 November 2012,viewed on 7 January 2013 at; http://melbourneairport.com.au/News-Events/Listing/Overview/melbourne-airport-announces-third-runway-preference.html..76Examples include; Geoffrey Thomas, Airport had warning of chaos, West Australian, 12 October 2012 and; BradGeatches, Perth Airport challenges, 15 October 2012 and; Natalie Gerritsen, Perth unlocks keys to terminal, AustralianFinancial Review, 8 January 2013.77Sydney Airport, New vision to integrate international , domestic and regional services, 5 December 2011, viewed on9 January 2013 at; http://www.sydneyairport.com.au/corporate/media-centre/media-releases/media-release-detail.aspx?item=%7B19FE83DF-66A6-49CA-A219-72C3A4A4C7E0%7D&lst=%7BC313C142-0E4E-4269-A2FB-BDEB95B3BC9E%7D.
  • 92. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports67Master planning process at Australian airportsUnder the Airports Act 1996 (Airports Act), Australian airports are required to establish a20-year forward-looking master plan, which identifies, for example, development objectives andfuture aviation requirements. Master plans are updated by the airports every five years andhave to be approved by the Minister for Infrastructure and Transport (the Minister).The government, in its 2009 National Aviation Policy White Paper (the White Paper), statedthat improved planning for Australian airports was one of its policy goals. Improved planningwould facilitate better integration and coordination with off-airport planning and continuedinvestment in Australia’s airport infrastructure and land transport links.78Following the releaseof the White Paper, the government, through amendments to the Airports Act, increased therequirements for airports to consult and engage with the broader community throughout theplanning process.When deciding whether to approve or reject a master plan, the Minister must consider:• the extent to which the plan achieves the purposes of a master plan, such as establishingthe strategic direction for efficient and economic development at the airport over theplanning period• the extent to which carrying out the plan would meet present and future requirements ofusers of the airport• the effect that carrying out the plan would be likely to have on the use of land within theairport site and in areas surrounding the airport• the consultation undertaken in preparing the plan (including the outcome of theconsultations)• the views of the Civil Aviation Safety Authority and Airservices Australia, in so far as theyrelate to safety aspects and operational aspects of the plan.In respect of the master plans for the monitored airports, the ACCC has observed the following:• Adelaide Airport’s current master plan has applied since November 2009, with the nextdraft master plan to be submitted to the Minister for approval before November 2014.• Brisbane Airport’s current master plan has applied since September 2009, with the nextmaster plan to be submitted to the Minister for approval before September 2014.• Melbourne Airport’s current master plan has applied since 2008. A draft master plan wasdue to be released in March 2013 for public consultation. The master plan is likely toinclude proposals for projects such as Melbourne Airport’s third runway.• Perth Airport’s current master plan has applied since 2009, with the next draft master planto be submitted to the Minister for approval before 2014.• Sydney Airport’s current master plan has applied since June 2009. In June 2012, theMinister directed Sydney Airport to bring forward its next master plan by almost a year andto prepare it by July 2013. Sydney Airport raised concerns with this change, noting it wouldsignificantly curtail the consultation process.79As a result, Sydney Airport sought a review78Australian Government, National Aviation Policy White Paper, December 2009, p. 154.79Sydney Airport, Sydney Airport’s new Master Plan Timetable, 15 June 2012, viewed on 9 January 2013 at;http://www.sydneyairport.com.au/corporate/~/media/Files/Corporate/Media%20Centre/Media%20Releases/2012/120615%20Statement%20on%202014%20master%20plan.pdf
  • 93. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1268of the Minister’s decision, with the Administrative Appeals Tribunal hearing the case inDecember 2012.80Sydney Airport and the government reached an agreement in February2013 that Sydney Airport’s master plan will have a deadline of 2 December 2013.81Airports must also prepare major development plans for major projectsUnder the Airports Act, Australian airports are also required to prepare a major developmentplan for each major individual development at an airport, including aeronautical and non-aeronautical projects. Airports must undertake public consultation on draft major developmentplans before submitting the plan to the Minister for approval.A major development includes projects such as the construction or extension of runways orterminals and the construction or extension of taxiways, roads or railways, where theconstruction of these projects costs more than $20 million or significantly increases thecapacity of the airport to handle movements of passengers, freight or aircraft. A majordevelopment plan must also be prepared for projects that are likely to have a significantenvironmental or ecological impact, and for projects that are likely to have a significant impacton the local or regional community.When deciding whether to approve or reject a major development plan, the Minister mustconsider:• the extent to which the plan relates to the airport and is consistent with the airport leaseand the final master plan for the airport• the extent to which carrying out the plan would meet the future needs of users of the airport• the effect that carrying out the plan would be likely to have on the future operating capacityof the airport• the impact that carrying out the plan would be likely to have on the environment• the consultations undertaken in preparing the plan (including the outcome of theconsultations)• the views of the Civil Aviation Safety Authority and Airservices Australia, in so far as theyrelate to safety aspects and operational aspects of the plan• circumstances related to the impact of the development, if it increases the capacity of eithera residential dwelling, a community care facility, an educational facility or a hospital.The ACCC intends to track progress by airports in implementing investment plans. FutureAMRs will assess and report on the extent to which planned investments are taking place.2.9 Different approaches to funding aeronauticalinvestmentThe decision on how to fund an investment can impact on the investment’s viability. There arevarious approaches that airports can take to fund investments in aeronautical assets. The mainapproaches that the monitored airports can use for funding investments are through raising80Matt O’Sullivan, Sydney Airport appeals Albanese decision, Sydney Morning Herald, 11 December 2012.81Simon Benson & Patrick Lion, Airport on fast-track plan for expansion, Daily Telegraph, 6 February 2013.
  • 94. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports69debt or equity contributions, pre-funding, congestion pricing and ‘build, operate and transfer’arrangements. Airports use combinations of these approaches to fund aeronauticalinvestments.Airports can raise debt or equity contributions to fund investments—with aeronautical chargesincreasing only after the new infrastructure is operational. Australian airports compete to sourceinvestment funding from either debt or equity markets in Australia or abroad. Those whomanage the investment funds of their clients often have a range of options for investing inthose funds. The attractiveness of various investments will differ according to assumptionsaround the future revenues and costs associated with particular assets. The AustralianGovernment also offers all federally-leased airports the protection of a Tripartite Deed, whichprovides airports greater certainty in securing financing for infrastructure developments. ATripartite Deed outlines the rights of financiers in the event that an operator of afederally-leased airport goes out of business or loses its operating licence.82In 2011, thegovernment announced that it would extend existing Tripartite Deeds by another 30 years.83Pre-funding of airport investments generally refers to financing prior to the construction of theinvestment or financing by increasing charges on users during the construction phase of theinvestment.84For the purposes of this discussion, pre-funding is used to describe the second option. InAustralia, for example, Brisbane Airport has announced an increase in aeronautical charges onusers during the construction of its new parallel runway, to partially fund the project. Airlineshave been in disagreement with Brisbane Airport’s intentions to partially pre-fund this project,as the new runway is not expected to be operational until at least 2020. Brisbane Airport hasstated that it needs revenue certainty to commit to an investment of this scale.85BrisbaneAirport noted that it intends to fund 25 per cent of its new runway through higher charges toairlines, with the remaining 75 per cent of funding coming through debt and equity.86The Australian Airports Association (AAA) noted that without pre-funding, current prices wouldbe held down while new facilities are constructed, perversely accelerating congestion. The AAAalso noted that this would result in substantial price increases once the new capacity iscommissioned, inefficiently restricting use of the more ample capacity once it is built.87Qantasraised concerns with pre-funding during the PC’s 2011 inquiry into the economic regulation ofairport services. For example, Qantas stated that pre-funding does not provide a guarantee ofaccess to infrastructure in the future, construction involves delays and interruptions which lowerquality of service and that pre-funding represents a cross-subsidy from current users to futureusers.88Congestion pricing, as discussed previously, involves airports charging airlines higher prices forairport slots during peak periods. The additional revenue that is raised from charging higherprices during peak periods could be used to fund future investment into expanding capacity.The PC noted in its 2011 inquiry into the economic regulation of airport services that there islikely to be little difference in pricing outcomes for airlines between pre-funding for new82Anthony Albanese, Securing Future Investment in Our Airports, Media Release, 24 May 2011, viewed on 9 January2013 at; http://anthonyalbanese.com.au/securing-future-investment-in-our-airports-2.83ibid.84Productivity Commission 2011, Economic Regulation of Airport Services, report no. 57, Canberra, p. 122.85Steve Creedy, Runway bill irks carriers, The Australian, 5 October 2012.86Andrew Cleary, ACCC seeks truce in airport dogfight, Australian Financial Review, 5 November 2012.87Australian Airports Association, Response to the Productivity Commission Inquiry into the Economic Regulation ofAirport Services, April 2011, p. 20.88Qantas Group, The Qantas Group Submission: Productivity Commission Inquiry into the Economic Regulation ofAirport Services, April 2011, pp. 34-37.
  • 95. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1270investment and congestion pricing for existing infrastructure, provided that the revenue fromcongestion pricing is used to alleviate capacity constraints through additional investment.89Another alternative, although relatively rare, is a ‘build, operate and transfer’ arrangement. Thisinvolves an enterprise undertaking the construction and operation of an airport facility, such asa terminal, for a predetermined number of years after which ownership is transferred to theairport.90With the exception of Adelaide Airport, the monitored airports have domestic terminalsthat are operated by airlines (Qantas and Virgin) under long-term domestic terminal leases,which were in place prior to the privatisation of the airports. These arrangements are similar to‘build, operate and transfer’ arrangements, although the airlines were not involved in theconstruction of these assets. The domestic terminal leases currently in place are due to expirein 2018-19.Factors that can influence airports’ choice of funding arrangementsAs noted, there are various approaches that airports can take to funding investments. Thechoices range from the airport completely self-funding an investment to having an investmentfully pre-funded by users. These choices carry inherently different risk profiles, with the fullypre-funded investment placing all risk onto current users of the airport, and the fully self-fundedinvestment placing all risk onto the owners of the airport. An airport will likely choose the formof funding arrangements based on the airport’s preferred level of risk tolerance.An airport’s willingness to bear risk may also be influenced by the ownership structure of theairport and the potential for competition for aeronautical services in the long-term.With the exception of Sydney Airport, the monitored airports are not publicly-listed companies.Rather, they are private companies, predominantly owned by Australian superannuation fundsthat invest through fund managers.91Superannuation funds tend to have a more conservativeor cautious approach to risk, with a primary investment goal of capital protection and apreference for stable and predictable returns. Airports have been an attractive investment forsuperannuation funds, as they provide a fairly stable growth and a moderate to high level ofpredictable income. The ownership structures of the monitored airports could influence theapproach taken when funding new investment, as they have incentives to ensure that riskremains conservative and returns are stable and predictable.The Department of Infrastructure and Transport regulates the ownership and control at themonitored airports, through the provisions of the Airports Act. The major restrictions onownership are a 49 per cent limit on foreign ownership, a 5 per cent limit on airline ownershipand a 15 per cent limit on cross-ownership (between Sydney and Perth airports, Sydney andBrisbane airports, Sydney and Melbourne airports).As noted in the Summary, and also observed in the 2009-10 and 2010-11 AMRs, the monitoredairports’ level of uncertainty about aeronautical revenue is lower than airlines because they arepartially insulated by airlines from shocks to demand. The ACCC also noted that the airportshave the incentives and ability to transfer risk to airlines.92The Board of Airline Representativesof Australia (BARA) has stated that Brisbane Airport is effectively shifting the risk of the capitalexpenditure related to the new parallel runway to airlines by charging higher prices prior to therunway being commissioned.9389Productivity Commission, Economic Regulation of Airport Services, Inquiry report no. 57, Canberra, December 2011,p. 122.90International Civil Aviation Organization, Airport Economics Manual, Doc. 9562, 2ndEdition, 2006, p. 7-14.91Productivity Commission, Economic Regulation of Airport Services, Inquiry report no. 57, Canberra, December 2011,appendix B.92For more information, see chapter 2 of the ACCC’s 2009-10 report and chapter 1 of the ACCC’s 2010-11 report.93Steve Creedy, Runway bill irks carriers, The Australian, 5 October 2012.
  • 96. Airport Monitoring Report 2011-12 Potential aeronautical capacity issues at airports71Competitive conditions may also impact the investment decision. The monitored airports do notface close competition with other airports, and therefore are not necessarily sensitive to thepossibility that users might switch to an alternative supplier of aeronautical services ifinvestment is inadequate and service quality is below standard. However, there are a numberof secondary airports that may provide competitive pressures on major city airports in thelong term, for example, Avalon Airport in Victoria and Gold Coast Airport in Queensland.Owners of airports who currently face little competition, but have potential for increasedcompetition in the future may, for example, favour pre-funding arrangements for significant newinvestment. In this instance, an airport may seek to increase prices during a period whencompetitive pressures are weak and earn a return on its investment before competitionincreases.2.10 The impact of regulatory access arrangementsCurrently, no airport service is subject to access regulation under the National Access Regime.However, the September 2012 High Court decision which included an interpretation of criterion(b) for declaration94under Part IIIA of the Competition and Consumer Act 2010 (CCA) in ThePilbara Infrastructure Pty Ltd & Anor v Australian Competition Tribunal & Ors case may haveimplications for monitored airports.95The PC is currently undertaking an inquiry into the National Access Regime. The PC willprovide an assessment of the performance of Part IIIA of the CCA in meeting its rationale andobjectives.96The ACCC has provided a submission to the PC review in which it argues that theinterpretation of criterion (b) in the recent High Court decision has the potential for adverseeffects in related industries.97Declaration criterion (b) asks whether it ‘would be uneconomical for anyone to develop anotherfacility to provide the service’. The majority of the High Court in The Pilbara Infrastructure PtyLtd & Anor v Australian Competition Tribunal & Ors case found that criterion (b) will only besatisfied if it would be unprofitable for anyone to develop another facility to provide the service.This is referred to as the privately profitable test. Prior to this decision, ‘uneconomical toduplicate’ was generally interpreted as a natural monopoly or a net social benefit test.98In the High Court decision, the majority also found ‘[n]o reason is shown to read ‘anyone’ incriterion (b) as limited in its application’. Rather, ‘anyone’ includes all ‘existing and possiblefuture market participants.’ Prior to this decision, ‘anyone’ was interpreted as anyone other thanthe incumbent owner of the facility to which access was sought.99In particular, in 2000, the Australian Competition Tribunal observed in Review of Declaration ofFreight Handling Services at Sydney International Airport, that under a privately profitable testthe interpretation of ‘uneconomical’ would be ‘closely connected to the question of whether‘anyone’ should include the owner of the facility providing the service to which access is94Declaration of an infrastructure service gives access seekers the right to negotiate access with an infrastructureservice provider—it does not provide an automatic right to use that service. Once an infrastructure service has beendeclared, a provider and access seeker negotiate the terms and conditions of access. Failing agreement, the ACCCcan arbitrate and make an access determination. Source: Productivity Commission, Issues Paper: National AccessRegime, November 2012.95High Court of Australia, The Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal [2012] HCA 36 (14September 2012).96Productivity Commission, Issues Paper: National Access Regime, November 2012.97See: http://www.pc.gov.au/__data/assets/pdf_file/0008/121967/sub016-access-regime.pdf.98Ibid.99Ibid.
  • 97. Potential aeronautical capacity issues at airports Airport Monitoring Report 2011-1272sought.’100The Tribunal was concerned that ‘economies of scope may allow an incumbent,seeking to deny access to a potential entrant, to develop another facility while raising aninsuperable barrier to entry to new players (a defining feature of a bottleneck).101Because the monitored airports have natural monopoly characteristics, this decision may haveimplications for the regulatory framework that potentially applies to them. The High Court’sinterpretation of criterion (b) for declaration under Part IIIA could alter future decisions onwhether aeronautical infrastructure will become declared services.102100Australian Competition Tribunal, Re: Review of Declaration of Freight Handling Services at Sydney InternationalAirport (2000) ATPR, 41-754 [205].101Ibid.102Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal [2011] FCAFC 58. [87] – the Court considered thatthe ‘granting of access to override the otherwise legitimate interests of incumbent owners [should be] a distinctlyexceptional occurrence’.
  • 98. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services733 Overview of airport car parking andlandside servicesKey pointsPrices for airport car parking• Adelaide Airport did not change car parking prices in 2011-12. This is the secondconsecutive year that Adelaide Airport has kept prices unchanged.• Brisbane Airport kept most prices in their car parks unchanged, apart from three short-termprice points that increased. Melbourne Airport, increased some car park price points forshort-term parking, but reduced a number of car park price points for longer term andbusiness parking.• Sydney Airport increased almost all car parking prices and Perth Airport increased most carparking prices.Revenues, costs and profits for airport car parking• All of the monitored airports, except Adelaide, increased car parking revenue in 2011-12,with the largest increase recorded at Perth Airport.• Operating expenses increased at varying rates across all monitored airports in 2011-12 forcar parking services. Brisbane Airport recorded the largest increase and Melbourne thelowest.• Operating margins were down at Adelaide, Brisbane and Melbourne airports. Perth andSydney recorded increases in operating margins.Availability and quality of airport car parking facilities• Four of the monitored airports increased the number of total car parking spaces during2011-12, while the number of spaces at Melbourne Airport slightly declined.− The largest increase occurred at Brisbane Airport following the opening of a newmulti-level car park servicing domestic travellers.• Brisbane, Melbourne and Perth airports received relatively high ratings in terms of theavailability of car parking. Sydney Airport was again rated as satisfactory while AdelaideAirport’s rating declined to be below satisfactory.Landside access charges and revenues• Brisbane, Perth and Sydney airports increased a small number of landside access chargesMelbourne and Adelaide airports left charges unchanged in 2011-12.• Airports generally earned higher revenues from taxi and private car operations in2011-12. Melbourne and Brisbane also earned substantial revenues through private busand off-airport car parking.− Revenues from private car operations increased significantly at Melbourne, Perthand Sydney airports in 2011-12.
  • 99. Overview of airport car parking and landside services Airport Monitoring Report 2011-12743.1 IntroductionThis chapter presents the results of the ACCC’s monitoring of prices, costs, profits and qualityof service relating to the supply of on-airport car parking services at Adelaide, Brisbane,Melbourne (Tullamarine), Perth and Sydney (Kingsford-Smith) airports.In addition to car parking services, this chapter also presents analysis of the airports’ landsideaccess charges and revenues such as those associated with access by taxis and buses to theairport surrounds.Landside access is included in this analysis as airports have the ability to impede competitionfrom alternatives to on-airport services through their control of access to airport land andthrough their charging rates.Chapter 1 discussed aeronautical services which are typically provided to airlines and/orpassengers in combination with airlines and border agencies. However, airport car parkingservices are provided directly by airports to passengers and other consumers.This chapter provides an overview on a number of aspects of airport car parking, including:• car parking configurations at each of the monitored airports (section 3.2)• airport car parking prices (section 3.3)• revenues, costs and profits associated with car parking services (section 3.4)• the availability and quality of car parking facilities (section 3.5)• landside access charges and revenues (section 3.6)• observations about the performance of the five monitored airports (section 3.7)• future growth, capacity and investment in airport car parking and landside services(section 3.8).Each of the individual airport chapters following this chapter present more detailed informationon the monitoring results for airport car parking and landside access. Appendix A.3 provides afull list of car parking charges and supply over the past eleven years for each monitored airport.3.2 Airport car parking configurationsAustralian airports generally provide a range of car parking services – some in close proximityto the terminals for convenience, while other parking facilities are some distance from theterminals. The configuration and range of car parking services varies considerably from airportto airport.Table 3.2.1 outlines the various car parking configurations offered by the monitored airports toconsumers.
  • 100. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services75Table 3.2.1: Airport car parking configurations at the monitored airportsAirport Car parking configurationsAdelaide Two car parks, both servicing international and domestic terminal users• Short term car park is located in front of the multi-user integrated terminal (withinwalking distance)• Long-term car park located at a distance from the multi-user terminal, serviced bya free shuttle bus• Adelaide Airport opened a new multi-level short-term car park on 6 August 2012(note that the analysis in this chapter does not include the operations of this newcar park)Brisbane International terminal• Combined short-term and long-termmulti-level car park located in front ofthe international terminal (withinwalking distance)Domestic terminal• A new combined short-term andlong-term car park located near thedomestic terminal (within walkingdistance)• Long-term car park located withinwalking distance of the domesticterminalMelbourne Five car parks servicing both international and domestic terminal users• Covered short-term car park located within walking distance of the terminalprecinct• Covered long-term multi-level car park located within walking distance of theterminal precinct• Uncovered long-term car park located at distance from the terminal precinct,serviced by a free shuttle bus• Business car park (offering daily rates) located within walking distance of theterminal precinct• Express car park (offering short-term and daily rates) located within walkingdistance of the terminal precinct
  • 101. Overview of airport car parking and landside services Airport Monitoring Report 2011-1276Perth International terminal• Short-term car park located oppositethe international terminal and withinwalking distance• Long-term car park located at twolocations. One is next to theinternational short term car park andis walking distance from the terminal.The other is at a distance from theinternational terminal and is servicedby a free shuttle bus every 10minutesDomestic terminal• Short-term car park located withinwalking distance of the two domesticterminals• Long-term car park located at fourseparate locations at a distance fromthe domestic terminal, serviced by afree shuttle bus• The airport offers ‘FASTtrack’business parking for domesticterminal users (located within theshort term car park and directly infront of both domestic terminals)• A separate car park for users of theregional terminal is also provided,with the first hour freeSydney International terminal• Combined short-term and long-termmulti-level car park opposite theinternational terminal and withinwalking distanceDomestic terminal• Combined short-term and long-termcar park located opposite thedomestic terminals and withinwalking distance• A long-term car park located atdistance from the domestic terminals,serviced by a free shuttle busIn addition to car parking services, some monitored airports also provide road access to theirterminals by way of free pick-up and drop-off facilities for passengers. These facilities includekerbside access, park and wait areas, or a combination of both.• Adelaide Airport offers free pick-up and drop-off facilities. However, post-30 June 2012, thepick-up and drop-off point has been moved from the entrance to terminal 1 to the groundlevel of its new car park. This new pick-up and drop-off point is a short distance from theentrance to terminal 1.103• Brisbane Airport offers free pick-up and drop-off facilities in front of its terminals.Post-30 June 2012, Brisbane Airport has opened a public park and wait area, whichprovides 30 minutes free waiting time before short-term parking rates apply.104• Melbourne Airport offers free pick-up and drop-off facilities in front of its terminals.Melbourne Airport opened a public park and wait area in December 2011, located within itslong-term car park. A $2 charge applies for parking between 20 and 40 minutes and a$4 charge applies for parking between 40 and 60 minutes. Normal long-term car parkingrates apply after one hour.105103Adelaide Airport, Multi-level Car Park FAQ, viewed on 7 February 2013 at; http://www.adelaideairport.com.au/air-travel/to-and-from/parking/multi-level-car-park-faq#k.104Brisbane Airport, Changes to Pick-Up Area, viewed on 7 February 2013 at; http://www.bne.com.au/pick-up.105Melbourne Airport, Ring & Ride waiting zone, viewed on 7 February 2013 at; http://melbourneairport.com.au/News-Events/Listing/Overview/ring-ride-waiting-zone-.html.
  • 102. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services77• Perth Airport offers free pick-up and drop-off facilities in front of its terminals, as well as15 minute free parking in its car parks. Perth Airport also offers a public park and wait area,where people can wait in their vehicle for up to 90 minutes. Entry to the car park requires agold coin donation, with all profits going to children’s charities.106• Sydney Airport provides free drop-off facilities in front of all its terminals. However, kerbsidepick-up is only available outside terminal 3. Sydney Airport offers a public park and waitarea within its international terminal car park, which provides 15 minutes free parking.Sydney Airport also offers a public park and wait area close to terminal 2, which provides10 minutes free parking, with normal rates applying after this time.1073.3 Airport car parking pricesNominal car parking rates charged by the monitored airports as at 30 June 2012 for selectedprice points (or length of car parking stay) are presented in table 3.3.1. Table 3.3.2 provides thepercentage change in those nominal car parking prices from the previous year.The data presented in the two tables provides an indication of the monitored airports’performance in relation to car parking services. However, there are caveats that need to beconsidered when assessing car parking prices and changes. In relation to car parking servicesfor instance, if an airport reduces the price of short term car parking for eight hours by10 per cent and increases the one hour charge by the same amount, it could be suggested thaton average prices have not changed. In practice, there may be considerably less demand foreight hour stays in short term car parks than for one hour parking. In this example, given therelative demand levels for the two parking periods, it could be said that consumers overallwould be paying higher prices for car parking.Table 3.3.1: Selected car parking prices as at 30 June 2012Short-term car parking Long-term car parkingAirport 1 hour 3 hours 8 hours 24 hours 1 day 7 daysAdelaide $4.00 $11.00 $26.00 $30.00 $25.00 $70.00Brisbane $14.00 $22.00 $50.00 $50.00 $40.00 $140.00Melbourne $12.00 $28.00 $55.00 $55.00 $29.00 $77.00Perth $6.00 $10.20 $15.20 $38.00 $17.00 $93.00Sydney $16.00 $29.00 $56.00 $56.00 $26.00 $127.00Notes: (1) To provide more reliable observations on changes in overall price levels, it would be useful to report onan index of prices that takes into account the demand for each price point in each of the airport’s car parkingfacilities. However, most of the airports have previously advised that the information is not available in theformat necessary to develop an index of prices. Therefore, care should be taken in interpreting the levels anddifferences in the airports’ car parking prices.(2) Brisbane Airport and Sydney Airport short-term car park charges for 24 hours are based on the domesticcar park at each airport.106Perth Airport, T3 and T4 Domestic Terminals Parking, viewed on 7 February 2013 at;http://www.perthairport.com.au/ToTheAirport/Parking/T3T4parking.aspx.107Sydney Airport, Dropping Off and Picking Up, viewed on 7 February 2013 at;http://www.sydneyairport.com.au/go/dropping-off-and-picking-up.
  • 103. Overview of airport car parking and landside services Airport Monitoring Report 2011-1278Table 3.3.2: Percentage change in car parking pricesfrom 30 June 2011 to 30 June 2012Short-term car parking Long-term car parkingAirport 1 hour 3 hours 8 hours 24 hours 1 day 7 daysAdelaide 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Brisbane ▲ 7.7% 0.0% ▲ 25.0% ▲ 25.0% 0.0% 0.0%Melbourne 0.0% 0.0% ▲ 5.8% ▲ 5.8% 0.0% 0.0%Perth ▲ 7.1% ▲ 2.0% ▲ 1.3% ▲ 5.6% ▲ 6.3% ▲ 5.7%Sydney ▲ 6.7% ▲ 11.5% ▲ 7.7% ▲ 7.7% ▲ 4.0% ▲ 4.1%Key observations from tables 3.3.1 and 3.3.2 include:Overall price changes• Adelaide Airport was the only monitored airport that did not change car parking prices in2011-12. This is the second consecutive year that Adelaide Airport has kept pricesunchanged.• Melbourne Airport increased some of its short-term car park price points in 2011-12,including prices for eight and 24 hours car parking, and reduced a number of price points inthe long-term uncovered car park and also in the northern business car park. BrisbaneAirport increased prices for one, eight and 24 hours car parking but generally left all otherprices unchanged.• Sydney Airport increased all car parking prices except for the first 30 minutes of car parkingat its international multi-level car park. Perth Airport increased most car parking prices in2011-12, except for price points for less than 30 minutes parking.Car parking price comparisons between airports• Adelaide Airport generally charged the lowest prices among monitored airports for the carparking price points displayed in table 3.3.1. Perth Airport had the lowest price for threehour stays at the short-term car park ($10.20 compared to Adelaide’s $11) and for one daystays at their long-term car parking ($17 compared to Adelaide’s $25).• Sydney Airport had the highest short-term car parking prices for the categories displayed intable 3.3.1. Brisbane Airport’s long-term prices displayed in the same table were thehighest among the monitored airports.Monitored airports• As noted, Adelaide Airport did not change car parking prices during 2011-12 and generallyhad the lowest overall prices for parking.
  • 104. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services79• Brisbane Airport had the largest price increases in the price points shown in table 3.3.1 withthe price of an eight-hour stay at the domestic short-term car park increasing by25 per cent to $50. The 24 hour rate at the same car park also increased by 25 per cent to$50.− Brisbane Airport’s domestic long-term car park price points recorded no increasesin 2011-12 for any category. The domestic short-term car park price points hadincreases for all categories that exceeded stays of four hours.− Brisbane Airport’s international car park price points remained unchanged for 2011-12.• Melbourne Airport, increased some car park price points for short-term parking, butreduced a number of car park price points for longer term and business parking.− Some of Melbourne Airport’s multi-level short and long term car park pricesincreased towards the end of 2011-12. The price for two hours parking increasedby $2 to $22 and the charge for stays between four and 24 hours increased by $3to $55. Prices for the southern business/express car park were unchanged during2011-12.− Most of Melbourne Airport’s long-term uncovered car park prices remainedunchanged for up to seven days parking. All price points exceeding seven dayshad reductions during 2011-12. These reductions for stays longer than eight daysranged from 10.4 per cent for 11 to 12 days and 21.3 per cent for 13 to 14 days.− Melbourne Airport’s northern business car park opposite terminal 1 decreased allprice points by 8.3 per cent during 2011-12. For example, stays of up to one daydecreased from $60 in 2010-11 to $55 in 2011-12.− Although not covered by this monitoring report, a number of prices increased atMelbourne Airport’s car parks after 30 June 2012. In July 2012, the structure ofpricing and actual pricing increased at all points for the northern business car park.Some price points increased at the multi-level short term and long term car parksand at the uncovered long term car park. Further details on these price rises canbe found in section 6.5.1.• Perth Airport generally increased prices for the majority of its car parking price pointsacross all car parks. As noted above, there were four price points where reductions orwaiving of the fee occurred.− Perth Airport’s international and domestic short term car parks price pointsgenerally increased within a range of 1.3 per cent to 7.1 per cent. The price pointfor additional days after two days decreased by 16.7 per cent and Perth Airportwaived the fee for the short stays up to 10 minutes (previously it was $4).− The international and domestic long term car parks price points all increased in2011-12, from a low of 1.9 per cent for two to three days to a high of 6.3 per centfor one day. Price points for the domestic FASTtrack and regional car parking alsoall increased during 2011-12.• Sydney Airport’s car parks implemented increases over most price points during 2011-12.− The international multi-level short term car park increased prices across all pricepoints except for the first 30 minutes of parking which remained unchanged. Pricepoint increases ranged from a low of 6.7 per cent for 31 to 60 minutes to a high of
  • 105. Overview of airport car parking and landside services Airport Monitoring Report 2011-128011.5 per cent for three hour stays. These same increases and unchanged pricesfor the first thirty minutes were exactly replicated in the domestic multi-level carpark.− The domestic long term multi level car park prices increased across all price pointsexcept for charges for additional days (after seven days of parking) which remainedunchanged.3.4 Airport car parking revenues, costs and profitsTable 3.4.1 presents total revenues, operating expenses and profits for car parking activities in2011-12 for all monitored airports. The table also presents the percentage change from2010-11 for each measure.Table 3.4.1: Airport car parking revenue, operating expenses and operating marginsfor 2011-12 and changes from 2010-11Airport Revenue($million)Change inrevenue(%)Operatingexpenses($million)Change inoperatingexpenses(%)Operatingmargin($million)Change inoperatingmargins(%)Adelaide 14.0 ▼ 4.9 4.5 ▲ 8.0 9.5 ▼ 10.0Brisbane 60.9 ▲ 1.4 23.1 ▲ 34.7 37.9 ▼ 11.8Melbourne 114.7 ▲ 0.05 28.3 ▲ 2.0 86.4 ▼ 0.6Perth 50.6 ▲ 23.2 16.4 ▲ 20.9 34.2 ▲ 24.3Sydney 100.4 ▲ 2.5 31.0 ▲ 7.5 69.4 ▲ 0.4Notes: (1) Trends in these indicators can provide some indication about the performance of the monitored airportsand, in some instances, might raise concerns about the performance of particular airports. However, theresults from monitoring alone are far from conclusive. Importantly, the indicators are based on regulatoryaccounts prepared under standard accounting practices and, therefore, it is difficult to interpret the results interms of whether or not prices are generating revenue consistent with the efficient long-run costs of providingthe services.(2) Revenues and operating expenses are not reported separately for public and staff car parking by most ofthe airports. To assist with comparability, the revenues, operating expenses and operating margins for carparking presented in table 3.4.1, 3.4.2 and chart 3.4.1 include data for both public and staff car parking.Key observations from table 3.4.1 include:• Total car parking revenue increased to $340.7 million in 2011-12, up 3.7 per cent from2010-11. Total car parking operating expenses for all airports increased to $103.3 million,up 12.9 per cent from 2010-11. Total car parking operating margin for all airports increasedslightly in 2011-12 to $237.4 million, up 0.1 per cent from 2011-12.• All monitored airports except Adelaide Airport increased car parking revenue in 2011-12.The largest increase in revenue occurred at Perth Airport, increasing by 23.2 per cent to$50.6 million. Among other monitored airports, Sydney Airport reported the second largestincrease in 2011-12 increasing 2.5 per cent to $100.4 million, while Adelaide Airportrecorded a drop of 4.9 per cent with revenues of $14.0 million.• Car parking operating expenses at all monitored airports increased in 2011-12, although atvaried rates. Brisbane Airport’s car parking operating expenses recorded the largestincrease of 34.7 per cent in 2011-12, increasing to $23.1 million. Perth Airport’s car parking
  • 106. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services81operating expenses increased by 20.9 per cent in 2011-12 to $16.4 million. MelbourneAirport had the lowest increase in car parking operating expenses with 2.0 per cent to$28.3 million.• Car parking operating margins were down at Adelaide (-10.0 per cent), Brisbane(-11.8 per cent) and Melbourne airports (-0.6 per cent) while Perth (24.3 per cent) andSydney (0.4 per cent) airports recorded increases in 2011-12.Key observations on monitored airports• Adelaide Airport continued to have the lowest revenue from car parking services amongmonitored airports in 2011-12 and as noted, was the only monitored airport in 2011-12 torecord a reduction in car parking revenue. With car parking revenue reducing and carparking operating expenses increasing by 8.0 per cent, the car parking operating margindecreased by 10.0 per cent to $9.5 million or around 13.8 per cent of its total airportoperating margin.• Brisbane Airport also recorded a decrease in its car parking operating margin of11.8 per cent in 2011-12 to $37.9 million. This is the largest decrease of the three airportsthat recorded reductions in car parking operating margin for 2011-12. As noted, BrisbaneAirport’s increase in car parking operating expenses for 2011-12 was the largest of anymonitored airport.• Melbourne Airport continued to record the largest revenue from car parking services with$114.7 million in 2011-12, but their growth of 0.05 per cent was the lowest of all monitoredairports. Melbourne Airport’s car parking operating margin decreased by 0.6 per cent to$86.4 million (24.4 per cent of its total airport operating margin). Melbourne Airport’s carparking operating margin continued to be the largest among monitored airports and toaccount for the largest share of the total operating margin among the monitored airports.• Perth Airport recorded the second lowest total car parking revenue among monitoredairports for 2011-12 with $50.6 million, representing an increase of 23.2 per cent over2010-11. This is the largest car parking revenue increase of any monitored airport in2011-12. Perth Airport’s car parking operating margin for 2011-12 was $34.2 million, up24.3 per cent from 2010-11 (5.9 per cent of its total airport operating margin). As with PerthAirport’s revenue growth, its car parking operating margin increase was the largest of themonitored airports for 2011-12.• Sydney Airport’s car parking revenue, operating expenses and operating margin allincreased in 2011-12. Its car parking operating margin increased by 0.4 per cent to$69.4 million, representing around 11.2 per cent of its total airport operating margin.Table 3.4.2 presents the airports’ car parking revenue, operating expenses and operatingmargins on a per car park space (or unit) basis for 2011-12. The table also presents thepercentage change from 2010-11.
  • 107. Overview of airport car parking and landside services Airport Monitoring Report 2011-1282Table 3.4.2: Airport car parking revenue, operating expenses and operating marginsper car parking space for 2011-12, and changes from 2010-11Airport Revenueper carpark space($)Change inrevenueper carpark space(%)Operatingexpensesper carpark space($)Change inoperatingexpensesper carpark space(%)Operatingmargin percar parkspace($)Change inoperatingmarginsper carpark space(%)Adelaide 4 673 ▼ 5.0 1 495 ▲ 8.0 3 179 ▼ 10.1Brisbane 4 738 ▼ 23.0 1 794 ▲ 2.3 2 944 ▼ 33.0Melbourne 5 231 ▲ 2.3 1 290 ▲ 4.2 3 942 ▲ 1.6Perth 3 239 ▲ 14.7 1 052 ▲ 12.5 2 187 ▲ 15.8Sydney 7 654 ▼ 4.1 2 365 ▲ 0.6 5 290 ▼ 6.1Key observations from table 3.4.2 include:• Revenue per car parking space increased for two of the five monitored airports. SydneyAirport’s revenue per car park space decreased by 4.1 per cent in 2011-12 to $7654 butwas still the largest of any monitored airport. Melbourne Airport’s revenue per car parkspace was $5231 in 2011-12, the second largest of the monitored airports and31.7 per cent lower than Sydney Airport. Perth Airport experienced the largest increase inrevenue per car park space, increasing to $3239 (up 14.7 per cent). Brisbane Airportexperienced the largest decrease in 2011-12, with $4738 per car park space, 23.0 per centlower than 2010-11.• All airports had increases in operating expenses per car park in 2011-12. The largestoccurred at Perth Airport with an increase of 12.5 per cent to $1052. Sydney Airport hadthe smallest increase of 0.6 per cent, increasing to $2365. Sydney Airport had the highestoperating expense per car park space of any of the monitored airports.• Melbourne and Perth airports increased operating margins per car park space by1.6 per cent and 15.8 per cent respectively. All other monitored airports had decreases inoperating margin per car park space during 2011-12. The largest change in operatingmargins per car park space occurred at Brisbane Airport which declined to $2944, adecrease of 33.0 per cent. Brisbane Airport’s decline is partly attributed to the 31.7 per centincrease in the number of spaces, from 9767 in 2010-11 to 12 862 in 2011-12. SydneyAirport’s operating margin per car park space declined by 6.1 per cent in 2011-12 to $5290.Charts 3.4.1 and 3.4.2 display airport car parking operating margins per car parking space from2001-02 to 2011-12 for all monitored airports.
  • 108. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services83Chart 3.4.1: Operating margins per car parking space, 2001-02 to 2011-1201000200030004000500060002001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12Operatingmarginpercarparkspace($)Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportChart 3.4.2: Operating margins per car parking space in real terms,2001-02 to 2011-1201000200030004000500060002001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12Operatingmarginpercarparkspace($)Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportNote: 2001-02 is used as the base yearKey observations from charts 3.4.1 and 3.4.2 include:• There has been variability in airports’ operating margins per car parking space during theten years to 2011-12.• Sydney and Melbourne airports have exhibited the highest growth in operating marginsper car parking space since 2001-02. However, when adjusted for inflation, Sydney Airportis the only airport to exhibit growth in operating margins per car parking space since2001-02.− Sydney Airport operating margins per car parking space have risen from $3764 in2001-02 to $5290 in 2011-12, an increase of 40.5 per cent. When adjusted for
  • 109. Overview of airport car parking and landside services Airport Monitoring Report 2011-1284inflation, the increase in operating margins per car parking space since 2001-02 is7.2 per cent.− Melbourne Airport margins per car parking space have risen from $3007 in2001-02 to $3942 in 2011-12, an increase of 31.1 per cent. When adjusted forinflation, operating margins per car parking space are unchanged since 2001-02.Chart 3.4.3 displays airport car parking revenue as a proportion of total airport revenue from2007-08 to 2011-12 for all monitored airports.Chart 3.4.3: Airport car parking revenue as a proportion of total airport revenue,2007-08 to 2011-12024681012141618202224Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportPercent2007–08 2008–09 2009–10 2010–11 2011–12Key observations from chart 3.4.3 include:• In 2011-12 total car parking revenue as a share of total airport revenue remained mostlyunchanged from the previous year for all airports excluding Perth Airport.• Perth Airport’s share of car parking revenue to total airport revenue declined from13.9 per cent in 2010-11 to 7.0 per cent in 2011-12. This decline was not related toreduced car parking revenues (which increased 23.2 per cent), rather aeronautical revenueat Perth Airport increased by 14.5 per cent in 2011-12.• Other airports to record changes in the ratio of car parking revenue to total airport revenueinclude Brisbane Airport which declined 0.6 percentage points in 2011-12 to 12.5 per cent,Melbourne which declined 1.0 percentage point to 20.0 per cent and Adelaide whichincreased 0.5 percentage points to 9.7 per cent.• Over the period 2007-08 to 2011-12, shares of car parking revenue to total revenue havebeen relatively consistent for most airports apart from Perth Airport and to a lesser extent,Sydney Airport.− Perth Airport’s ratio of car parking revenue to total airport revenue increased from11.7 per cent in 2007-08 to a high of 17.2 per cent in 2008-09 and dropping to7.0 per cent for 2011-12.
  • 110. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services85− Sydney Airport’s car parking revenue share has been relatively consistent ataround 10 per cent for the last three years, but dropped to a low of 7.8 per cent in2008-09.Chart 3.4.4 displays airport car parking operating margins as a proportion of total airportoperating margins form 2007-08 to 2011-12 for all monitored airports.Chart 3.4.4: Car parking operating margins as a proportion of total airport operatingmargins, 2007-08 to 2011-12051015202530Adelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportPercent2007–08 2008–09 2009–10 2010–11 2011–12Key observations from chart 3.4.4 include:• With the exception of Melbourne Airport, most airports’ car parking margins as a share oftotal airport margins have exhibited variability since 2007-08.− The share at Melbourne Airports has remained relatively constant in the five yearssince 2007-08.− Melbourne Airport’s share of margins earned from car parking relative to totalairport margins has been consistently higher than at other airports.• Perth Airport is the only airport at which the share of car parking margins to total airportmargins has fallen in the five years since 2007-08.• In 2011-12, the share of car parking margins to total airport margins increased only atAdelaide Airport.
  • 111. Overview of airport car parking and landside services Airport Monitoring Report 2011-12863.5 Airport car parking availability and qualityTable 3.5.1 presents data on the number of car parking spaces at each monitored airport forthe past two years.Table 3.5.1: Total airport car parking spaces for 2011-12 and changes from 2010-11Airport Total car parking spacesChange in total car parking spaces(per cent)At 30 June2002At 30 June2011At 30 June2012June 2002 toJune 2012June 2011 toJune 2012Adelaide 1 190 3 000 3 002 ▲152.3 % ▲0.1 %Brisbane 4 335 9 767 12 862 ▲196.7 % ▲31.7 %Melbourne 7 889 22 412 21 924 ▲177.9 % ▼2.2 %Perth 2 141 14 551 15 626 ▲629.8 % ▲7.4 %Sydney 7 731 12 271 13 116 ▲69.7 % ▲6.9 %Key observations from table 3.5.1 include:• Four of the monitored airports increased the number of total car parking spaces during2011-12, while the number of spaces at Melbourne Airport slightly declined.• The largest increase occurred at Brisbane Airport where the number of total car parkingspaces, increased by 31.7 per cent to 12 862 spaces following the opening of a newmulti-level car park servicing domestic travellers.• Perth and Sydney airports increased the number of car parking spaces by 7.4 per cent and6.9 per cent respectively while Adelaide Airport only recorded two additional spacescompared to the previous year.• Melbourne Airport’s car parking facilities provide the highest number of car parking spacesof all monitored airports, with 21 924 spaces. Perth Airport ranks second in terms of thenumber of car parking spaces with 15 626.• Since 2002, Perth Airport has increased the number of car park spaces by 629.8 per cent.The next highest increase in car parking spaces has been at Brisbane Airport(196.7 per cent). Sydney Airport has added proportionately the least number of car parkspaces since 2002, increasing the total number of car park spaces by 69.7 per cent.The ACCC also collects information under the quality of service monitoring requirements thatcan help indicate if airports are providing an appropriate level of service for car parking.The information includes passenger survey results for the availability of car parking and ‘timetaken to enter’ the car park facility (charts 3.5.1 and 3.5.2).
  • 112. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services87Chart 3.5.1: Overall passenger survey results for airport car parking availability,2007-08 to 2011-1201234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAdelaide Airport Brisbane Airport Melbourne AirportPerth Airport Sydney AirportVery poorPoorSatisfactoryGoodExcellentKey observations from chart 3.5.1 include:• Passenger ratings of airport car parking availability ranged from good to just belowsatisfactory across the five monitored airports.• In 2011-12 Brisbane Airport’s availability of car parking was the only one rated as goodamong the monitored airports. Melbourne and Perth airports were rated at just under good.Compared to the previous year, Brisbane and Melbourne airports’ ratings improved whilePerth Airport’s rating was slightly weaker.• Consistent with previous years, Sydney Airport was again rated as satisfactory whileAdelaide Airport’s rating declined for the fourth consecutive year, to poor in 2011-12.
  • 113. Overview of airport car parking and landside services Airport Monitoring Report 2011-1288Chart 3.5.2: Overall passenger survey results for time taken to enter the car park fromthe access road, 2007-08 to 2011-1201234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAdelaide Airport Brisbane Airport Melbourne AirportPerth Airport Sydney AirportVery poorPoorSatisfactoryGoodExcellentKey observations from chart 3.5.2 include:• Passengers rated the time taken to enter the car parking facilities at the five airports assatisfactory to good in 2011-12.• Brisbane Airport received the highest rating after a significant improvement from ratings inthe previous year. The new multi-level parking facilities offered at Brisbane Airport are thelikely driver of the recent increase in its quality of service ratings.• Similar to previous years, Melbourne and Perth airports were also rated as good in terms ofthe time taken to enter the car park.• Adelaide and Sydney airports were again rated as satisfactory, achieving slightly lowerratings in 2011-12 compared to previous years.The indicative capacity of each airport’s car parking facilities has also been derived, based onthe total number of car parking spaces as a ratio of average daily throughput for short-term andlong-term car parking (charts 3.5.3 and 3.5.4).
  • 114. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services89Chart 3.5.3: Total number of short-term car parking spaces as a ratio of average dailythroughput for short-term parking, 2007-08 to 2011-120.000.200.400.600.801.001.202007–08 2008–09 2009–10 2010–11 2011–12CarparkingspacesasaratioofthroughputAdelaide Airport Brisbane Airport Melbourne AirportPerth Airport Sydney AirportKey observations from chart 3.5.3 include:• In 2011-12 Melbourne Airport again recorded the highest short-term car park capacity of allmonitored airports, closely followed by Brisbane Airport which significantly increased itsshort-term car parking capacity from the previous year.• Short-term car parking capacity at Sydney Airport declined even though the total number ofcar parking spaces increased in 2011-12. The number of spaces available for short-termparking declined from 5550 in 2010-11 to 5089 in 2011-12.• Capacity at Perth and Adelaide airports remained similar to previous years. AdelaideAirport has maintained the lowest capacity of all the monitored airports over the five yearssince 2007-08.• In August 2012 Adelaide Airport opened a new multi-level short-term car park which morethan doubled the capacity of the previous short-term car parking facility.108108Adelaide Airport, New Airport Multi-level Car Park Opens Tomorrow, News Release, 5 August 2012, seehttp://www.adelaideairport.com.au/assets/pdfs/media-releases/nr%20-%20car%20park%20opening%205%208%20final.pdf
  • 115. Overview of airport car parking and landside services Airport Monitoring Report 2011-1290Chart 3.5.4: Total number of long-term car parking spaces as a ratio of average dailythroughput for long-term parking, 2007-08 to 2011-12024681012141618202007–08 2008–09 2009–10 2010–11 2011–12CarparkingspacesasaratioofthroughputAdelaide Airport Brisbane Airport Melbourne Airport Perth Airport Sydney AirportKey observations from chart 3.5.4 include:• Perth Airport’s long-term car parking facility had the greatest capacity among the monitoredairports again in 2011-12. Long-term parking capacity at Perth Airport has, however,declined from previous years. While the number of long-term car parking spaces hasincreased in each of the previous five years, the annual throughput of the international and,in particular, the domestic long-term car park has continued to expand.• The indicative long-term car parking capacity improved at Sydney Airport, which moved upto rank second after Perth in 2011-12.• While Brisbane and Adelaide airports improved their capacity in 2011-12, they recorded thelowest capacity among the five airports.3.6 Landside access charges and revenuesIn many cases, there are alternatives to on-airport car parking available to consumers as ameans of travelling to and from an airport. These include private vehicles, taxis, trains, buses,bicycles and private car operators (such as hire cars and chauffeur-driven cars). Consumersarriving in a private vehicle have the option of using drop-off or pick-up facilities or usingon-airport or off-airport car parking facilities. In order for private operators to be able to supplyalternatives services, they first require access to airport land and facilities.As airports control the price, terms and conditions of access to airport land, they have theability to influence the level of competition between on-airport car parking and other landsidealternatives to access the airport. For example, provision of alternative services by privateoperators could be frustrated if airports levied excessive access fees or influenced alternativesto on-airport car parking through non-price means, such as setting inconvenient locations forpick-up and drop-off points.Charges and revenues associated with landside access are also collected through the ACCC’sairport monitoring program, providing an indication of the range of alternatives to on-airport carparking and the conditions imposed on the operators of these services. Table 3.6.1 presents
  • 116. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services91information on the range of landside access charges imposed on transport operators at each ofthe monitored airports at the end of 2010-11 and 2011-12.Table 3.6.1 Landside access charges as at 30 June 2011 and 30 June 2012, andpercentage change in charges between those years109Airport Operator 2010-11 2011-12 Change (%)AdelaidePublic bus No charge No charge 0.0 %Private bus No charge No charge 0.0 %Off-airport car parking No charge No charge 0.0 %Taxis $2.00 per pick-up $2.00 per pick-up 0.0 %Private car operators $2.00 per entry $2.00 per entry 0.0 %BrisbanePublic bus Monthly fee Monthly fee NAOff-airport car parking Monthly fee Monthly fee NATaxis $3.00 per pick-up $3.00 per pick-up 0.0 %Train $145 000 corridor lease $149 000 corridor lease ▲ 2.8 %Private bus and privatecar operatorsVarious Various VariousMelbournePublic bus No charge No charge 0.0 %Private bus Various Various 0.0 %Off-airport car parking Various Various 0.0 %Taxis $1.32 per pick-up $1.32 per pick-up 0.0 %Private car operators $3.00 per 30 minutes $3.00 per 30 minutes 0.0 %PerthPublic bus No charge No charge 0.0 %Private bus No charge No charge 0.0 %Off-airport car parking No charge No charge 0.0 %Taxis $2.00 per pick-up $2.00 per pick-up 0.0 %Private car operators $2.20 per entry $3.00 per entry ▲ 36.4 %SydneyPublic bus No charge No charge 0.0 %Private bus Various Various 0.0 %Off-airport car parking Various Various 0.0 %Taxis $3.00 per pick-up $3.50 per pick-up ▲ 16.7 %Private car operators $3.50 per entry $4.50 per entry ▲ 28.6 %Key observations from table 3.6.1 include:• At Melbourne and Adelaide airports all landside access charges remained unchanged in2011-12 while Brisbane, Perth and Sydney airports increased a small number of charges.• Both Sydney and Perth airports increased the charge imposed on private cars to $4.50 and$3.00 per entry respectively. Sydney Airport also increased the charge on taxis by16.7 per cent to $3.50 per entry.109Table 3.6.1 excludes revenue generated from car rental operations and premium services such as valet parking.
  • 117. Overview of airport car parking and landside services Airport Monitoring Report 2011-1292• Similar to the previous year, Brisbane Airport increased the charge it imposes for trainaccess by 2.8 per cent.Table 3.6.2 presents information on the monitored airports’ landside access revenue at the endof 2010-11 and 2011-12.Table 3.6.2 Landside access revenues as at 30 June 2011 and 30 June 2012, andpercentage change in revenues between those yearsAirport Operator 2010-11 2011-12 Change (%)AdelaidePublic bus Nil Nil 0.0 %Private bus Nil Nil 0.0 %Off-airport car parking Nil Nil 0.0 %Taxis $253 400 $243 200 ▼ 4.0 %Private car operators $44 000 $31 000 ▼ 29.5 %Total $297 400 $274 200 ▼ 7.8 %BrisbanePublic bus $124 000 $107 000 ▼ 13.7 %Off-airport car parking $237 000 $331 000 ▲ 39.7 %Taxis $3.1 million $3.5 million ▲ 11.6 %Train $145 000 $149 000 ▲ 2.8 %Private bus and private car operators $1.7 million $1.75 million ▲ 2.7 %Total $5.3 million $5.8 million ▲ 9.2 %MelbournePublic bus Nil Nil 0.0 %Private bus and off-airport car parking $3.8 million $4.0 million ▲ 5.4 %Taxi $2.2 million $2.1 million ▼ 4.6 %Private car operators $607,000 $927,000 ▲ 52.7 %Total $6.6 million $7.0 million ▲ 6.4 %PerthPublic bus Nil Nil 0.0 %Private bus Nil Nil 0.0 %Off-airport car parking Nil Nil 0.0 %Taxis $1.9 million $2.0 million ▲ 6.9 %Private car operators $153,000 $229,000 ▲ 49.7 %Total $2.1 million $2.3 million ▲ 10.1 %SydneyPublic bus Nil Nil 0.0 %Private bus $427 000 $1.7 million ▲ 297.2 %Off-airport car parking Nil Nil 0.0 %Taxis $7.9 million $9.5 million ▲ 19.6 %Private car operators $923 000 $1.7 million ▲ 87.4 %Other $446 000 $407 000 ▼ 8.7 %Total $9.7 million $13.3 million ▲ 36.9 %Key observations from table 3.6.2 include:• Total revenue earned from landside access operations increased by almost 20 per cent toaround $28.7 million in 2011-12.• Adelaide Airport earned less revenue from both taxi and private car operations comparedto the previous year. Adelaide Airport earned by far the least of all five airports in terms ofrevenue from landside access operations. Overall, revenue from landside access chargesdecreased by 7.8 per cent to $274 200 in 2011-12.
  • 118. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services93• Brisbane Airport received about $5.8 million in landside access revenue in 2011-12.Revenue increased from most landside access operations, including off-airport car parkingwhich increased by 39.7 per cent to $331 000. Revenue from taxis also increased, by11.4 per cent, even though charges imposed on taxis remained unchanged from theprevious year.• Melbourne Airport’s revenue from landside access increased by 6.4 per cent to$7.0 million. The largest contributors to total revenue were receipts from private bus andoff-airport car parking operators which added around $4.0 million, up by 5.4 per cent fromthe previous year. Private car operations, however, showed the largest percentageincrease in landside access revenue, increasing by over 50 per cent in2011-12.• Perth Airport also earned greater revenue from landside access operators in 2011-12, upby 10.1 per cent to $2.3 million. Revenue from private car operations also increasedsubstantially at Perth Airport.• Sydney Airport’s revenue from landside access was the highest of all five airports at$13.3 million, increasing by 36.9 per cent in 2011-12. Revenue from taxis provided thelargest contribution to total landside access revenue, at $9.5 million. As a result of a highercharge and greater taxi volumes, revenue from taxis increased by almost 20 per cent in2011-12. The increase in private bus revenue partly represents more accurate datacollection in 2011-12 and incomplete data collection in prior years.• While Melbourne, Perth and Sydney airports all earned significantly greater revenue fromprivate car operators in 2011-12, Melbourne Airport did so without increasing charges onoperators.3.7 Observations from the monitoring results forairport car parking and landside accessThe ACCC’s airport monitoring program collects a range of information about the performanceand conduct of the five monitored airports in Australia’s largest capital cities.The following sections consolidate the information about airport car parking and landsideaccess services, and provide an assessment of each airport’s performance in the provision ofthese services in 2011-12.In addition, the following sections also highlight the major investment projects that haverecently been completed, or that are currently underway at each of the monitored airports.Given the recent increase and expected future growth of passenger and aircraft volumes,sufficient planning and investment in car parking facilities, terminal roads, kerbsidemanagement, and other facilities used by landside operators will be a key factor in maintaininga competitive environment for car parking and landside access services.3.7.1 Adelaide AirportPrevious ACCC Airport Monitoring Reports have noted capacity constraints at AdelaideAirport’s car parking facilities. In 2011-12 monitoring results were similar to previous years withlittle change in capacity, although construction of a new multi-level car park was nearingcompletion.Adelaide Airport’s rating in terms of car parking availability fell to poor, with the lowest ratingamong the five monitored airports. With the smallest car parking capacity of all the monitored
  • 119. Overview of airport car parking and landside services Airport Monitoring Report 2011-1294airports, Adelaide Airport continued to have the lowest revenue from car parking servicesamong the monitored airports in 2011-12.However, despite continued capacity issues, Adelaide Airport has kept car parking pricesrelatively stable. For the second year in a row, car parking prices remained unchanged in2011-12, and have only increased marginally since around 2005-06.Investment at Adelaide AirportIn 2010-11, Adelaide Airport advised that it had started construction of a new multi-level carpark as part of its Landside Infrastructure Project. Stage 1 of this project commenced in2010-11 and provided an additional multi-lane road access to and from Terminal 1 inpreparation for a new drop-off/pick-up zone, and was completed in August 2011. Stages 2 and3 of the project involved the construction of a 2000-vehicle car park and of a drop-off/pick-upzone.Adelaide Airport’s new multi-level short-term car park opened on 6 August 2012, more thandoubling capacity. Short-term car parking prices increased with the opening of the new facility.At this stage there are no further expansion plans for landside access facilities.3.7.2 Brisbane AirportBrisbane Airport opened its new domestic terminal multi-level car park in March 2012, providingmore than 5000 additional undercover parking spaces. The number of total car parking spacesincreased by 31.7 per cent and ratings for availability and ‘time taken to enter the car park’ bothreached relatively high levels compared to the other monitored airports.Brisbane Airport increased some of its price points at its newly completed short-term domesticcar park. Prices at the domestic long-term car park and international car parks were unchangedfrom the previous year.Over 2011-12 Brisbane Airport recorded a slight increase in car parking revenue but adecrease in car parking operating margin due to a significant increase in car parking operatingexpenses (the largest of any monitored airport). Brisbane Airport’s 1.4 per cent increase in carparking revenue is the smallest increase in car parking revenue reported by the airport over theperiod from 2003-04 to 2011-12. Conversely, car parking operating expenses saw the highestincrease since 2004-05 as a result of higher costs associated with investment in car parkingservices.Brisbane Airport’s total landside access revenue increased by 9.2 per cent to $5.8 million in2011-12. This is down from the increase of 22.3 per cent reported last year. The increase in2011-12 is mostly attributed to an increase in throughput as Brisbane Airport’s only reportedprice increase was for its Airtrain lease.Investment at Brisbane AirportThe opening of the new domestic terminal multi-level car park was the major investment projectin 2011-12.Additional projects post 30 June 2012 included a new pick-up waiting area at its domesticterminal which opened in September 2012.Brisbane Airport has, however, faced some challenges with this upgrade. Since the openingthere have been numerous reports in the media claiming that the changes at Brisbane Airport
  • 120. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services95have been ineffective in dealing with issues and have resulted in a number of complaints aboutincreased inconvenience to passengers.Brisbane Airport subsequently issued a press release on 24 October 2012 acknowledgingproblems with its new passenger pick-up waiting area and announcing details of an interimsolution to address these issues.110As part of the new arrangements, a 30 minute free parkingwill be permitted in the pick-up waiting area before standard short-term parking rates apply.3.7.3 Melbourne AirportMelbourne Airport’s car parking facilities provide the highest number of car parking spaces ofall monitored airports, although the number of car parking spaces fell slightly in 2011-12.Passengers have rated the availability and ‘time taken to enter the car park’ at MelbourneAirport relatively highly, which again recorded the highest short-term car park capacity of allmonitored airports.Melbourne Airport did not increase car parking prices, and reduced some prices at both itslong-term uncovered car park and also in the northern business car park. In the period after30 June 2012, however, a number of prices increased at Melbourne Airport’s car parks.For the first time since 2001-02, Melbourne Airport reported a decrease in operating marginsfor airport car parking in 2011-12 as operating expenses increased while revenues remainedrelatively constant.Melbourne Airport’s total revenues from landside access services increased by 6.4 per cent to$7.0 million in 2011-12. In 2011-12, the increase in revenues was attributable to increasedthroughput as the airport did not increase any of its landside access fees.Investment at Melbourne AirportMelbourne Airport completed a redevelopment of its forecourt in December 2011. This projectinvolved the construction of an additional lane for passenger pick-up and drop-off. MelbourneAirport also opened a new ramp for accessing the freeway in August 2012, which provides analternative route for exiting the airport.• Melbourne Airport has also begun an expansion of its long-term car park, expected to becompleted by March 2013. This project will provide an additional 2400 spaces, includingpublic and staff car parking. Melbourne Airport have stated that in its 2013 master plan, itwill include a plan to construct a new elevated loop road above its existing road network.This elevated loop road is proposed to cater for more vehicles and reduced travel times.1113.7.4 Perth AirportThe number of car parking spaces at Perth Airport increased by another 7.4 per cent in2011-12, following an increase of 26.2 per cent in the previous year. Perth Airport ranks secondamong the five monitored airports in terms of the number of car parking spaces.Similar to the previous year, Perth Airport increased prices for the majority of their various carparking price points across all car parks in 2011-12.110Brisbane Airport, BAC announces changes to ‘pickup at BNE domestic, 24 October 2012.111Melbourne Airport, Getting to and from Melbourne Airport, Fact Sheet, November 2012.
  • 121. Overview of airport car parking and landside services Airport Monitoring Report 2011-1296The largest increase in car parking revenue of all monitored airports occurred at Perth Airportwhich increased by 23.2 per cent to $50.6 million. Perth Airport’s car parking operating marginfor 2011-12 was $34.2 million, up 24.3 per cent from 2010-11. As with revenue growth, PerthAirport’s increase in car parking operating margin was the largest of the monitored airports.In 2011-12, Perth Airport’s total landside access revenue increased by 10.1 per cent. This waspartly due to Perth Airport increasing its fee for private car operators by 36.4 per cent, as wellas increased throughput of taxis and private car operators.In previous Airport Monitoring Reports, the ACCC noted that Perth Airport does not imposeaccess charges on off-airport car parking operators. This increases the potential for competitionto on-airport car parking to provide a constraint on an airport’s own car parking prices andreduces the likelihood of economic welfare losses. Notably, however, the ACCC also observedthat Perth Airport does not provide a separate kerbside pick-up area for off-airport car parkingand private bus operators, so it would not face the same costs of providing landside access asthe other monitored airports.Investment at Perth AirportPerth Airport in particular has experienced strong passenger growth in recent times. With theexception of 2005-06, Perth Airport has had the highest percentage growth in passengerthroughput in every year since 2000-01 among all the monitored airports.Over this period, Perth Airport gradually increased its short-term and long-term car parkingfacilities. On top of significant car parking expansions in 2004-05 and 2007-08, in 2010-11there was sharp rise in parking spaces as a result of the completion of the park-and-ride facility,which provided 3000 new spaces.In 2011-12, Perth Airport constructed a new intersection, providing alternative access to andfrom the international terminal. The new intersection was commissioned in April 2012.Perth Airport is continuing an expansion of its long-term and staff car parking capacity forinternational terminal users and other precinct users. Stage 3 of this project was completed inDecember 2012, providing an additional 1760 car parking spaces.3.7.5 Sydney AirportIn 2011-12, Sydney Airport increased car parking spaces and experienced an increase in carparking throughput, with car parking spaces increasing by 6.9 per cent and annual throughputincreasing by 1.2 per cent. The largest increase in annual car parking throughput reported bySydney Airport occurred in 2010-11, when car parking throughput increased by 17.4 per cent.Sydney Airport increased all car parking prices except for the first 30 minutes of car parking atits international multi-level car park. Compared to the other airports, Sydney Airport had thehighest short term car parking prices for a number of parking durations including one, three,eight and 24 hours.Sydney Airport’s car parking revenue, operating costs and operating margin all increased in2011-12. The airport’s operating margin increased by 0.4 per cent to $69.4 million, representingaround 29.2 per cent of its total airport operating margin.Sydney Airport’s revenue per car parking space was the largest of all monitored airports,though decreased by 4.1 per cent in 2011-12 due mainly to the additional spaces madeavailable.Sydney Airport’s total landside revenues increased by 36.9 per cent in 2011-12, compared witha 4.9 per cent increase in the previous year. The increase in landside revenues was in part
  • 122. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services97driven by an increase in access charges to taxis and private car operators of 16.7 per cent and28.6 per cent respectively, and an increase in demand for landside services.Investment at Sydney AirportSydney Airport completed an expansion of its long-term domestic car park in April 2012,providing 1387 additional car parking spaces. Other investments at Sydney Airport during2011-12 include construction of a new slip lane for its 10 minute free vehicle waiting area,provision of additional taxi bays and a new on-line booking system for airport car parking.In addition Sydney Airport completed a new $47 million multi-storey car park at the internationalterminal in August 2012, with approximately 2300 spaces.Future investments planned include plans to construct a new 900 space multi-storey car park atthe domestic terminal located on Seventh Street as well as a shuttle bus ‘slip lane’ to facilitatequicker transit times for the shuttle bus between the long-term car park and the domesticterminal.3.8 Passenger growth, capacity constraints andinvestment in airport car parking and landsideservicesProjected growth in passenger numbers will increase demand for landside access at monitoredairports. This will create the need for planning and efficient investment in car parking facilities,terminal roads, kerbside management, and other facilities used by landside operators supplyingalternatives to on-airport car parking.There are a number of alternatives to on-airport car parking available to consumers. Theseinclude taxis, trains, off-airport car parking, buses, hire cars and even bicycles. Thesealternatives vary in their levels of substitutability for on-airport car parking.Access to airport land is required in order to supply an alternative to on-airport car parking.Airports control the price, terms and conditions of access to airport land. Therefore, airportshave some control over the cost and convenience of getting to and from an airport, in somecases regardless of the particular transportation mode chosen by a consumer.As noted, the monitored airports also provide pick-up and drop-off facilities that passengers canuse when accessing an airport. With the exception of Sydney Airport, pick-up and drop-offfacilities are the main form of access to the monitored airports by passengers using privatevehicles.112As noted in section 3.2, each airport offers different combinations of services forpick-up and drop-off, which can include kerbside access at the front of the terminal, park andwait areas, or a combination of both.The ACCC’s previous monitoring reports have discussed at length the airports’ incentives andability to limit, or delay investment in, the supply of car parking and landside access facilities tomaintain artificial scarcity. If they did not provide sufficient capacity, airports could limit demandfor car parking by charging higher prices for existing car parking facilities. Likewise an airportcould also under-invest in forecourt facilities, to maintain a scarcity of supply allowing airportsto charge higher prices for existing investment or imposing unfavourable terms on the accessof the forecourt.112Productivity Commission, Economic Regulation of Airport Services, Inquiry report no. 57, Canberra, December2011.
  • 123. Overview of airport car parking and landside services Airport Monitoring Report 2011-1298In preparing the 2009-10 Airport Monitoring Report, the ACCC spoke with a number of landsideoperators providing alternatives to on-airport car parking at the monitored airports. Thesestakeholders expressed similar concerns to the PC 2011 inquiry.113For example, providers ofalternatives to on-airport car parking expressed dissatisfaction over the cost and convenienceof landside access services provided by some monitored airports, in particular, Brisbane andMelbourne.Providers of alternatives to on-airport parking generally considered that it is appropriate forairports to charge access fees, as these allow the airports to recover the costs of maintainingaccess roads and kerbside facilities. However, these providers have also expressed concernsover the precise level and basis for charging for access at some airports.Some providers also raised concerns over the rate at which access charges at some airportshave increased in recent years. For example, in its submission to the PC’s 2011 inquiry intoairport regulation, Andrews Airport Parking (AAP) noted that the licence fees it pays toBrisbane Airport have increased by 134 per cent in five years. AAP has noted that over thattime there was a significant expansion in the number of off-airport parking operators, whichwould likely allow the airport to collect revenue from more operators to cover costs of kerbsideand road maintenance and development.Landside operators have also raised concerns over the convenience of landside accessfacilities, and the level of investment undertaken by some of the monitored airports to meetgrowing demand.As noted, several major investment projects are underway or have recently been completed bythe monitored airports. Looking forward, it will be imperative that the airports liaise with usersand governments to develop appropriate landside solutions to address growth. Suchengagement with stakeholders will ensure landside developments are fit for purpose, deliversufficient capacity and integrate with wider infrastructure networks.3.8.1 Future growth and future landside investmentIt was noted in chapter 1 that the Bureau of Infrastructure, Transport and Regional Economics(BITRE) has projected that by 2031, passenger throughput at the monitored airports will haveincreased by around 104.1 per cent to 217 million passengers per year. BITRE has alsoprojected that by 2030, aircraft movements at the monitored airports will have increased byaround 56.4 per cent to 1.5 million movements per year.Such growth may put pressure on two aspects of landside services and infrastructure:• Landside infrastructure within an airport, including car parks, taxi holding areas, trainplatforms and other facilities, pick-up and drop-off areas and roads surrounding theterminals and connecting the airport to the major roads outside of the airport precinct.• Landside networks, such as road and rail networks, used for travelling to and from anairport.Some parties have raised some concerns with the current level of landside infrastructurearound some Australian airports.For example, a Joint Study commissioned by the Australian and New South WalesGovernments into aviation capacity for the Sydney Region, released in March 2012, highlightedlandside concerns and noted that road and rail access to Sydney Airport is approachinggridlock. In particular, the report recommended a range of minor improvements to the short-113Productivity Commission, Economic Regulation of Airport Services, Inquiry report no 57, Canberra, December 2011.
  • 124. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services99term parking, pick-up and drop-off and terminal road circulation arrangements around SydneyAirport.It is important to note that the transportation networks around Sydney will not only be affectedby projected growth in passenger numbers, but also by expected growth in trade passingthrough Sydney Ports. As noted, BITRE has forecast that passenger numbers at SydneyAirport will increase from 36.3 million in 2011-12 to 72.0 million in 2030-31.114Sydney Ports,which shares some access roads with the airport, has forecast that container movements at theadjacent Port Botany terminals will grow from around 2 million twenty-foot equivalent units(TEUs) in 2011 to 7 million TEUs in 2031.115This will put additional pressure on the existingtransportation networks in the Sydney area, especially roads. Investment and incentives toencourage greater and more efficient use of rail networks may be required to handle thisadditional throughput at the port and airport.Future investment in car parking and landside infrastructureThere are a number of investments currently planned by the monitored airports to expandcapacity in car parking and other landside facilities. These will contribute to the airports’ abilityto service projected growth in passenger numbers in the coming years.Two examples of major investments planned by the airports are:• Sydney Airport’s plans to construct a new 900 space multi-storey car park at the domesticterminal located on Seventh Street.• Melbourne Airport’s expansion of its long-term car park, expected to be completed byMarch 2013 and provide an additional 2,400 car parking spaces.Development of landside networksWhile each airport is responsible for planning and developing terminal access roads and carparking facilities within the airport boundaries, outside the airport boundaries there is a widergroup of stakeholders that needs to be the involved to make efficient investment decisions.Establishing efficient landside networks for getting to and from an airport requires planning andcollaboration between a number of parties such as airports, landside operators, local and stategovernments and the Australian Government.To this end the Australian Government has established a number of forums and workinggroups to facilitate coordination between the airports and the three levels of government. Inrecognition of landside capacity concerns, Brisbane, Melbourne and Perth Airports inconjunction with their respective state governments have either announced or recentlycompleted road works in or around their airports to improve access and ease congestion.Other factors impacting on landside management also include security requirements that setout certain rules for the airports in allowing access to roads surrounding the terminal forecourts.114Bureau of Infrastructure, Transport and Regional Economics, Air passenger movements through capital and non-capital city airports to 2030-31, Research report no. 133, November 2012.115Infrastructure New South Wales, The State Infrastructure Strategy: 2012-2032, October 2012.
  • 125. Overview of airport car parking and landside services Airport Monitoring Report 2011-121003.8.2 Planning for and supporting future investmentThe process an airport must undertake for planning landside infrastructure and systems islengthy and involves input from a number of parties, including the airports themselves, theirusers, governments and other stakeholders.The planning process also involves planning for the long-term, as not only do these projectshave long lead times, but the airports are required to consult and submit development plans tothe Minster for Infrastructure and Transport for approval.As noted in the discussion on aeronautical capacity constraints in chapter 2, under the AirportsAct 1996 (Airports Act) the airports are required to establish a forward-looking master plan andsubmit major development plans for the approval of the Minister for Infrastructure andTransport. In recognition of the need to better integrate plans for investment in ground transportand airport access networks with off-airport transport, the Airports Act was amended in 2010 toincorporate additional planning requirements for landside access.The Airport Act requires that the airports provide details on their ground transport system intheir master plans, which are updated every five years. The ground transport systems arerequired to include information on:• a road network plan• facilities for moving people and freight• linkages between the facilities, the road network and public transport system at and outsidethe airport• arrangements with state or local authorities or other bodies responsible for the roadnetwork and public transport system• the capacity of the ground transport system.These master plans also provide a basis for assessing the performance of airports in meetingtargeted investment outcomes.To some degree, airport development plans are constrained by local planning and developmentrestrictions as well as security requirements.Cooperation between all parties is necessaryPlanning, collaboration and investment in landside facilities, particularly those transportationnetworks outside of airport borders, will be required to complement significant airside capacityexpansion and aeronautical growth at airports.As noted, establishing efficient landside networks for getting to and from an airport requiresinput from a number of parties. As airports continue to grow, and the surrounding landsideinfrastructure becomes increasingly congested, effective cooperation between responsibleparties will be important to implement effective landside solutions.An airport’s landside infrastructure can be broadly categorised as that existing within an airportprecinct and that which lies outside of the airport land precinct.Landside infrastructure within an airport broadly consists of car parks, taxi holding areas, trainplatforms and other facilities, pick-up and drop-off areas and roads surrounding the terminalsand connecting the airport to the major roads outside of the airport precinct. A number of
  • 126. Airport Monitoring Report 2011-12 Overview of airport car parking and landside services101parties – such as airports, landside operators, consumers – are involved in either operating,planning or using landside infrastructure within the airport precinct.Beyond the airport boundaries, landside infrastructure consists of road and rail networks usedby consumers to access the airport. To manage this infrastructure, governments, statetransport agencies and airports must work together to promote landside safety and efficiency.Cooperation is necessary and to assist in the effectiveness of the planning process. It will beimportant that the airports liaise with users and governments to develop appropriate landsidesolutions to address forecast growth, to ensure they are fit for purpose and deliver sufficientspare capacity.Joint responsibilitiesFor example, the airport is responsible for planning and developing terminal access roads andcar parking facilities within the airport boundaries. However, outside the airport boundaries,there needs to be the involvement of local and state governments working in conjunction withthe airports to ensure that the needs of users are met. To this end the Government hasestablished a number of forums and working groups to facilitate coordination between theairports and the three levels of government. This type of cooperation and engagement willbecome increasingly important as airport services grow in volume.In recognition of landside capacity concerns, Brisbane, Melbourne and Perth airports inconjunction with their respective state governments have either announced or recentlycompleted road works in or around their airports to improve access and ease congestion.Relevantly, however, the issue of a rail link to Melbourne Airport is still subject to considerableconjecture. While the debate over whether Melbourne Airport would benefit from a rail link tothe airport and who should build it has been continuing for a long time, the issue does not seemto be closer to resolution. Melbourne Lord Mayor Robert Doyle has published an opinion piecein the local press calling for the construction of a rail link.116Melbourne Airport has noted thepotential benefits of a rail link (once a critical mass of 40 million passengers is reached), but itsees the project as the responsibility of the state government.117This would appear to be anexample of a landside project requiring a coordinated approach by the airport, local and stategovernments and other stakeholders in order to come to fruition. The debate around thisproject highlights the imperative of collaboration among relevant stakeholders to promoteinvestment in key landside infrastructure projects.Monitoring investment outcomesTo increase transparency of airports’ performance and progress against investment plans, thisyear’s airport monitoring program was extended to collect details of completed, ongoing andplanned investment in monitored airports’ landside infrastructure.By reporting on progress with airport investment, the Airport Monitoring Report (AMR) canprovide further observations on how monitored airports are responding to any congestionissues at the landside and whether there are issues outside the airport boundaries that areinfluencing the efficiency of landside infrastructure networks.This information, in conjunction with the airport’s own master plans, will assist in betterassessing the extent to which the airports are meeting the needs of their users.116Robert Doyle Cr “Lets build an airport rail link without delay as its time to improve Tullamarine”, Herald Sun 6January 2013. See http://www.heraldsun.com.au/opinion/lets-build-an-airport-rail-link-without-delay-as-its-time-to-improve-tullamarine/story-e6frfhqf-1226548121790; viewed, 9 April 2013.117See “Cars, trains, buses ... and planes are on Melbourne Airport chief Chris Woodruffs agenda”, Herald Sun 2 April2013; at http://www.heraldsun.com.au/business/cars-trains-buses-and-planes-are-on-melbourne-airport-chief-chris-woodruffs-agenda/story-fn7j19iv-1226611241716; viewed 9 April 2013.
  • 127. Overview of airport car parking and landside services Airport Monitoring Report 2011-12102
  • 128. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1034 Adelaide AirportKey points• Total passenger numbers at Adelaide Airport decreased by 4.0 per cent in 2011-12 to7.1 million passengers. This decline was caused by reductions in domestic passengernumbers due mainly to subdued economic conditions, the cessation of services by TigerAirways, and the Qantas grounding and associated industrial relations issues.• Reflecting lower passenger numbers, total aeronautical revenue decreased by 9.3 per centin 2011-12 to $78.1 million.• Aeronautical revenue per passenger, used by the ACCC as an alternative measure foraverage prices, decreased in 2011-12 by 5.5 per cent to $11.01 per passenger.• Total aeronautical operating expenses decreased by 1.7 per cent in 2011-12 to$46.0 million. On a per passenger basis, aeronautical operating expenses increased by2.4 per cent to $6.48 per passenger.• Total aeronautical operating margin decreased by 18.3 per cent in 2011-12 to $32.1 million.On a per passenger basis, the decrease was 14.8 per cent to $4.53 per passenger.• Aeronautical services return on non-current assets decreased by 2.6 percentage points to7.6 per cent in 2011-12.• Car parking prices at Adelaide Airport remained unchanged for both short and long-termcar parking for the second consecutive year.• Car parking revenue decreased by 4.9 per cent in 2011-12 to $14.0 million. Car parkingrevenue per car park space decreased by 5.0 per cent to $4673, which was due to carparking revenue decreasing during the year.• Total car parking operating margin decreased by 10.0 per cent in 2011-12 to $9.5 million.• Major investments completed at Adelaide Airport during 2011-12 included stage 1 of theLandside Infrastructure Project, which provided an additional multi-lane road to and fromT1 in preparation for a new drop-off/pick-up zone, a new 2000 vehicle car park and abaggage handling system upgrade.• Additions to aeronautical tangible non-current assets were $59.9 million, equivalent to13.4 per cent of total tangible aeronautical non-current assets.• Adelaide Airport’s overall rating for quality of service decreased during 2011-12, butremained within the satisfactory range.• Other quality of service rating outcomes for Adelaide Airport include:− Average rating for the international terminal decreased slightly within the goodcategory.− Average rating for the domestic terminal also decreased in 2011-12, but remainedrated as satisfactory.− Average rating for other airport services increased but remained rated assatisfactory.
  • 129. Adelaide Airport monitoring results Airport Monitoring Report 2011-12104This chapter presents the detailed prices monitoring, financial performance and quality ofservice monitoring results in relation to the supply of aeronautical services and car parkingservices at Adelaide Airport. This chapter is structured as follows:• Overview of aeronautical and car parking monitoring results (section 4.1)• Airport overview and major airport investments (section 4.2)• Aeronautical prices monitoring and financial performance results (section 4.3)• Aeronautical services quality of service monitoring results (section 4.4)• Car parking services monitoring results (section 4.5).• Adelaide Airport price and quality of service monitoring beyond 2011-12 (section 4.6)4.1 Overview of aeronautical and car parkingmonitoring results4.1.1 Key aeronautical services indicators for 2011-12Table 4.1.1: Adelaide Airport—key aeronautical services indicatorsPassengernumbers(million)Totalaeronauticalrevenue($million)Aeronauticalrevenue perpassenger($)Totalaeronauticaloperatingmargin($million)Aeronauticaloperatingmargin perpassenger($)Aeronauticalrevenue as a% of totalairportrevenue%2010-11 7.4 86.1 11.64 39.3 5.31 53.62011-12 7.1 78.1 11.01 32.1 4.53 53.8%change ▼ 4.0% ▼ 9.3% ▼ 5.5% ▼ 18.3% ▼ 14.8% ▲ 0.2ppTable 4.1.1: Adelaide Airport—key aeronautical services indicators (cont...)Totaltangibleaeronauticalnon-currentassets($million)Rate ofreturn ontangibleaeronauticalnon-currentassets(%)Averagequality ofservicerating foravailabilityof airportservicesAveragequality ofservicerating forstandard ofairportservicesAirlinerating forquality ofservicePassengerrating forquality ofservice2010-11 399.3 10.2 4.08 3.73 3.67 3.812011-12 445.9 7.6 3.96 3.74 3.66 3.72%change ▲ 11.7% ▼ 2.6pp ▼ 3.1% ▲ 0.2% ▼ 0.3% ▼ 2.2%
  • 130. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1054.1.2 Key car parking services indicators for 2011-12Table 4.1.2: Adelaide Airport—car parking prices as at 30 JuneShort-term car parking Long-term car parking1 hour 3 hours 8 hours 24 hours 1 day 3 days 7 days2010-11 $4.00 $11.00 $26.00 $30.00 $25.00 $50.00 $70.002011-12 $4.00 $11.00 $26.00 $30.00 $25.00 $50.00 $70.00%change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Table 4.1.3: Adelaide Airport—key car parking services indicatorsNumber ofcar parkspaces(thousand)Total carparkingrevenue($million)Car parkingrevenue percar parkspace($)Total carparkingoperatingmargin($million)Car parkingoperatingmargin percar parkspace($)Car parkingrevenue as a% of totalairportrevenue%2010-11 3.0 14.8 4 918 10.6 3 534 9.22011-12 3.0 14.0 4 673 9.5 3 179 9.7%change ▲ 0.1% ▼ 4.9% ▼ 5.0% ▼ 10.0% ▼ 10.1% ▲ 0.5ppTable 4.1.3: Adelaide Airport—key car parking services indicators (cont...)Landsideaccessrevenue($million)Landsideaccessrevenue asa % of totalairportrevenue%Passengerrating foravailabilityof airportcar parkingPassengerrating forstandard ofairport carparkingPassengerrating fortime takento enterairport carpark2010-11 0.3 0.2 3.03 3.52 3.602011-12 0.3 0.2 2.82 3.14 3.45%change ▼ 7.8% 0.0pp ▼ 6.9% ▼ 10.8% ▼ 4.2%4.2 Airport overview and major airport investmentsThis section presents information about Adelaide Airport, along with activity and investment in2011-12. This includes: passenger / traffic mix (section 4.2.1); terminal configurations and carparking facilities (section 4.2.2); and major airport investments (section 4.2.3).4.2.1 Passenger / traffic mixAround 7.1 million passengers travelled through Adelaide Airport in 2011-12. Domesticpassengers (including domestic on-carriage passengers) accounted for 90.7 per cent of total
  • 131. Adelaide Airport monitoring results Airport Monitoring Report 2011-12106passengers, while international passengers (including transit passengers) accounted for9.3 per cent of total passengers at Adelaide Airport (chart 4.2.1).Chart 4.2.1: Adelaide Airport passenger mix, 2011-124.2.2 Terminal configurations and car parking facilitiesTerminal configurationsAdelaide Airport operates a single multi-user integrated terminal (T1) that servicesinternational, domestic and regional passengers.• Adelaide Airport advised that T1 has common outbound check-in, baggage handling andsecurity screening for all passengers. Inbound international passengers are separated andprocessed separately through border agencies’ mandated procedures. “Swing gates” areused to isolate international areas within the terminal when required, with the wholeterminal available to all passengers the rest of the time.• Adelaide Airport opened its new multi-user terminal in October 2005, with Qantastransferring its domestic operations from the terminal occupied and operated under adomestic terminal lease (DTL) to the new terminal in February 2006. Since February 2006,Adelaide Airport ceased to have a DTL, and all areas of the multi-user integrated terminalhave been subject to monitoring and are included in the ACCC’s monitoring results.Therefore, monitoring data from before February 2006 does not include data on passenger-related services and facilities provided within the domestic terminal operations of Qantas.As a result, the analysis in this report will focus on monitoring data since 2006-07, the firstfull year the domestic terminal operations covering Qantas were included.90.6%8.9%0.4%0.1%Domesticpassengers (including regionalpassengers)International passengers(excluding transit passengers)International transit passengersDomesticon-carriage
  • 132. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results107Car parking facilitiesAdelaide Airport provides two car parking facilities—a short-term car park located in front of itsmulti-user integrated terminal (T1) and a long-term car park that is serviced by a free shuttlebus provided by the airport.• In 2010-11, Adelaide Airport advised that it had started construction of a new multi-level carpark as part of its landside infrastructure project. Adelaide Airport commented that itsexisting car parking facilities were frequently operating beyond capacity. In the past,Adelaide Airport advised that it had adjusted its car park prices to encourage more efficientuse of the car park by, for example, encouraging long-stay vehicles to use the long-termcar park.• Adelaide Airport’s new multi-level short-term car park opened on 6 August 2012. AdelaideAirport increased its short-term car parking prices to coincide with the opening of its newmulti-level short-term car park; however, this is not reflected in the price monitoring data asprices increased post-30 June 2012. For example, Adelaide Airport has increased the pricefor 1 hour parking from $4.00 to $6.00 and the price for two hours parking from $8.00 to$12.00.1184.2.3 Major airport investmentsAeronautical services and facilitiesAdelaide Airport undertook and completed a number of investment projects in its aeronauticalservices and facilities in 2011-12, including:• Stage 1 of the Landside Infrastructure Project, which provided an additional multi-lane roadto and from T1 in preparation for a new drop-off/pick-up zone. This was completed inAugust 2011.• A baggage handling system upgrade, which included installing new automatic baggagereaders to integrate with Qantas’ next-generation check-in facilities. This was completed inJuly 2011.• Installation of equipment for international transit screening to comply with new liquids,aerosols and gels screening procedures. This was completed in April 2012.• Building modifications to incorporate new body scanning equipment for both internationaldepartures and international transit screening. This was completed in April 2012.• General refitting and refurbishment of T1 retail shops and playroom facilities on the level 2concourse. This was completed in June 2011.• Stage 2 and 3 of the Landside Infrastructure Project was underway in 2011-12 andinvolved the construction of a 2000-vehicle car park and of a drop-off/pick-up zone.Planned investments in aeronautical services and facilities at Adelaide Airport beyond 2011-12include:118Adelaide Airport, Multi-Level Undercover, viewed on 8 February 2013 at; http://www.adelaideairport.com.au/air-travel/to-and-from/parking.
  • 133. Adelaide Airport monitoring results Airport Monitoring Report 2011-12108• A Southern Pier expansion, with design works to be commenced in January 2013, withplans for this to be completed during 2015-16.• Expansion of T1 and the T1 apron to be commenced in April 2013, with plans for this to becompleted during 2015-16.Car parking and landside access servicesInvestments in car parking and landside access services undertaken at Adelaide Airport in2011-12 include:• Stages 1, 2 and 3 of the Landside Infrastructure Project, as described above. This projectincludes construction of a new 2000 vehicle car park.Adelaide Airport has no major plans for investments in car parking and landside accessservices beyond 2011-12, with the exception of the completion of the Landside InfrastructureProject noted above.4.3 Aeronautical prices monitoring and financialperformance resultsThis section presents prices monitoring and financial reporting results for aeronautical servicesand for total airport services, including activity levels (section 4.3.1); prices (section 4.3.2);revenues, costs and profits (section 4.3.3); revenues, costs and profits (section 4.3.4);government mandated security services (section 4.3.5); assets (section 4.3.6); and rates ofreturn on tangible non-current assets (section 4.3.7).
  • 134. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1094.3.1 ActivityChart 4.3.1: Adelaide Airport—volume of passengers, tonnes landed and aircraftmovements, 2001-02 to 2011-12119Key observations from chart 4.3.1 include:• The number of passengers, tonnes landed and aircraft movements all decreased atAdelaide Airport in 2011-12.• Passenger numbers decreased by 4.0 per cent from around 7.4 million in 2010-11 to7.1 million in 2011-12. Passenger numbers had previously increased in every year since2001-02. Passenger numbers have increased by 69.8 per cent since 2001-02. The largestannual increase in passenger throughput occurred in 2003-04, when passenger numbersincreased by 12.0 per cent compared to the previous year.• During 2011-12, international passenger numbers (including transit passengers) increasedby 11.5 per cent to 0.7 million. This rise is partly explained by the introduction of newinternational services to Adelaide Airport. Domestic passenger numbers (includingdomestic on-carriage passengers) decreased during 2011-12 by 5.4 per cent to 6.4 million.Reasons for this include subdued economic conditions, the suspension of Tiger Airways bythe Civil Aviation Safety Authority and the subsequent decision by this airline not to resumeservices to Adelaide until after the end of the financial year, and the Qantas grounding andassociated industrial relations issues.120• Tonnes landed at Adelaide Airport decreased by 2.4 per cent from 2.3 million tonnes in2010-11 to around 2.2 million tonnes in 2011-12. Tonnes landed at Adelaide Airport haveincreased in most periods since 2001-02, and have increased by 34.9 per cent since2001-02. The largest annual increase in tonnes landed occurred in 2004-05, when itincreased by 10.7 per cent compared to the previous year.• Aircraft movements decreased by 5.4 per cent from 99 890 movements in 2010-11 to94 482 movements in 2011-12, the largest annual decrease over the 11 years since 2001-119Data in chart 4.3.1 is not comparable to chart 4.2.1 as international transit passengers have been included asinternational passengers and domestic on-carriage passengers have been included as domestic passengers.120Adelaide Airport (2012), Adelaide Airport Annual Report Editorial 2011-12,http://www.adelaideairport.com.au/corporate-and-community/adelaide-airport-limited01530456075901051200100020003000400050006000700080002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Numberofaircraftmovements(thousand)DomesticPassengers International Passengers Tonnes landed Aircraft movements(RHS)Numberofpassengers/tonneslanded
  • 135. Adelaide Airport monitoring results Airport Monitoring Report 2011-1211002. Aircraft movements in 2011-12 were 1.8 per cent lower than in 2001-02, when theywere 96 205. The number of aircraft movements at Adelaide Airport reached a peak of103 185 movements in 2007-08.4.3.2 PricesTable 4.3.1 presents the average aeronautical charges at Adelaide Airport from 2007-08 to2011-12, as well as the indexed average list prices for that period (with 2007-08 as the baseyear).121121Where a list price changed during the financial year, the average of that charge has been reported in the table.
  • 136. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results111Table 4.3.1: Adelaide Airport—schedule of aeronautical charges and indexed average list prices (including GST), 2007-08 to 2011-12Average list prices($)Indexed average list prices(2007-08 base year = 100)2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12Aircraft-related chargesInternational passenger air transport aircraft (perpassenger)11.86 11.80 12.10 12.45 12.73 100.0 99.5 102.0 105.0 107.4International passenger air transport aircraft diversionsfrom other airports (per MTOW)6.32 9.45 9.69 9.97 10.19 100.0 149.6 153.4 157.8 161.3Domestic passenger air transport aircraft weighingmore than 20 000 kg MTOW (per passenger)4.53 4.25 4.36 4.49 4.59 100.0 93.9 96.3 99.2 101.4Domestic passenger air transport aircraft weighingmore than 20 000 kg MTOW (per MTOW)14.82 14.00 14.35 14.76 15.09 100.0 94.5 96.8 99.6 101.8Domestic passenger air transport aircraft weighingmore than 20 000 kg MTOW diversions from otherairports (per MTOW)6.41 7.00 7.18 7.39 7.56 100.0 109.2 112.0 115.3 117.9Domestic passenger air transport aircraft weighing lessthan 20 000 kg MTOW (per MTOW)(a)6.51 7.12 7.89 8.12 8.30 100.0 109.4 121.2 124.7 127.5Domestic passenger air transport aircraft weighing lessthan 20 000 kg MTOW (per passenger)(a)(b)NA 2.50 2.56 2.63 2.69 NA 100.0 102.4 105.2 107.6Freight aircraft and aircraft not operating air transportservices (per MTOW)(a)6.36 6.41 6.57 6.76 6.91 100.0 100.7 103.2 106.2 108.6Rotary wing and unpowered aircraft (per MTOW)(a) 3.17 3.21 3.29 3.38 3.46 100.0 101.3 103.9 106.7 109.2Parking charge for aircraft parked longer than 2 hoursin a designated general aviation parking area (per dayor part thereof)14.15 14.22 14.58 15.00 15.34 100.0 100.5 103.1 106.0 108.4
  • 137. Adelaide Airport monitoring results Airport Monitoring Report 2011-12112Average list prices($)Indexed average list prices(2007-08 base year = 100)2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12Passenger-related chargesPassenger facilitation charge–international passengers(per passenger)8.63 9.01 9.33 8.50 7.02 100.0 104.4 108.1 98.5 81.3Passenger facilitation charge–domestic passengers(per passenger)6.23 6.51 6.74 6.15 5.12 100.0 104.4 108.1 98.7 82.1Passenger facilitation charge–regional passengers (perpassenger)1.46 1.52 1.56 1.44 1.21 100.0 104.1 107.1 98.9 83.4Government mandated security chargesSecurity charge for domestic and regional passengers–including passenger security screening and checkedbag screening (per passenger)(c)3.35 3.39 3.69 3.34 3.12 100.0 101.3 110.2 99.7 93.1Security charge for international passengers–includingpassenger security screening and checked bagscreening (per passenger)(d)NA 3.69 4.36 5.71 6.13 NA 100.0 118.4 155.0 166.3Security screening of international transit passengers(per passenger)4.40 4.74 1.86 1.25 1.25 100.0 107.6 42.3 28.4 28.4Minimum charges (e)Minimum charge applicable to domestic passenger airtransport aircraft weighing less than 20 000 kg MTOW(incl insurance charge)37.96 38.16 39.11 40.24 41.15 100.00 100.5 103.0 106.0 108.4Minimum charge applicable to freight aircraft andaircraft not operating air transport services (inclinsurance charge)37.96 38.16 39.11 40.24 41.15 100.00 100.5 103.0 106.0 108.4Minimum charge applicable to rotary wing andunpowered aircraft (incl insurance charge)18.98 19.08 19.56 20.12 20.57 100.00 100.5 103.0 106.0 108.4
  • 138. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results113Notes: NA Not applicable.(a) Minimum charge applies.(b) Adelaide Airport advised that this was not a new charge, but that an airline elected to be billed on a per passenger basis for the first time in 2008.(c) In reports prior to 2009-10, passenger security screening and checked bag screening for domestic and regional passengers were reported separately. For the 2009-10,2010-11 and 2011-12 reports, these charges have been combined to be reported as a single charge.(d) New charge introduced in July 2008 due to changes in government regulation.(e) Minimum charge is the minimum amount charged for landing aircraft in relation to landing charges. It does not include terminal and security charges.
  • 139. Adelaide Airport monitoring results Airport Monitoring Report 2011-12114Key observations from table 4.3.1 include:• List prices for aircraft-related services and facilities, which accounted for 43.0 per cent ofAdelaide Airport’s total aeronautical revenue, all increased in 2011-12. At the same time, alllist prices for passenger-related services and facilities, which accounted for 40.8 per cent ofAdelaide Airport’s total aeronautical revenue, decreased. Minimum charges all increased in2011-12.− During the five year period since 2007-08, Adelaide Airport had in place formalfive-year pricing agreements with airlines. Under this agreement, prices foraircraft-related services and facilities are determined using a cost based buildingblock methodology and adjusted by CPI. This agreement expired in 2012.− Charges for aircraft-related services and facilities all increased by between2.2 per cent and 2.4 per cent in 2011-12. Since 2007-08, the charge forinternational passenger air transport aircraft diversions from other airports (perMTOW) has increased by 61.3 per cent, from $6.32 in 2007-08 to $10.19 in2011-12. Adelaide Airport noted that a large proportion of this increase related to are-alignment of diversion charges with international passenger charges as, overtime, these charges had become relatively low by comparison.− In relation to passenger-related services and facilities, passenger facilitationcharges (PFCs) are covered by a 15-year pricing agreement to recover the cost ofcapital. The prices are reviewed every five years during the term of the agreementto allow for adjustments for any over- or under-recovery arising from actual trafficvolumes being different from forecast volumes. Adelaide Airport advised that themost recent price review resulted in a decrease in PFCs in February 2011 ofapproximately 25 per cent.− PFCs all decreased by between 15.7 per cent and 17.4 per cent in 2011-12, whichAdelaide Airport noted was partly due to a decrease in PFCs of approximately25 per cent in February 2011, followed by slight increases in PFCs during 2011-12.Between 2007-08 and 2010-11, these charges had decreased by a total ofbetween 1.1 per cent and 1.5 per cent. As noted above, changes throughout thefive year period since 2007-08 were in accordance with the mechanism set out inthe 15-year pricing agreement with airlines.• Government mandated security charges, which accounted for 16.2 per cent of AdelaideAirport’s total aeronautical revenue, increased for international passengers but decreasedfor domestic and regional passengers in 2011-12.− The government mandated security charge for international passengers (perpassenger) increased by 7.3 per cent from $5.71 in 2010-11 to $6.13 in 2011-12.The security charge for international passengers (per passenger) has increased by66.3 per cent since 2008-09.− The security charge for domestic passengers (per passenger) decreased by6.5 per cent in 2011-12, from $3.34 in 2010-11 to $3.12 in 2011-12. The securitycharge for domestic passengers (per passenger) has decreased by 6.9 per centsince 2007-08.− The security charge for screening international transit passengers (per passenger)was unchanged from 2010-11 at $1.25, though this charge has decreased by71.6 per cent since 2007-08.• All of the minimum applicable charges increased by around 2.3 per cent in 2011-12,compared to increases of around 2.5 per cent in 2009-10 and 2.9 per cent in 2010-11.
  • 140. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1154.3.3 Revenues, costs and profits for aeronautical and total airportservicesAs noted, the ACCC required airport operators to provide additional information relating to theaeronautical asset base under the ‘line in the sand’ (LIS) approach for the first time in 2007-08.Under this approach, the value of an airport’s aeronautical asset base for monitoring purposesis the value of tangible non-current aeronautical assets reported to the ACCC as at 30 June2005, plus new investments, less depreciation and disposals. This chapter separately reportsLIS measures for Adelaide Airport where applicable. The starting line in the sand asset basefigures for Adelaide Airport are detailed in the appendices.Table 4.3.2 outlines the revenues, operating expenses and operating margins for aeronauticalservices and the total airport from 2001-02 to 2011-12, while table 4.3.3 outlines the revenues,operating expenses and operating margins for aeronautical services under the LIS approachfrom 2007-08 to 2011-12.
  • 141. Adelaide Airport monitoring results Airport Monitoring Report 2011-12116Table 4.3.2: Adelaide Airport—revenues, operating expenses and operating margins for aeronautical services and total airport services,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue ($million) Aeronautical 11.3 20.2 26.4 29.9 46.2 69.4 77.3 81.2 83.8 86.1 78.1Total airport 39.6 47.1 56.7 75.1 88.6 123.5 149.4 128.6 149.3 160.7 145.3Operating expenses($million)Aeronautical 14.6 16.4 17.0 18.5 33.6 39.5 43.9 47.3 46.6 46.8 46.0Total airport 27.5 29.3 31.3 31.6 52.0 61.1 67.5 71.1 71.0 71.4 76.0Operating margin($million)Aeronautical (3.2) 3.8 9.4 11.4 12.6 29.9 33.4 33.9 37.3 39.3 32.1Total airport 12.1 17.8 25.4 43.5 36.6 62.4 81.9 57.5 78.3 89.3 69.3Operating margin as a% of revenueAeronautical (28.6) 18.8 35.7 38.2 27.3 43.0 43.2 41.7 44.5 45.6 41.1Total airport 30.5 37.8 44.8 57.9 41.3 50.5 54.8 44.7 52.5 55.6 47.7Notes: Care should be taken when making comparisons across periods. For example, from 1 July 2002 until 1 July 2007, aeronautical services were defined under direction 27. In 2007-08,some amendments were made to the definition of aeronautical services and these were defined under direction 29. Also, as previously noted, revenues, costs and profits from DTLs areexcluded from aeronautical services (but are included total airport). Importantly, DTLs ceased at Adelaide Airport in February 2006.Table 4.3.3: Adelaide Airport—revenues, operating expenses and operating margins for aeronautical services under the line in the sandapproach, 2007-08 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue ($million) Aeronauticalunder the LISNA NA NA NA NA NA 77.3 81.2 83.8 86.1 78.1Operating expenses ($million) Aeronauticalunder the LISNA NA NA NA NA NA 42.6 45.9 45.7 46.3 45.5Operating margin ($million) Aeronauticalunder the LISNA NA NA NA NA NA 34.7 35.3 38.1 39.8 32.7Operating margin as % ofrevenueAeronauticalunder the LISNA NA NA NA NA NA 44.9 43.5 45.5 46.2 41.8
  • 142. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results117Key observations from table 4.3.2 include:• Total aeronautical revenue, operating expenses and operating margin for Adelaide Airportall decreased in 2011-12.• Revenue from aeronautical services decreased by $8.0 million (9.3 per cent) in 2011-12,from $86.1 million in 2010-11. This was the only instance of a decrease in aeronauticalrevenue since 2001-02. This change is likely to be due to a lower number of passengerstravelling through Adelaide Airport during the year, partly caused by subdued economicconditions, Tiger Airways ceasing operations in July 2011 and not recommencing in thefinancial year, and the Qantas grounding and associated industrial relations issues.− Since 2001-02, aeronautical revenue has increased by 589.1 per cent. As noted,these figures are impacted by the cessation of DTLs at Adelaide Airport in 2005-06.Since 2006-07, aeronautical revenue has increased by 12.6 per cent, and by anaverage of 2.4 per cent per year. The largest increase in aeronautical revenuesince 2006-07 occurred in 2007-08, when revenue increased by almost $8 million(11.5 per cent).• Aeronautical operating expenses decreased by $814 000 (1.7 per cent) in 2011-12, from$46.8 million in 2010-11. This was the largest decrease in aeronautical operating expensessince 2001-02.− Since 2001-02, aeronautical operating expenses have increased by 215.4 per cent.However, since 2006-07, aeronautical operating expenses have increased by16.4 per cent, and by an average of 3.1 per cent per year. The largest increase inaeronautical operating expenses since 2006-07 occurred in 2007-08, whenoperating expenses increased by $4.4 million (11.1 per cent).• As a result of revenue from aeronautical services decreasing at a faster rate than operatingexpenses, aeronautical operating margin decreased by $7.2 million (18.3 per cent) in2011-12 to $32.1 million.− Since 2002-03, Adelaide Airport’s operating margin from aeronautical services hasincreased by $28.3 million (748.5 per cent). However, since 2006-07, aeronauticaloperating margin has increased by 7.6 per cent, and by an annual average of1.5 per cent per annum. The largest increase in aeronautical operating marginsince 2006-07 occurred in 2007-08, when aeronautical operating margin increasedby $3.6 million (11.9 per cent).• Operating margin as a percentage of aeronautical revenue has ranged between41.1 per cent and 45.6 per cent since 2006-07. Operating margin as a percentage ofaeronautical revenue was 41.1 per cent in 2011-12, the lowest percentage since 2006-07.• Total airport revenue decreased by 9.6 per cent from $160.7 million in 2010-11 to$145.3 million in 2011-12, due to aeronautical revenue decreasing by 9.3 per cent andnon-aeronautical revenue decreasing by 4.0 per cent.− Since 2001-02, total airport revenue has increased by 290.5 per cent. However,since 2006-07, total airport revenue has increased by 17.6 per cent. The largestincrease in total airport revenue since 2006-07 occurred in 2007-08, when totalairport revenue increased by $25.9 million (20.9 per cent).• Total airport operating expenses increased for the second consecutive year in 2011-12,from $71.4 million in 2010-11 to $76.0 million (6.5 per cent). This was due to an increase innon-aeronautical operating expenses of 22.1 per cent. The increase in non-aeronauticaloperating expenses is mostly attributable to the rise in depreciation expenses on tangibleassets.
  • 143. Adelaide Airport monitoring results Airport Monitoring Report 2011-12118− Since 2001-02, total airport operating expenses have increased by 175.8 per cent.However, since 2006-07, total airport operating expenses have increased by24.4 per cent. The largest increase in total airport operating expenses since2006-07 occurred in 2007-08, when total airport operating expenses increased by$6.4 million (10.5 per cent).• As result of total airport revenue decreasing while total airport operating expensesincreased, total airport operating margin decreased by 22.4 per cent from $89.3 million in2010-11 to $69.3 million in 2011-12.Key observations from table 4.3.3 include:• Under the LIS approach, Adelaide Airport’s aeronautical revenue was unchanged from thenon-LIS value.• Adelaide Airport’s aeronautical operating expenses were 1.1 per cent lower under the LISapproach in 2011-12, at $45.5 million, because of lower depreciation expense. Since2007-08, aeronautical operating expenses have been between 1.0 per cent and3.1 per cent lower under the LIS approach.• As a result of lower aeronautical operating expenses under the LIS approach, aeronauticaloperating margin was 1.6 per cent higher in 2011-12 under the LIS approach, at$32.7 million. Since 2007-08, aeronautical operating margin has been between 1.2 per centand 4.3 per cent higher under the LIS approach.Chart 4.3.2: Adelaide Airport—aeronautical services and non-aeronautical servicesshare of total airport revenues, 2001-02 to 2011-12Key observations from chart 4.3.2 include:• In 2011-12, aeronautical revenue as a proportion of total airport revenue was largelyunchanged, accounting for 53.8 per cent of total airport revenue, compared with53.6 per cent in 2010-11. Aeronautical revenue as a proportion of total airport revenuereached a peak of 63.1 per cent in 2008-09.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—aeronautical Revenue—non-aeronautical
  • 144. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results119− Notably, changes in this measure since 2001-02 were partly attributable tochanges in non-aeronautical revenue due to changes in the fair value ofnon-aeronautical investment property.− Excluding changes in the fair value of non-aeronautical investment property,aeronautical revenue as a proportion of total airport revenue fell marginally to55.4 per cent in 2011-12, compared to 56.7 per cent in 2010-11. Between 2006-07and 2011-12, aeronautical revenue as a proportion of total airport revenue,excluding changes in the fair value of non-aeronautical investment property, hasranged from 55.4 per cent to 59.9 per cent.4.3.4 Average revenues, costs and profits for aeronautical servicesChart 4.3.3: Adelaide Airport—revenues, operating expenses and operating marginsfor aeronautical services on a per passenger basis, 2001-02 to 2011-12Key observations from chart 4.3.3 include:• Aeronautical revenue and operating margin on a per passenger basis decreased atAdelaide Airport in 2011-12, while operating expenses per passenger increased.• Aeronautical revenue per passenger decreased for the second consecutive year, from$11.64 in 2010-11 to $11.01 in 2011-12 (-5.5 per cent). This change was due toaeronautical revenue decreasing at a faster rate than passenger numbers during theperiod, falling 9.3 per cent and 4.0 per cent respectively. The decrease in revenue andpassengers may be partly due to subdued economic conditions, Tiger Airways ceasingoperations in July 2011 and not recommencing in the financial year, and the Qantasgrounding and associated industrial relations issues.− Since 2001-02, aeronautical revenue per passenger has increased by305.9 per cent. As noted, these figures are impacted by monitoring data not beingavailable for the domestic terminal operations of Qantas prior to February 2006.Since 2006-07, aeronautical revenue per passenger has increased to a peak of$11.72 per passenger in 2009-10, before decreasing back to 2006-07 levels in2011-12.-$2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerRevenue Expenses Margin
  • 145. Adelaide Airport monitoring results Airport Monitoring Report 2011-12120• Aeronautical operating expenses per passenger increased by 2.4 per cent in 2011-12, from$6.33 in 2010-11 to $6.48 in 2011-12. This change was due to aeronautical operatingexpenses decreasing at a slower rate than passenger numbers during the period, falling1.7 per cent and 4.0 per cent respectively.− Since 2001-02, aeronautical operating expenses per passenger have increased by85.8 per cent. However, since 2006-07, aeronautical operating expenses perpassenger have increased by 3.3 per cent, and by an annual average of 0.6per cent. The largest increase in aeronautical operating expenses per passengersince 2006-07 occurred in 2008-09, when operating expenses per passengerincreased by $0.35 (5.3 per cent).• As a result of aeronautical revenue per passenger decreasing and operating expenses perpassenger increasing during the period, operating margin per passenger decreased by14.8 per cent from $5.31 in 2010-11 to $4.53 in 2011-12.− Since 2002-03, aeronautical operating margin per passenger has increased by430.0 per cent. However, since 2006-07, aeronautical operating margin perpassenger has decreased by 4.5 per cent, and by an annual average of -0.9per cent per annum. Aeronautical operating margin per passenger peaked at $5.31in 2010-11.Chart 4.3.4: Adelaide Airport—revenues, operating expenses and operating marginsfor aeronautical services on a per passenger basis under line in the sandapproach, 2007-08 to 2011-12Key observations from chart 4.3.4 include:• In 2011-12, aeronautical operating expenses per passenger were 1.1 per cent lower underthe LIS approach at $6.41 per passenger, compared to $6.48 under the non-LIS approach,because of lower depreciation expense.• As a result of lower operating expenses under the LIS approach, the aeronautical operatingmargin per passenger was 1.6 per cent higher in 2011-12, at $4.60 under the LISapproach, compared to $4.53 under the non-LIS approach.$0.00$2.00$4.00$6.00$8.00$10.00$12.002007–08 2008–09 2009–10 2010–11 2011–12PerpassengerRevenue under the LIS Expensesunderthe LIS Margin under the LIS
  • 146. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1214.3.5 Government mandated security servicesGovernment mandated security charges are directly related to the government mandatedsecurity levels (see chapter 1). Adelaide Airport commented that security charges represent apass-through of costs to airlines and, therefore, increases or decreases in revenues orexpenses do not have any impact on the long-term profitability of the airport.Table 4.3.4 outlines the revenues, operating expenses and operating margins for governmentmandated security services and aeronautical services from 2001-02 to 2011-12.
  • 147. Adelaide Airport monitoring results Airport Monitoring Report 2011-12122Table 4.3.4: Adelaide Airport—revenues, operating expenses and operating margins from government mandated security services andaeronautical services, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue($million)Security services 2.1 2.3 2.9 3.2 6.3 9.7 10.7 10.9 12.1 11.5 11.1Total aeronautical 11.3 20.2 26.4 29.9 46.2 69.4 77.3 81.2 83.8 86.1 78.1Operating expenses($million)Security services 2.1 2.3 2.5 2.9 7.4 9.2 9.2 11.7 10.9 11.7 10.9Total aeronautical 14.6 16.4 17.0 18.5 33.6 39.5 43.9 47.3 46.6 46.8 46.0Operating margin($million)Security services 0.0 0.1 0.4 0.3 (1.2) 0.5 1.5 (0.9) 1.2 (0.1) 0.2Total aeronautical (3.2) 3.8 9.4 11.4 12.6 29.9 33.4 33.9 37.3 39.3 32.1Revenue perpassenger($)Security services 0.50 0.53 0.59 0.60 1.08 1.53 1.58 1.57 1.70 1.56 1.57Total aeronautical 2.71 4.55 5.31 5.52 7.95 11.01 11.41 11.70 11.72 11.64 11.01Operating expensesper passenger($)Security services 0.50 0.52 0.50 0.54 1.28 1.45 1.36 1.69 1.53 1.58 1.54Total aeronautical 3.49 3.70 3.42 3.41 5.78 6.27 6.48 6.82 6.51 6.33 6.48Operating marginper passenger($)Security services 0.00 0.01 0.09 0.06 (0.20) 0.08 0.22 (0.13) 0.17 (0.02) 0.03Total aeronautical (0.78) 0.85 1.90 2.11 2.17 4.74 4.93 4.88 5.21 5.31 4.53
  • 148. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results123Key observations from table 4.3.4 include:• Total security revenue decreased at Adelaide Airport for the second consecutive year in2011-12, while total security expenses also decreased.• Total security revenue decreased by 3.2 per cent from $11.5 million in 2010-11 to$11.1 million in 2011-12.− Since 2001-02, total security revenue has increased by 434.4 per cent. However,since 2006-07, total security revenue has increased by 15.4 per cent from$9.7 million (equivalent to an average of 2.9 per cent per annum). The largestincrease in total security revenue since 2006-07 occurred in 2009-10, when totalsecurity revenue increased by $1.3 million (11.7 per cent).• On a per passenger basis, security revenue was largely unchanged at $1.57 in 2011-12,compared with $1.56 in 2010-11.− Since 2001-02, security revenue per passenger has increased by 214.8 per cent.However, since 2006-07, security revenue per passenger has increased by2.4 per cent. The largest increase in security revenue per passenger since 2006-07occurred in 2009-10, when security revenue per passenger increased by $0.13(8.3 per cent).• Total security expenses decreased by 6.5 per cent from $11.7 million in 2010-11 to$10.9 million in 2011-12.− Since 2001-02, total security expenses have increased by 422.8 per cent.However, since 2006-07, total security expenses have increased by 19.0 per centfrom $9.2 million (equivalent to an average annual increase of 3.5 per cent perannum). The largest increase in total security expenses since 2006-07 occurred in2008-09, when total security expenses increased by $2.5 million (27.6 per cent).• Security expenses per passenger decreased by 2.6 per cent from $1.58 per passenger in2010-11 to $1.54 per passenger in 2011-12.− Since 2001-02, security expenses per passenger have increased by208.0 per cent. However, since 2006-07, security expenses per passenger haveincreased by 5.6 per cent. The largest increase in security expenses per passengersince 2006-07 occurred in 2008-09, when security expenses per passengerincreased by $0.34 (24.8 per cent).• Total security margin increased by $396 100 in 2011-12, from a negative margin of$148 000 in 2010-11 to a positive margin of $248 100 in 2011-12.− It should be noted that security revenue is set to recover the costs associated withthe provision of security services and does not affect the overall profitability of theairport.• Security margin per passenger increased by $0.05 in 2011-12, from a negative margin perpassenger of $0.02 in 2010-11 to a positive margin per passenger of $0.03 in 2011-12.
  • 149. Adelaide Airport monitoring results Airport Monitoring Report 2011-12124Chart 4.3.5: Adelaide Airport—government mandated security services share of totalaeronautical services revenue, 2001-02 to 2011-12Key observations from chart 4.3.5 include:• Security revenue as a proportion of total aeronautical revenue increased by 0.9 percentagepoints in 2011-12, from 13.4 per cent in 2010-11 to 14.3 per cent. This change was due toaeronautical revenue decreasing at a faster rate than security revenue during the period,falling 9.3 per cent and 3.2 per cent respectively.• Security revenue as a proportion of aeronautical revenue reached a peak of 18.4 per centin 2001-02, and in all subsequent periods security revenue has ranged between10.8 per cent and 14.5 per cent of total aeronautical revenue.Chart 4.3.6: Adelaide Airport—aeronautical services revenue, operating expensesand operating margin excluding government mandated security serviceson a per passenger basis, 2001-02 to 2011-1201020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—airport charges Revenue—securitycharges-$2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerRevenue Expenses Margin
  • 150. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results125Key observations from chart 4.3.6 include:• Adelaide Airport’s aeronautical revenue and operating margin per passenger (excludingsecurity) decreased in 2011-12, while operating expenses increased.• Adelaide Airport’s aeronautical revenue per passenger was 14.3 per cent lower whenexcluding security in 2011-12, at $9.44 per passenger, compared to $11.01 (includingsecurity).• Adelaide Airport’s aeronautical operating expenses per passenger was 23.7 per cent lowerwhen excluding security in 2011-12, at $4.94 per passenger, compared to $6.48 (includingsecurity).• Adelaide Airport’s aeronautical operating margin per passenger was 0.8 per cent lowerwhen excluding security in 2011-12, at $4.49 per passenger, compared to $4.53 (includingsecurity).4.3.6 Assets for aeronautical and total airport servicesTable 4.3.5 outlines Adelaide Airport’s non-current assets for aeronautical services and thetotal airport from 2001-02 to 2011-12.
  • 151. Adelaide Airport monitoring results Airport Monitoring Report 2011-12126Table 4.3.5: Adelaide Airport—tangible non-current assets for aeronautical services and total airport services, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Investmentproperty($million)Aeronautical 0.0 0.0 0.0 3.7 1.7 0.0 0.0 0.0 0.0 0.0 0.0Total airport 0.0 0.0 0.0 148.5 158.2 166.4 184.2 183.9 195.5 209.0 217.1Land($million)Aeronautical 74.5 74.0 73.3 125.5 124.1 122.8 125.8 124.3 121.8 121.3 119.8Total airport 116.1 114.9 113.8 125.5 124.1 122.8 125.8 124.3 121.8 121.3 119.9Property, plant andequipment($million)Aeronautical 54.9 57.1 102.3 253.2 264.8 253.5 266.5 255.3 247.7 274.5 323.8Total airport 96.3 96.6 149.7 288.8 317.6 310.1 297.7 286.5 275.6 303.1 358.1Intangibles($million)Aeronautical 126.2 128.6 118.2 179.4 179.4 179.4 179.4 179.4 179.4 179.4 179.4Total airport 207.2 207.4 203.6 179.5 179.4 179.4 179.4 179.4 179.4 179.4 179.4Other tangiblenon-current assets($millon)Aeronautical 0.6 0.4 0.0 28.9 9.4 13.1 4.8 4.4 3.9 3.6 2.2Total airport 2.0 0.7 0.0 40.9 12.4 19.5 9.4 7.9 6.1 5.7 3.4Total tangible non-current assets($million)Aeronautical 130.0 131.6 175.6 411.3 400.0 389.4 397.1 384.1 373.3 399.3 445.9Total airport 214.5 212.1 263.4 603.7 612.3 618.9 617.1 602.6 599.0 639.0 698.4Total non-currentassets($million)Aeronautical 256.1 260.1 293.8 590.7 579.4 568.8 576.5 563.5 552.7 578.7 625.3Total airport 421.7 419.5 467.1 783.2 791.7 798.3 796.5 782.0 778.5 818.4 877.8
  • 152. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results127Table 4.3.6: Adelaide Airport—tangible non-current assets for aeronautical services under the line in the sand approach,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Investmentproperty($million)Aeronautical underthe LISNA NA NA NA NA NA 0.0 0.0 0.0 0.0 0.0Land($million)Aeronautical underthe LISNA NA NA NA NA NA 82.9 81.9 81.0 80.1 79.2Property, plant andequipment($million)Aeronautical underthe LISNA NA NA NA NA NA 246.4 236.0 226.9 253.6 303.6Intangibles($million)Aeronautical underthe LISNA NA NA NA NA NA 179.4 179.4 179.4 179.4 179.4Other tangiblenon-current assets($millon)Aeronautical underthe LISNA NA NA NA NA NA 4.8 4.4 3.9 3.6 2.2Total tangible non-current assets($million)Aeronautical underthe LISNA NA NA NA NA NA 334.1 322.4 311.8 337.2 385.1Total non-currentassets($million)Aeronautical underthe LISNA NA NA NA NA NA 513.5 501.8 491.2 516.7 564.5
  • 153. Adelaide Airport monitoring results Airport Monitoring Report 2011-12128Key observations from table 4.3.5 include:• Total aeronautical non-current assets at Adelaide Airport increased by 8.0 per cent, from$578.7 million in 2010-11 to $625.3 million in 2011-12. When intangibles (goodwill) areremoved, the total value of aeronautical tangible non-current assets increased by11.7 per cent, from $399.3 million in 2010-11 to $445.9 million in 2011-12.− The increase in 2011-12 was partly attributable to an increase in property, plantand equipment of 18.0 per cent from $274.5 million in 2010-11 to $323.8 million in2011-12. This is discussed in further detail in observations for chart 4.3.7.− The value of land and other non-current assets both decreased in 2011-12compared with the previous year. Land decreased by 1.2 per cent from $121.3million in 2010-11 to $120.0 million in 2011-12, while other non-current assetsdecreased by 37.8 per cent from $3.6 million in 2010-11 to $2.2 million in 2011-12.Intangibles (goodwill) remained unchanged at $179.4 million.− Since 2001-02, total aeronautical tangible non-current assets have increased by144.1 per cent. Notably, Adelaide Airport constructed its new multi-user terminal in2005-06. Adelaide Airport noted that, since then, the asset value of its multi-userterminal has decreased due to depreciation. Since 2005-06, total aeronauticalnon-current assets have increased by $45.9 million (7.9 per cent).• Total airport non-current assets increased by 7.3 per cent to $877.8 million in 2011-12.When removing intangibles (goodwill), the value of total airport tangible non-current assetsat Adelaide Airport increased by 9.3 per cent, from $639.0 million in 2010-11 to$698.4 million in 2011-12.− The increase in 2011-12 was partly attributable to an increase in the value ofproperty, plant and equipment of 18.1 per cent from $303.1 million in 2010-11 to$358.1 million in 2011-12. The value of investment property increased by3.9 per cent, from $209.0 million in 2010-11 to $217.1 million in 2011-12.− Partly offsetting these increases was a decrease in the value of land by1.2 per cent from $121.3 million in 2010-11 to $119.9 million in 2011-12, and othernon-current assets, which decreased by 41.0 per cent from $5.7 million in 2010-11to $3.4 million in 2011-12. Intangibles (goodwill) remained unchanged at$179.4 million.− Since 2001-02, total airport tangible non-current assets have increased by108.2 per cent. Since 2005-06, when Adelaide Airport constructed its newmulti-user terminal, total airport non-current assets have increased by $86.1 million(10.9 per cent).Key observations from table 4.3.6 include:• Under the LIS approach, aeronautical non-current assets were 9.7 per cent lower in2011-12, at $564.5 million when compared to non-LIS aeronautical non-current assets. Thevalue of land under the LIS approach was 33.9 per cent lower, at $79.2 million. The valueof property, plant and equipment was 6.6 per cent lower under the LIS approach, at$303.6 million. The value of other non-current assets and intangibles were unchangedunder the LIS approach.
  • 154. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results129Chart 4.3.7: Adelaide Airport—additions as a percentage of tangible non-currentassets for aeronautical and total airport services, 2001-02 to 2011-12Key observations from chart 4.3.7 include:• In 2011-12, additions to aeronautical tangible non-current assets of $59.9 million weremade to property, plant and equipment—including to land improvement ($279 000), plantand machinery ($1.6 million) and work in progress associated with the LandsideInfrastructure Project ($58.0 million). This was equivalent to 13.4 per cent of total tangibleaeronautical non-current assets ($445.9 million) in 2011-12.− Adelaide Airport has reported the full cost of the Landside Infrastructure Project asaeronautical investment. This project includes construction of a new 2000 vehiclecar park. Car parking facilities are not considered aeronautical assets under Part 7of the Airports Regulations 1997. Adelaide Airport has not provided separateconstruction costs for the car park which are, as a consequence, included withother additions to aeronautical assets for 2011-12.• In 2011-12, additions to total airport tangible non-current assets of $74.4 million were madeto property, plant and equipment; including to land improvement ($1.7 million), plant andmachinery ($3.9 million) and work in progress ($64.7 million), and $4.0 million toinvestment property. This was equivalent to 10.7 per cent of total airport tangiblenon-current assets ($698.4 million) in 2011-12.− Adelaide Airport undertook significant additions to property, plant and equipmentbetween 2003-04 and 2004-05, related to the construction of the multi-userterminal during this period. Between 2006-07 and 2009-10, additions as apercentage of tangible aeronautical non-current assets were significantly lower,and ranged from 0.4 per cent and 1.2 per cent. Since 2009-10, Adelaide Airporthas begun to increase its additions to property, plant and equipment.0%5%10%15%20%25%30%35%40%2001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentAeronauticalservices Total airport
  • 155. Adelaide Airport monitoring results Airport Monitoring Report 2011-121304.3.7 Rates of return on tangible non-current assetsChart 4.3.8: Adelaide Airport—rate of return on tangible non-current assets foraeronautical services and total airport services, 2001-02 to 2011-12Key observations from chart 4.3.8 include:• Earnings before interest, tax and amortisation (EBITA) on average tangible non-currentassets for aeronautical services and the total airport decreased in 2011-12.• EBITA on average tangible non-current assets for aeronautical services decreased from10.2 per cent in 2010-11 to 7.6 per cent in 2011-12 as a result of an increase in the valueof tangible aeronautical non-current assets (11.7 per cent) and a decrease in EBITA(-18.3 per cent).− Between 2002-03 and 2005-06, the EBITA on average tangible non-current assetsfor aeronautical services was 4.0 per cent on average, which is significantly lowerthan the EBITA on average tangible non-current assets of 8.7 per cent on averagesince 2006-07.− Adelaide Airport’s EBITA on average tangible non-current assets for aeronauticalservices increased by 4.5 percentage points in 2006-07 compared to the previousyear. This change was due to an increase in EBITA of 181.2 per cent in 2006-07,as a result of monitoring data from the domestic terminal operations of Qantasbeing included in the monitoring program from this period.− Adelaide Airport noted that a lowering of the value of aeronautical assets since2006-07 was owing to the cyclical nature of capital expenditure.• EBITA on average tangible non-current assets for total airport services decreased from14.4 per cent in 2010-11 to 10.4 per cent in 2011-12 as a result of an increase in the valueof total tangible airport non-current assets (9.3 per cent) and a decrease in EBITA(-22.4 per cent).− EBITA on average tangible non-current assets for total airport services has beenmore variable than for aeronautical services over the 11 years since 2011-12. Thisis partly attributable to the effects of changes in the fair value of non-aeronauticalinvestment property.-4-202468101214162001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentperannumAeronauticalservices Total airport
  • 156. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results131− When including changes in the fair value of non-aeronautical investment property,the differences between EBITA on average tangible non-current assets for totalairport services and aeronautical services have ranged between 0.8 percentagepoints and 4.8 percentage points since 2006-07. When excluding changes in thefair value of non-aeronautical investment property, the difference between EBITAon average tangible non-current assets for total airport services and aeronauticalservices have ranged between 1.7 percentage points and 2.8 percentage pointssince 2006-07.• As noted, where the return is not subject to the LIS approach, the return on assetsmeasure is influenced by the airport operator’s valuation of its assets recorded in itsfinancial accounts.Chart 4.3.9: Adelaide Airport—rate of return on tangible non-current assets foraeronautical services under the line in the sand approach and totalairport services, 2007-08 to 2011-12Key observations from chart 4.3.9 include:• EBITA on average tangible non-current assets for aeronautical services under the LISapproach was 1.4 percentage points higher than under the non-LIS approach in 2011-12,at 9.0 per cent and 7.6 per cent respectively. This difference was due to a higher EBITAand a lower asset base under the LIS approach.− The asset base is lower under the LIS approach due to the exclusion of the effectsof the upward revaluations in land and property and the removal of certain plantand equipment from the asset base.− Under the LIS approach, the value of land was 33.9 per cent lower in 2011-12 thanit was under the non-LIS approach, at $79.2 million and $119.9 million respectively.Under the LIS approach, the value of property, plant and equipment was6.2 per cent lower in 2011-12 than it was under the non-LIS approach, at$303.6 million and $323.8 million respectively.• EBITA on average tangible non-current assets for total airport services under the LISapproach was 1.1 percentage points higher than under the non-LIS approach in 2011-12,03691215182007–08 2008–09 2009–10 2010–11 2011–12PercentperannumAeronauticalservices Total airport
  • 157. Adelaide Airport monitoring results Airport Monitoring Report 2011-12132at 11.5 per cent and 10.4 per cent respectively. This difference was due to a higher EBITAand a lower asset base under the LIS approach.− The total airport figure includes both aeronautical and non-aeronautical services;however, only aeronautical services are impacted by the LIS approach. Therefore,differences between EBITA on average tangible non-current assets for total airportservices under the LIS approach and non-LIS approach are driven by the changesin aeronautical services under the LIS approach.4.4 Aeronautical services quality of servicemonitoring resultsIn this section, the quality of service monitoring results are presented for average ratings(section 4.4.1), international services (section 4.4.2) and domestic services (section 4.4.3).Other airport services are discussed in section 4.4.4.4.4.1 Average ratings for quality of serviceChart 4.4.1: Adelaide Airport—average quality of service ratings for international anddomestic terminal services, and other airport services,2007-08 to 2011-12Key observations from chart 4.4.1 include:• Adelaide Airport’s average quality of service rating for international terminal servicesdecreased in 2011-12, though were rated as good for the second consecutive year.• The average quality of service rating for domestic terminal services also decreased in2011-12, though retained the rating of satisfactory which it has had over the five yearssince 2007-08.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of international terminal Rating of domestic terminal Rating of other airport servicesExcellentGoodPoorVery poorSatisfactory
  • 158. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results133• Adelaide Airport’s average rating for other airport services has also been rated assatisfactory over the five years since 2007-08, increasing in 2011-12.Chart 4.4.2: Adelaide Airport—average quality of service ratings for availability andstandard of airport services, 2007-08 to 2011-12Key observations from chart 4.4.2 include:• The availability of airport services at Adelaide Airport decreased from good in 2010-11 tosatisfactory in 2011-12. With the exception of being rated as good in 2010-11, theavailability of airport services was rated as satisfactory over the five years since 2007-08.• Adelaide Airport’s average rating for the standard of airport services was rated assatisfactory over the five years since 2007-08, increasing in 2011-12.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of availability Rating of standardExcellentGoodPoorVery poorSatisfactory
  • 159. Adelaide Airport monitoring results Airport Monitoring Report 2011-121344.4.2 International servicesChart 4.4.3: Adelaide Airport—check-in (international services), 2007-08 to 2011-12Key observations from chart 4.4.3 include:• Airlines’ rating of the availability of international check-in desks decreased in 2011-12,though continued to be rated as satisfactory. With the exception of being rated as poor in2009-10, the availability of international check-in desks was consistently rated assatisfactory by airlines over the five years since 2007-08. Airlines’ rating of the standard ofinternational check-in desks decreased, from good in 2010-11 to satisfactory in 2011-12.− In commentary to the surveys, airlines noted ongoing issues with check-in deskavailability and allocation. Airlines also noted that these issues had been raisedwith Adelaide Airport through the Airport Operating Committee and that the airportis consulting with airlines to improve this service.• Further information on check-in services and facilities at Adelaide Airport is outlined insection 4.4.3 (domestic services).01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAirline surveys— rating of check-in availabilityAirline surveys— rating of check-in standardExcellentGoodPoorVery poorSatisfactory
  • 160. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results135Chart 4.4.4: Adelaide Airport—inbound government inspection (internationalservices), 2007-08 to 2011-12Key observations from chart 4.4.4 include:• Border agencies’ rating of the availability and standard of inbound Immigration facilitiesboth increased from good in 2010-11 to excellent in 2011-12. Both measures have beenrated as good or above over the five years since 2007-08.− In commentary to the surveys, border agencies noted that Adelaide Airport meetswith them on a weekly basis and that they have a good working relationship. Forexample, , and Adelaide Airport was heavily involved in the negotiations leading tothe Australian Customs and Border Protection Service (AC&BPS) installing newimmigration desks and additional Smartgate122equipment in 2011-12.• The number of arriving international passengers per inbound Immigration desk (duringpeak hour) was lower at 25.5 passengers in 2011-12, compared to 39.4 passengers in2010-11. This change was due to a lower number of international passengers arrivingduring peak hour, as well as an increase in the number of inbound Immigration desks from12 in 2010-11 to 13 in 2011-12. Separate international passenger number data was notavailable in 2007-08.− Adelaide Airport commented that there was a redevelopment of inbound passengerprocessing facilities in 2011-12. The airport also noted that, of the 13 inboundImmigration desks available, ten were manned by staff of the border agencies andthree were Smartgates.122Smartgates are an automated passport / border control system that allows eligible travellers the option of self-process through passport control. For further information see: http://www.customs.gov.au/smartgate/default.asp010203040506001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingBorder agencies survey— ratingof inbound Immigrationfacilities availabilityBorder agencies survey— ratingof inbound Immigrationfacilities standardNumber of arriving passengers per inbound Immigrationdesk (duringpeak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 161. Adelaide Airport monitoring results Airport Monitoring Report 2011-12136Chart 4.4.5: Adelaide Airport—outbound government inspection (internationalservices), 2007-08 to 2011-12Key observations from chart 4.4.5 include:• Border agencies’ rating of the availability of outbound Immigration facilities increased fromsatisfactory in 2010-11 to good in 2011-12, while the rating of the standard of outboundImmigration facilities remained unchanged at good for the fifth consecutive year.− In commentary to the surveys, border agencies noted that some circulation spacehad been returned to Adelaide Airport to allow for the future installation ofscreening equipment. Border agencies noted that this has caused the area tobecome more congested. In addition, border agencies noted that the area maybecome inadequately serviced should projected growth rates be realised.• The number of departing international passengers per outbound Immigration desk (duringpeak hour) was lower at 32.0 passengers in 2011-12, compared to 67.4 passengers in2010-11. This change was due to a lower number of international passengers departingduring peak hour, as the number of outbound Immigration desks has remained constant ateight over the five years since 2007-08. Separate international passenger number data wasnot available in 2007-08.− Adelaide Airport commented that there was a redevelopment of outboundpassenger processing facilities in 2011-12. Adelaide Airport noted that it had builtmodifications to incorporate new body scanning equipment, as well as installingequipment for international transit screening to comply with new liquids, aerosolsand gels screening procedures.02040608010012001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingBorder agencies survey— rating of outbound Immigrationfacilities availabilityBorder agencies survey— rating of outbound Immigrationfacilities standardNumber of departing passengers per outbound Immigration desk (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 162. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results137Chart 4.4.6: Adelaide Airport—baggage inspection (international services),2007-08 to 2011-12Key observations from chart 4.4.6 include:• Border agencies’ rating of the availability of inbound baggage inspection facilities remainedunchanged at good in 2011-12, while the rating of the standard of international baggageinspection facilities increased from satisfactory in 2010-11 to good in 2011-12. Borderagencies have rated both the availability and standard of international baggage inspectionfacilities as either satisfactory or good over the five years since 2007-08.− In commentary to the surveys, border agencies noted that Adelaide Airportprovided additional trolley signage in the baggage area in 2011-12, which hasimproved the facilitation of passenger movements. It was also noted that theinternational baggage hall has only one baggage belt, but areas of concern aremostly forward-looking due to future congestion that would result from theprojected growth in passenger numbers and airline arrivals.• The average number of arriving international passengers per baggage inspection desk(during peak hour) was lower at 22.1 passengers in 2011-12, compared to 33.8passengers in 2010-11. This change was due to a lower number of internationalpassengers arriving during peak hour, as well as an increase in the number of baggageinspection desks from 14 in 2010-11 to 15 in 2011-12.010203040506001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingBorder agencies survey— rating of inbound baggage inspection facilities availabilityBorder agencies survey— rating of inbound baggage inspection facilities standardNumber of arriving passengers per baggage inspection desk (duringpeak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 163. Adelaide Airport monitoring results Airport Monitoring Report 2011-12138Chart 4.4.7: Adelaide Airport—aerobridges (international services),2007-08 to 2011-12Key observations from chart 4.4.7 include:• Airlines’ rating of the availability of international aerobridge facilities was satisfactory overthe five years since 2007-08, improving slightly in 2011-12 compared to the previousperiod. Airlines’ rating of the standard of international aerobridge facilities also increased in2011-12, though remained rated as satisfactory.− In commentary to the surveys, airlines noted that Adelaide Airport had addressedthe problems with air-conditioning that were raised in the surveys in 2010-11.However, some airlines noted ongoing issues with the availability of aerobridgesdue to Adelaide Airport having only four wide body parking bays for internationalaircraft. It was also noted that there had been a couple of breakdowns in 2011-12that resulted in flight delays, although generally the facilities were still rated assatisfactory.• Since 2006-07, 100 per cent of passengers arriving and departing used an aerobridge.− Adelaide Airport commented that every international flight had access to anaerobridge since the opening of its multi-user terminal (in 2005-06). AdelaideAirport noted that during 2011-12 there was an increase in international servicesthroughout the year.40%50%60%70%80%90%100%01234562007–08 2008–09 2009–10 2010–11 2011–12PercentageofpassengersusinganaerobridgeAverageratingAirline surveys— rating of aerobridges availabilityAirline surveys— rating of aerobridges standardPercentage of international passengers arriving using an aerobridge (RHS)Percentage of international passengers departing usingan aerobridge (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 164. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results139Chart 4.4.8: Adelaide Airport—security (international services), 2007-08 to 2011-12Key observations from chart 4.4.8 include:• In 2007-08, international passengers rated the quality of security search process as good.International passenger survey data has not been available from Adelaide Airport from2008-09 onwards. Adelaide Airport noted that the information was not available due tochanges in border agencies’ processes.• The number of departing international passengers per international security clearancesystem (during peak hour) was lower at 128.0 passengers in 2011-12, compared to269.5 passengers in 2010-11. This change was due to a lower number of internationalpassengers departing during peak hour in 2011-12. The number of security clearancesystems was constant at two over the five years since 2007-08.− Adelaide Airport commented that it has upgraded x-ray screening equipment at thetransit screening point to include multi-view x-ray and a bottle and liquid scanner, inline with Office of Transport Security requirements. Adelaide Airport also noted thatall international passengers pass the central screening, which consists of threesecurity clearance systems.06012018024030036001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengerspersecurityclearancesystemAverageratingPassenger surveys— ratingof quality of security search processNumber of departingpassengers per security clearancesystem (duringpeak hour)Very poorPoorSatisfactoryGoodExcellent
  • 165. Adelaide Airport monitoring results Airport Monitoring Report 2011-12140Chart 4.4.9: Adelaide Airport—baggage processing (international services),2007-08 to 2011-12Key observations from chart 4.4.9 include:• Airlines’ rating of the availability of international baggage processing facilities wasunchanged in 2011-12 and remained rated as satisfactory. Airlines’ rating of the standardof international baggage processing facilities decreased from good in 2010-11 tosatisfactory in 2011-12.− In commentary to the surveys, some airlines noted that while baggage processingfacilities for departing passengers are good, the baggage facilities for arrivingpassengers can be congested at times as there is only one international arrivalsbaggage belt. Airlines had previously raised this issue in 2010-11. Some airlinesalso noted that there were some issues regarding the airport communicatingbaggage facility breakdowns that occurred during the period.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAirline surveys— rating of baggage processing facilities availabilityAirline surveys— rating of baggage processing facilities standardExcellentGoodPoorVery poorSatisfactory
  • 166. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results141Chart 4.4.10: Adelaide Airport—baggage trolleys (international services),2007-08 to 2011-12Key observations from chart 4.4.10 include:• In 2007-08, international passengers rated the findability of baggage trolleys as good.However, no international passenger survey data has been available from Adelaide Airportfrom 2008-09 onwards.• The number of international passengers per baggage trolley (during peak hour) was lowerat 0.9 passengers in 2011-12, compared to 1.5 passengers in 2010-11. This change wasdue to a lower number of international passengers travelling during peak hour in 2011-12.The number of international passengers per baggage trolley (during peak hour) was lowerin the period despite the number of working accessible baggage trolleys decreasing from670 in 2010-11 to 607 in 2011-12.− Adelaide Airport noted that trolley numbers will be reviewed in the next financialyear due to the construction of the new multi-level car park. Adelaide Airport alsonoted that baggage trolleys are made available to all passengers at no charge.012345601234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperbaggagetrolleyAverageratingPassenger surveys— ratingof findability of baggage trolleysNumber of passengers per baggagetrolley (duringpeak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 167. Adelaide Airport monitoring results Airport Monitoring Report 2011-12142Chart 4.4.11: Adelaide Airport—flight information display screens (internationalservices), 2007-08 to 2011-12Key observations from chart 4.4.11 include:• In 2007-08, international passengers rated the flight information display screens assatisfactory. However, no international passenger survey data has been available fromAdelaide Airport from 2008-09 onwards.• The number of international passengers per flight information display screen (during peakhour) was lower at 6.3 passengers in 2011-12, compared to 10.8 passengers in 2010-11.The number of international passengers per information point (during peak hour) was alsolower in 2011-12, at 117.6 passengers, compared to 253.0 passengers in 2010-11.• The number of flight information display screens and information points remainedunchanged from 2010-11. The lower number of international passengers per flightinformation display screen and information point in 2011-12 was due to a lower number ofinternational passengers travelling during peak hour in 2011-12.− Adelaide Airport noted that it has commenced a flight information display screenreplacement program at departure gates, which will increase screen sizes.02004006008001000120001234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof flight information display screensPassenger surveys— ratingof signageandwayfindingNumber of passengers per flightinformation display screen(duringpeak hour) (RHS)Number of passengers per informationpoint(during peakhour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperflightinformationscreen/perflightinformationpoint
  • 168. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1434.4.3 Domestic servicesChart 4.4.12: Adelaide Airport—check-in (domestic services), 2007-08 to 2011-12Key observations from chart 4.4.12 include:• Airlines’ rating of the availability of domestic check-in desks decreased from good in2010-11 to satisfactory in 2011-12, while airlines’ rating of the standard of domesticcheck-in desks remained unchanged at good.− In commentary to the surveys, some airlines noted that better management fromAdelaide Airport has improved these facilities, although airlines raised issues withcommon user check-in allocation at peak times, as well as ongoing informationtechnology issues.• The passenger rating of the waiting time associated with domestic check-in desksimproved slightly, though remained rated as just below good in 2011-12. The number ofdeparting domestic passengers per domestic check-in desk (during peak hour) was lowerat 28.1 passengers in 2011-12, compared to 46.2 passengers in 2010-11. This change wasdue to the number of check-in desks increasing from 35 desks in 2010-11 to 39 desks in2011-12, as well as a lower number of domestic passengers travelling during peak hour in2011-12.− Adelaide Airport noted in commentary that an increase in regional fly-in/fly-outoperations impacted on the number of check-in counters available. Adelaide Airportalso stated that the introduction of Qantas baggage drop facilities reduced queuetimes for Qantas passengers and improved the efficiency of check-in usage.Adelaide Airport also noted that Tiger Airways ceased operations at the airportduring 2011-12, but recommenced at the airport in November 2012.010203040506001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingAirline surveys— rating of check-in availabilityAirline surveys— rating of check-in standardPassenger surveys— ratingof check-in waiting timeNumber of departingpassengers per check-in desk (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 169. Adelaide Airport monitoring results Airport Monitoring Report 2011-12144Chart 4.4.13: Adelaide Airport—gate lounges (domestic services), 2007-08 to 2011-12Key observations from chart 4.4.13 include:• Passengers’ rating of the quality and availability of seating in the lounge area decreased in2011-12, though remained rated as satisfactory for the fourth consecutive year.Passengers’ rating of crowding in the gate lounge area also decreased in 2011-12, thoughremained rated as satisfactory for the third consecutive year.• The number of gate lounges increased from 14 in 2010-11 to 16 in 2011-12. However, thenumber of seats and the total gate lounge area remained constant over the same period.• In 2011-12, the number of departing domestic passengers per seat in gate lounges (duringpeak hour) was lower at 0.7 passengers, compared to 1.0 passengers in 2010-11. Thischange was due to a lower number of domestic passengers departing during peak hour in2011-12, as the number of seats in the gate lounges has remained unchanged over the fiveyears since 2007-08.• The number of departing domestic passengers per square metre of lounge area (duringpeak hour) was also lower in 2011-12, from 0.2 passengers in 2010-11 to 0.1 passengersin 2011-12. This change was also due to a lower number of domestic passengers departingduring peak hour in 2011-12, as the total lounge area has remained unchanged over thefive years since 2007-08.− Adelaide Airport noted that the total of 16 gate lounges includes two outboundregional gate lounges. Adelaide Airport also noted that it has a regularmaintenance program in place to audit and replace seats as required.0.00.30.60.91.21.51.801234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof quality andavailability of seating in loungeareaPassenger surveys— ratingof crowdingin lounge areaNumber of departingpassengers per seat in gatelounges (duringpeak hour) (RHS)Number of departingpassengers per squaremetre of loungearea (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperseat/persq.metre
  • 170. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results145Chart 4.4.14: Adelaide Airport—aerobridges (domestic services), 2007-08 to 2011-12Key observations from chart 4.4.14 include:• Airlines’ rating of the availability of domestic aerobridge facilities increased fromsatisfactory in 2010-11 to good in 2011-12. Airlines’ rating of the standard of aerobridgefacilities also increased in 2011-12, though remained rated as satisfactory.− In commentary to the surveys, airlines noted that Adelaide Airport had addressedthe problems with air-conditioning that were raised in the surveys in 2010-11.Some airlines also noted that availability is limited when aircraft arrive off-scheduleduring peak periods.• The number of arriving domestic passengers per aerobridge (during peak hour) was lowerat 52.2 passengers in 2011-12, compared to 76.6 passengers in 2010-11. The number ofdeparting domestic passengers per aerobridge (during peak hour) was also lower in2011-12, with 78.1 passengers in 2011-12, compared to 115.6 passengers in 2010-11.− These are the lowest numbers of arriving and departing domestic passengers peraerobridge (during peak hour) that have been recorded over five years since2007-08. This is due to a lower number of passengers travelling during peak hourin 2011-12, as the number of aerobridges has remained unchanged from 2010-11to 2011-12.− Adelaide Airport commented that during 2011-12 it has upgraded the airconditioning of aerobridges and established a detailed cleaning program. AdelaideAirport also noted that it had performed a full mechanical audit of aerobridges andan arrival audit was introduced.02040608010012001234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAirline surveys— rating of aerobridges availabilityAirline surveys— rating of aerobridges standardNumber of arriving passengers per aerobridge (during peak hour) (RHS)Number of departingpassengers per aerobridge(during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperaerobridge
  • 171. Adelaide Airport monitoring results Airport Monitoring Report 2011-12146Chart 4.4.15: Adelaide Airport—security (domestic services), 2007-08 to 2011-12Key observations from chart 4.4.15 include:• Passengers’ rating of the quality of the security clearance search process decreasedslightly in 2011-12, though continued to be rated as satisfactory.• The number of departing domestic passengers per domestic security clearance system(during peak hour) was lower in 2011-12, at 364.7 passengers, compared to 539.3passengers in 2010-11. This change was due to a lower number of passengers departingduring peak hour in 2011-12, as the number of security clearance systems has remainedunchanged over the five years since 2007-08.− Adelaide Airport commented that the total of three security clearance systemscomprises three main passenger security points and three in-line x-rays within thebaggage handling system. Adelaide Airport also noted that one explosive tracedetection machine was added at central screening in 2011-12. This increased thenumber of machines to three, as per Office of Transport Security requirements.010020030040050060001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengerspersecurityclearancesystemAverageratingPassenger surveys— ratingof quality of security search processNumber of departingpassengers per security clearancesystem (duringpeak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 172. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results147Chart 4.4.16 Adelaide Airport—baggage processing (domestic services),2007-08 to 2011-12Key observations from chart 4.4.16 include:• Airlines’ rating of the availability of domestic baggage facilities remained unchanged atgood in 2011-12, for the third consecutive year. However, airlines’ rating of the standard ofdomestic baggage facilities decreased from good in 2010-11 to satisfactory in 2011-12.− In commentary to the surveys, airlines noted that availability is good, althoughsome airlines raised issues with Adelaide Airport’s communication of baggagefacility breakdowns and damaged bags coming through the system.• Passengers’ rating of the waiting time associated with domestic baggage reclaimdecreased from good in 2010-11 to satisfactory in 2011-12. Passengers’ rating of thewaiting time associated with domestic baggage reclaim has fluctuated between good andsatisfactory over the five years since 2007-08.• Passengers have rated the baggage reclaim circulation space as good over the five yearssince 2007-08.• Passengers’ rating of the information display for inbound domestic baggage reclaimdecreased from good in 2010-11 to satisfactory in 2011-12.− Adelaide Airport advised that information regarding baggage reclaim informationdisplay was not collected as part of the passenger survey in 2007-08 and 2008-09.Adelaide Airport commented that its baggage system maintenance is alwaysconducted out of hours and that the system is always available during theoperation of the terminal. Adelaide Airport also noted that it upgraded its baggagehandling system in 2011-12, which allowed new automatic baggage readers tointegrate with Qantas next-generation check-in facilities.− The capacity of the inbound baggage handling system at Adelaide Airport hasremained unchanged since it increased to 3000 bags per hour in 2008-09 from2250 bags in 2006-07.123Since 2007-08, the capacity of the outbound baggagehandling system has remained constant at 3000 bags per hour.123Adelaide Airport did not provide data for the capacity of the inbound baggage handling system in 2007-08.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAirline surveys— rating of baggage processing facilities availabilityAirline surveys— rating of baggage processing facilities standardPassenger surveys— ratingof waiting time for inbound baggage reclaimPassenger surveys— ratingof information display for inbound baggage reclaimPassenger surveys— ratingof circulation space for inbound baggage reclaimExcellentGoodPoorVery poorSatisfactory
  • 173. Adelaide Airport monitoring results Airport Monitoring Report 2011-12148Chart 4.4.17: Adelaide Airport—baggage trolleys (domestic services),2007-08 to 2011-12Key observations from chart 4.4.17 include:• Passengers’ rating of the findability of baggage trolleys increased from satisfactory in2010-11 to good in 2011-12.• The number of domestic passengers per baggage trolley (during peak hour) was lower at2.7 passengers in 2011-12, compared to 4.0 passengers in 2010-11. This change was dueto a lower number of passengers travelling during peak hour in 2011-12. The number ofdomestic passengers per baggage trolley (during peak hour) was lower despite the numberof working accessible baggage trolleys decreasing from 670 in 2010-11 to 607 in 2011-12.− Adelaide Airport noted that trolley numbers will be reviewed in the next financialyear due to the construction of the new multi-level car park. Adelaide Airport alsonoted that baggage trolleys are made available to all passengers at no charge.012345601234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperbaggagetrolleyAverageratingPassenger surveys— rating of findability of baggage trolleysNumber of passengers per baggagetrolley (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 174. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results149Chart 4.4.18: Adelaide Airport—flight information display screens (domestic services),2007-08 to 2011-12Key observations from chart 4.4.18 include:• Passengers’ rating of flight information display screens has remained satisfactory since2007-08. Passengers’ rating of the signage and wayfinding were provided for the first timein 2008-09, and have been rated as satisfactory from then onwards.• The number of domestic passengers per flight information display screen (during peakhour) was lower at 19.4 passengers in 2011-12, compared to 28.6 passengers in 2010-11.The number of domestic passengers per information point (during peak hour) was alsolower over the same period, at 365.0 passengers in 2011-12, compared to 672.5passengers in 2010-11.• The number of flight information display screens and information points remainedunchanged from 2010-11. The lower number of domestic passengers per flight informationdisplay screen and information point was due to a lower number of domestic passengerstravelling during peak hour in 2011-12.− Adelaide Airport noted that it has commenced a flight information display screenreplacement program at departure gates, which will increase screen sizes.21.44 21.94 28.32 28.62 19.410200400600800100001234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof flight information display screensPassenger surveys— ratingof signageandwayfindingNumber of passengers per flightinformation display screen(duringpeak hour) (RHS)Number of passengers per informationpoint(during peakhour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperflightinformationscreen/perflightinformationpoint
  • 175. Adelaide Airport monitoring results Airport Monitoring Report 2011-12150Chart 4.4.19: Adelaide Airport—washrooms (domestic services), 2007-08 to 2011-12Key observations from chart 4.4.19 include:• Passengers’ rating of the standard of washroom facilities decreased in 2011-12, thoughremained rated as satisfactory. Passengers have rated the standard of washroom facilitiesas satisfactory over the five years since 2007-08.− Adelaide Airport commented that the installation of hand dryers in all bathroomsand the removal of paper towels increased the overall cleanliness of washrooms in2011-12.4.4.4 Other airport servicesChart 4.4.20: Adelaide Airport—availability of airside services and facilities (otherairport services), 2007-08 to 2011-1201234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof standard of washroomsExcellentGoodPoorVery poorSatisfactory01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of runway Rating of taxiwaysRating of aprons Rating of aircraft parking facilities andbaysRating of groundhandlingservices andfacilitiesExcellentGoodPoorVery poorSatisfactory
  • 176. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results151Key observations from chart 4.4.20 include:• Airlines’ rating of the availability of taxiways, aprons and ground handling services andfacilities all increased in 2011-12 compared to 2010-11. In particular, airlines’ rating of theavailability of aprons and ground handling services and facilities increased within thesatisfactory range, while airlines’ rating of taxiway availability increased within the goodrange.• Airlines’ rating of the availability of aircraft parking facilities and bays decreased fromsatisfactory in 2010-11 to poor in 2011-12, while airlines’ rating of the availability ofrunways remained unchanged at good in 2011-12.− In commentary to the surveys, some airlines offered similar responses as those inresponse to the surveys in 2010-11, where it was commented that there wereinsufficient aircraft parking bays when aircraft arrive off-schedule. However, airlinesnoted that for most airside services and facilities there are no significant issues withavailability.Chart 4.4.21: Adelaide Airport—standard of airside services and facilities (other airportservices), 2007-08 to 2011-12Key observations from chart 4.4.21 include:• Airlines’ rating of the standard of runways, taxiways and aircraft parking facilities and baysall increased in 2011-12 compared with 2010-11. In particular, airlines’ rating of thestandard of runways and taxiways increased within the good range, while airlines’ rating ofthe standard of aircraft parking facilities and bays increased within the satisfactory range.• Airlines’ rating of the standard of aprons and ground handling services and facilities bothdecreased within the satisfactory range in 2011-12.− In commentary to the surveys, airlines noted that most airside services andfacilities are of a good standard. However, some airlines noted in regards to groundhandling services and facilities that the covered walkway was of a poor standard,as was the old international terminal.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of runway Rating of taxiwaysRating of aprons Rating of aircraft parking facilities andbaysRating of groundhandlingservices andfacilitiesExcellentGoodPoorVery poorSatisfactory
  • 177. Adelaide Airport monitoring results Airport Monitoring Report 2011-12152Chart 4.4.22: Adelaide Airport—airport management responsiveness (other airportservices), 2007-08 to 2011-12Key observations from chart 4.4.22 include:• Airlines’ rating of airport management’s approach to addressing quality of service mattersincreased in 2011-12, though remained rated as satisfactory. Airlines’ rating of airportmanagement’s approach to addressing quality of service matters has remained satisfactoryover the four years since 2008-09.− In commentary to the surveys, airlines noted improvements in airport managementover the period and that Adelaide Airport has been more responsive to operationalneeds.• Border agencies’ rating of airport management’s approach to concerns increased fromsatisfactory in 2010-11 to good in 2011-12. With the exception of the satisfactory rating in2010-11, border agencies’ rating of airport management’s approach to concerns hasremained as good over the five years since 2007-08.− In commentary to the surveys, border agencies noted that airport management arevery accessible and that they have a sound relationship with all senior executives.However, border agencies raised an issue with public loudspeaker volumes thathas yet to be resolved by Adelaide Airport.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAirline surveys— rating of overall system for addressing quality of service concernsBorder agencies survey— ratingof management approachto concernsExcellentGoodPoorVery poorSatisfactory
  • 178. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results153Chart 4.4.23: Adelaide Airport—terminal kerbside (other airport services),2007-08 to 2011-12Key observations from chart 4.4.23 include:• Passengers’ rating of kerbside pick-up and drop-off facilities decreased slightly in 2011-12,though remained rated as satisfactory. With the exception of 2007-08, when ratings werenot available from the airport, passengers’ rating of kerbside pick-up and drop-off facilitieswere consistently rated as satisfactory over the five years since 2007-08.• Passengers’ rating of taxi facilities waiting time was unchanged in 2011-12, retaining itsrating of good, held for the five years since 2007-08.• Passengers’ rating of kerbside space congestion decreased slightly in 2011-12, thoughwas rated as satisfactory for the third consecutive year.− Adelaide Airport noted that all of these results were influenced by the constructionof its new multi-level car park during the period.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof kerbsidepick-upanddrop-off facilitiesPassenger surveys— ratingof taxi facilities waitingtimePassenger surveys— ratingof kerbsidespacecongestionExcellentGoodPoorVery poorSatisfactory
  • 179. Adelaide Airport monitoring results Airport Monitoring Report 2011-121544.5 Car parking services monitoring resultsIn this section, the monitoring results for car parking Adelaide Airport are presented. Thisincludes prices (section 4.5.1), revenues, costs and profits (section 4.5.2) and quality of carparking (section 4.5.3).Section 4.5.4 provides details on the various other transport options that are available fortravelling to and from the airport.4.5.1 PricesChart 4.5.1: Adelaide Airport—prices at short-term car park, 2007-08 to 2011-12Key observations from chart 4.5.1 include:• In 2011-12, Adelaide Airport did not change any of its prices at its short-term car park forthe second consecutive year. In August 2012, Adelaide Airport increased a number ofprices at its short-term car park, to coincide with the opening of its new multi-level car park.• The price for one hour short-term car parking has remained unchanged at $4 over theeleven years since 2001-12. Since 2001-02, the price for two hours short-term parking hasincreased once, in 2009-10, when Adelaide Airport increased the price from $7 to $8(14.3 per cent).• Since 2001-02, the price for four hours short-term parking has increased by $5(55.6 per cent), the price for eight hours short-term parking has increased by $13(100 per cent) and the price for 24 hours short-term parking has increased by $14(87.5 per cent).− Adelaide Airport commented that it had previously increased prices for theshort-term car park primarily as a way of managing demand and encouraginglong-stay vehicles to use the long-term car park rather than the short-term car park.048121620242832362001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12DollarsShort-term car park—1 hour Short-term car park—2 hours Short-term car park—4 hoursShort-term car park—8 hours Short-term car park—24 hours
  • 180. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results155Chart 4.5.2: Adelaide Airport—prices at long-term car park, 2007-08 to 2011-12Key observations from chart 4.5.2 include:• In 2011-12, Adelaide Airport did not change any of its prices at its long-term car park for thesecond consecutive year. These prices did not change following the opening of the newmulti-level car park in August 2012.• Since 2001-02, the prices for one, two and three days in long-term parking have increasedby 56.3 per cent, 25.0 per cent and 4.2 per cent respectively to $25, $40 and $50respectively. Since 2001-02, the prices for five and seven days in long-term parking havedecreased by 25.0 per cent and 30.0 per cent respectively to be $60 and $70.• Adelaide Airport opened its long-term car park in March 2006. Between 2001-02 andMarch 2006, long-term car parking was offered in the short-term car park for $16 per dayup until 5 days, after which parking was $10 per additional day.01530456075901052001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12DollarsLong-term car park—1 day Long-term car park—2 days Long-term car park—3 daysLong-term car park—5 days Long-term car park—7 days
  • 181. Adelaide Airport monitoring results Airport Monitoring Report 2011-121564.5.2 Revenues, costs and profitsTable 4.5.1 outlines Adelaide Airport’s revenues, operating expenses and operating margins for car parking and the total airport from 2001-02 to 2011-12.Table 4.5.1: Adelaide Airport—revenues, operating expenses and operating margins for car parking and total airport services,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue($million)Car parking 5.5 5.8 6.3 6.9 8.1 9.8 11.9 12.5 13.7 14.8 14.0Total airport 39.9 48.2 58.2 64.8 88.6 123.5 149.4 128.6 149.3 160.7 145.3Operating expenses($million)Car parking 1.7 2.1 2.1 2.0 2.7 4.0 3.9 3.9 3.3 4.2 4.5Total airport 27.5 29.3 31.3 31.6 52.0 61.1 67.5 71.1 71.0 71.4 76.0Operating margin($million)Car parking 3.8 3.7 4.2 4.9 5.4 5.8 7.9 8.5 10.4 10.6 9.5Total airport 12.4 18.9 26.9 33.2 36.6 62.4 81.9 57.5 78.3 89.3 69.3Operating margin asa % of revenueCar parking 69.0 63.3 66.9 70.6 66.1 59.0 66.8 68.5 75.7 71.9 68.0Total airport 31.0 39.2 46.3 51.2 41.3 50.5 54.8 44.7 52.5 55.6 47.7
  • 182. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results157Key observations from table 4.5.1 include:• Car parking revenue decreased by 4.9 per cent from $14.8 million in 2010-11 to$14.0 million in 2011-12. This change is due to a 14.0 per cent decrease in the annualthroughput of the short-term car park and a 12.7 per cent decrease in the annualthroughput of the long-term car park (discussed in table 4.5.2). Notably, car parking pricesremained unchanged in 2011-12 compared to the previous year.− Since 2001-02, car parking revenue has increased by 154.6 per cent. The largestincrease in car parking revenue occurred in 2006-07, when revenue increased by$1.7 million (21.4 per cent).• Operating expenses for car parking increased by 8.0 per cent from $4.2 million in 2010-11to $4.5 million in 2011-12.− Since 2001-02, car parking operating expenses have increased by 162.7 per cent.The largest increase in car parking operating expenses occurred in 2006-07, whenexpenses increased by $1.3 million (46.6 per cent).− As a percentage of total airport operating expenses, car parking operatingexpenses were relatively unchanged at 5.9 per cent in 2011-12, compared to5.8 per cent in 2010-11.• As a result of revenue decreasing while operating expenses increased, car parkingoperating margin decreased by 10.0 per cent from $10.6 million in 2010-11 to $9.5 millionin 2011-12.− Since 2001-02, car parking operating margin has increased by 151.0 per cent. Thelargest increase in car parking operating margin occurred in 2007-08, whenoperating margin increased by $2.2 million (37.0 per cent) compared to theprevious year.− As a percentage of total airport operating margin, car parking operating marginincreased from 27.0 per cent in 2010-11 to 29.7 per cent in 2011-12.• Car parking operating margin as a percentage of car parking revenue was 68.0 per cent in2011-12, while for the total airport the figure was 47.7 per cent. Car parking operatingmargin as a percentage of car parking revenue has fluctuated between 59.0 per cent and75.7 per cent since 2001-02, while for the total airport it has fluctuated between31.0 per cent and 55.6 per cent.
  • 183. Adelaide Airport monitoring results Airport Monitoring Report 2011-12158Chart 4.5.3: Adelaide Airport—airport car parking revenue share of total airportrevenue, 2001-02 to 2011-12Key observations from chart 4.5.3 include:• Car parking revenue as a proportion of total airport revenue increased from 9.2 per cent in2010-11 to 9.7 per cent in 2011-12. This change was due to total airport revenuedecreasing at a faster rate than car parking revenue during the period, falling 9.6 per centand 4.9 per cent respectively.− Notably, changes in this measure since 2001-02 were partly attributable tochanges in non-aeronautical revenue due to increments and decrements in the fairvalue of non-aeronautical investment property.− Excluding changes in the fair value of non-aeronautical investment property, carparking revenue as a proportion of total airport revenue increased marginally to9.9 per cent in 2011-12, compared to 9.7 per cent in 2010-11. Between 2006-07and 2011-12, car parking revenue as a proportion of total airport revenue,excluding changes in the fair value of non-aeronautical investment property, hasranged from 8.3 per cent to 9.9 per cent.• The percentage of total airport revenue that is contributed by car parking revenue hasdeclined since 2001-02, when car parking revenue contributed 13.9 per cent of total airportrevenue.− Between 2001-02 and 2003-04, car parking revenue contributed between11.1 per cent and 13.9 per cent of total airport revenue. Since 2003-04, car parkingrevenue has contributed between 8.0 per cent and 9.7 per cent of total airportrevenue.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—carparking Revenue—total airport
  • 184. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results159Chart 4.5.4: Adelaide Airport—revenues, operating expenses and operating marginsfor car parking services on a per car park space basis, 2001-02 to 2011-12Key observations from chart 4.5.4 include:• Car parking revenue and operating margin per car park space decreased in 2011-12, whilecar parking operating expenses per car park space increased.− It should be noted that data for the number of car parking spaces at AdelaideAirport in 2001-02 was not available.• Car parking revenue per car park space decreased by 5.0 per cent from $4918 in 2010-11to $4673 in 2011-12. This change was due to car parking revenue decreasing(-4.9 per cent) while the number of car park spaces slightly increased (0.1 per cent).− Since 2002-03, car parking revenue per car park space has decreased by4.8 per cent. Car parking revenue per car park space at Adelaide Airport reached apeak of $5443 in 2004-05.• Car parking operating expenses per car park space increased by 8.0 per cent from $1384in 2010-11 to $1495 in 2011-12. This change was due to car parking operating expensesincreasing (8.0 per cent) at a faster rate than the number of car park spaces (0.1 per cent).− Since 2002-03, car parking operating expenses per car park space havedecreased by 17.1 per cent. Car parking operating expenses per car park space atAdelaide Airport reached a peak of $1803 in 2002-03.• As a result of car parking revenue decreasing while car parking operating expensesincreased, car parking operating margin per car park space decreased by 10.1 per centfrom $3534 in 2010-11 to $3179 in 2011-12.− Since 2002-03, car parking operating margin per car park space has increased by2.3 per cent. The largest increase in car parking operating margin per car parkspace since 2002-03 occurred in 2007-08, when operating margin per car parkspace increased by $448 (18.7 per cent).06001 2001 8002 4003 0003 60001 0002 0003 0004 0005 0006 0002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12NumberofcarparkspacesDollarspercarparkRevenue per car park space Operating expenses per car park spaceOperating margin per car park space Number of car park spaces (RHS)
  • 185. Adelaide Airport monitoring results Airport Monitoring Report 2011-121604.5.3 Quality of car parking facilitiesTable 4.5.2 outlines the number of car park spaces available and annual throughput of car park facilities at Adelaide Airport from 2001-02 to 2011-12.Table 4.5.2: Adelaide Airport—number of car park spaces and average daily throughput, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Number of car parkspacesShort-term NA 1 190 1 170 1 265 860 829 829 829 834 830 720Long-term NA NA NA NA 420 450 764 940 994 1 020 1 132Staff NA NA NA NA 1 265 1 138 1 197 1 197 1 257 1 150 1 150Total airport NA 1 190 1 170 1 265 2 545 2 417 2 790 2 966 3 085 3 000 3 002Annual throughput ofcar park facilities(thousands)Short-term NA 908 1 056 1 139 1 182 1 117 1 119 1 128 1 085 1 078 927Long-term NA NA NA NA 19 61 63 78 85 97 85Total airport NA 908 1 056 1 139 1 201 1 178 1 182 1 206 1 170 1 175 1 012Average dailythroughput of carpark facilitiesShort-term NA 2 488 2 884 3 121 3 239 3 060 3 058 3 090 2 973 2 954 2 532Long-term NA NA NA NA 53 167 173 214 232 265 232Total airport NA 2 488 2 884 3 121 3 292 3 227 3 231 3 304 3 205 3 219 2 764Notes: Adelaide Airport opened its long-term car park in March 2006. Prior to this time, long-term car parking was offered in the short-term car park. As a result, monitoring data for 2005-06only includes partial data for annual throughput of long-term car parking in 2005-06. Between 2001-02 and March 2006, Adelaide Airport did not distinguish throughput in its car parkbetween short-term and long-term, therefore, all throughput was reported as short-term car parking.
  • 186. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results161Key observations from table 4.5.2 include:• In 2011-12, the number of short-term car parking spaces decreased by 13.3 per cent from830 spaces in 2010-11 to 720 spaces, while long-term car parking spaces increased by11.0 per cent from 1020 spaces in 2010-11 to 1132 spaces. Since 2001-02, the totalnumber of car parking spaces has increased by 152.3 per cent from 1190 spaces in2001-02 to 3002 spaces in 2011-12.− Adelaide Airport noted that the development of its new multi-level car parkimpacted on the number of short-term car parking spaces available in varyingdegrees throughout 2011-12.− Adelaide Airport opened its new multi-level car park in August 2012, whichprovides short-term car parking for more than 2000 public and car rental vehicles.This new short-term car park is more than double the size of the previousshort-term car park.• The number of short-term car parking spaces has decreased by 470 spaces since 2001-02(-39.5 per cent). The largest decrease in short-term car parking spaces occurred in2005-06, when the number of short-term car parking spaces decreased by 405 spaces(-32.0 per cent). This decrease in short-term car parking spaces coincided with the openingof the multi-user terminal and long-term car park during 2005-06.• The number of long-term car parking spaces has increased in every year since the car parkopened in March 2006. The largest increase in long-term car parking spaces occurred in2007-08, when the number of long-term car parking spaces increased by 314 spaces(69.8 per cent).• The average daily throughput in both the short-term car park and long-term car parkdecreased in 2011-12.− The average daily throughput in the short-term car park decreased by 14.3 per centfrom 2954 cars per day in 2010-11 to 2532 cars per day in 2011-12. This was dueto a reduction in the total annual throughput of the short-term car park by14.0 per cent to be just under one million cars in 2011-12. This was the first timesince 2002-03 that total annual throughput of the short-term car park has been lessthan one million cars.− The average daily throughput in the long-term car park decreased by 12.7 per centfrom 265 cars per day in 2010-11 to 232 cars per day in 2011-12. This was due toa reduction in the total annual throughput of the long-term car park by 12.4 per centto 84 777 cars in 2011-12.
  • 187. Adelaide Airport monitoring results Airport Monitoring Report 2011-12162Chart 4.5.5: Adelaide Airport—passenger survey ratings of the quality of car parkingfacilities, 2001-02 to 2011-12Key observations from chart 4.5.5 include:• Domestic passengers’ rating of Adelaide Airport’s car parking standard and time taken toenter has remained satisfactory since 2001-02, although, Adelaide Airport did not providedomestic passengers’ rating of car parking standard in 2003-04 and 2004-05.• Domestic passengers’ rating of Adelaide Airport’s car parking availability decreased fromsatisfactory in 2010-11 to poor in 2011-12. Between 2002-03 and 2010-11, domesticpassengers had rated Adelaide Airport’s car parking availability as satisfactory in everyyear.− Adelaide Airport noted that the development of the new multi-level car parkimpacted on the number of short-term car parks available in varying degreesthroughout 2011-12.− It should be noted that domestic passengers’ rating of Adelaide Airport’s carparking availability, standard and time taken to enter was not available for 2001-02.In addition, Adelaide Airport has not provided separate international passengersurvey data from 2008-09 onwards.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingPassenger surveys—airport car parkingavailabilityPassenger surveys—airport car parkingstandardPassenger surveys—airport car parkingtime taken to enterExcellentGoodSatisfactoryPoorVery poor
  • 188. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results1634.5.4 Other transport optionsTable 4.5.3: Adelaide Airport—landside access chargesTransport option Average list prices($)Indexed average list prices(2009-10 base year = 100)2009-10 2010-11 2011-12 2009-10 2010-11 2011-12Public bus None None None NA NA NAPrivate bus None None None NA NA NAOff-airport car parking None None None NA NA NATaxis (per pick-up) 2.00 2.00 2.00 100.0 100.0 100.0Private car (per entry) 2.00 2.00 2.00 100.0 100.0 100.0Table 4.5.4: Adelaide Airport—revenues from landside access chargesTransport option 2009-10 2010-11 2011-12Public bus Nil Nil NilPrivate bus Nil Nil NilOff-airport car parking Nil Nil NilTaxis (per pick-up) $233 600 $253 400 $243 200Private car (per entry) $45 000 $44 000 $31 000Total $278 600 $297 400 $274 200The various other transport options to Adelaide Airport that are available, including the leviesimposed by the airport on the operators and revenues received for those other transportoptions, are outlined in tables 4.5.3 and 4.5.4 and below:• Terminal drop-off and pick-up− Due to Government security requirements, cars must not be left unattended at anytime.− Adelaide Airport runs a complimentary shuttle bus three times per hour to and fromits long-term car park and T1.124124Adelaide Airport 2012, To & From: Shuttle Bus, viewed on 5 December 2012, http://www.adelaideairport.com.au/air-travel/to-and-from/shuttle-bus.
  • 189. Adelaide Airport monitoring results Airport Monitoring Report 2011-12164• Off-airport car parking− Adelaide Airport is serviced by a number of off-airport car parking facilities. Off-airport prices ranged from $39125to $41126for one day’s parking and $58127to$60128for three days. Adelaide Airport does not charge off-airport car parkingoperators for access to the airport.• Taxis− Adelaide Airport charges a $2 airport service fee for each taxi using the T1 taxirank. This charge contributed around $243 200 to airport profit in 2011-12, a4.0 per cent decrease from $253 400 in 2010-11. This charge has not increasedsince 2006.− Adelaide Airport is only entitled to retain 20 per cent, or 40 cents, of the fee fromthis access charge. The rest of the fee is paid to the taxi council for the taxiconcierge services at the taxi rank (60 per cent) and for driver education(20 per cent). In 2011-12, Adelaide Airport retained $243 200 of the $1.2 milliongenerated from this access charge.− Adelaide Airport noted that it made additional payments to the taxi council since2009-10 for additional taxi concierge services at the taxi rank, due to increasingcongestion at the terminal.• Buses and limousines− A public bus service to Adelaide Airport runs past T1 and connects to Glenelg andAdelaide’s CBD. The service uses the standard metro ticket, which costs $4.70 fora single trip and $8.80 for a daily fare.129Adelaide Airport does not charge publicbuses for access to the airport.− Two private bus companies service Adelaide Airport. Adelaide Airport does notcharge private buses for access to the airport.− There are also commercial bus companies servicing the airport, specialising inCBD hotel pick-up and door-to-door service from the outer suburbs (requiringpre-booking). Adelaide Airport charges these companies $2 per entry to access theairport. This fee has not increased in 2011-12.− Adelaide Airport charges a $2 per entry fee to private cars (such as limousines) toaccess the airport. This charge contributed around $31 000 to airport revenue in2011-12, a 29.5 per cent decrease from $44 000 in 2010-11.4.6 Adelaide Airport price and quality of servicemonitoring beyond 2011-12In its 2011 inquiry into the economic regulation of airport services, the Productivity Commission(PC) recommended that Adelaide Airport be removed from the ACCC’s price and quality of125Airport Security Parking, Rates, viewed on 5 December 2012, http://www.asparking.com.au/Rates.aspx.126Airport Parking, Home: Quick Quote, viewed on 5 December 2012, http://www.airportparking.net.au/index.html.127Airport Security Parking, Rates, viewed on 5 December 2012, http://www.asparking.com.au/Rates.aspx.128Airport Parking, Home: Quick Quote, viewed on 5 December 2012, http://www.airportparking.net.au/index.html.129From July 2012, prices for a standard metro ticket have increased to $4.90 for a single trip and $9.10 for a daily fare.Adelaide Metro, Fares & Metrotickets, viewed on 5 December 2012, http://www.adelaidemetro.com.au/Tickets/Fares.
  • 190. Airport Monitoring Report 2011-12 Adelaide Airport monitoring results165service monitoring at Australia’s major airports. The Australian Government agreed with thisrecommendation and issued new directions on 12 June 2012, directing that the ACCC monitorthe prices, costs and profits related to the supply of aeronautical and car parking services at thefour specified airports and excluding Adelaide Airport from the monitoring regime. As a result,this report will be the final ACCC Airport Monitoring Report (AMR) to feature Adelaide Airportunder the current regime.Following this year’s report, Adelaide Airport will be required to join the second-tier price andquality of service reporting process established by the National Aviation Policy White Paper inDecember 2009. This is a self-administered scheme, where the airport will be expected todisclose on its website:• prices of aeronautical services• prices of car parking services• various quality of service outcomes• the airport complaint-handling processes and outcomes.In addition, the Australian Government intends that airports under this scheme will publiclydisclose the results of their customer/passenger satisfaction surveys.
  • 191. Adelaide Airport monitoring results Airport Monitoring Report 2011-12166
  • 192. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results1675 Brisbane AirportKey points• In 2011-12 total passenger numbers at Brisbane Airport increased by 4.6 per cent, to21.2 million. Domestic passenger numbers increased by 4.6 per cent and internationalpassenger numbers increased by 4.9 per cent.• Total aeronautical revenue increased by 7.0 per cent to $212.4 million.• Aeronautical revenue per passenger, used by the ACCC as a proxy for average prices,increased by 2.2 per cent to $10.02.• Total aeronautical operating expenses increased by 1.8 per cent to $117.6 million. Rises indepreciation, security and general administration costs were partially offset by falls insalaries and wages, services/utilities and property/leasing maintenance costs.• Total aeronautical operating margin increased by 14.3 per cent to $94.8 million. On a perpassenger basis the increase was 9.2 per cent to $4.47.• Aeronautical services return on non-current assets increased by 0.6 percentage points to6.8 per cent in 2011-12.• Car parking prices at Brisbane in 2011-12 were unchanged for long-term car parking at itsdomestic terminal and also for short and long-term car parking at the international carparking facility. Brisbane Airport increased most prices for short-term car parking at itsdomestic terminal.• In 2011-12 car parking revenue increased by 1.4 per cent to $60.9 million while revenueper car park space declined by 23.0 per cent to $4738. This was impacted by the openingof 5000 new car spaces in March 2012.• Total car parking operating margin decreased by 11.8 per cent in 2011-12 to $37.9 million.• Major investments completed at Brisbane Airport during 2011-12 included the expansion ofthe Common User Satellite, the domestic terminal Skywalk and the new domestic terminalmulti-level car park.• In 2011-12, additions to aeronautical tangible non-current assets were $156.9 million whichwas equivalent to 10.8 per cent of total aeronautical tangible non-current assets.• Brisbane Airport’s overall rating for quality of service decreased during 2011-12, from goodto satisfactory.• Other quality of service rating outcomes for Brisbane Airport include:− Average rating for the international terminal decreased within the good category.− Average rating for the domestic terminal decreased from good to satisfactory.− Average rating for other airport services remained satisfactory.
  • 193. Brisbane Airport monitoring results Airport Monitoring Report 2011-12168This chapter presents the detailed prices monitoring, financial performance and quality ofservice monitoring results in relation to the supply of aeronautical services and car parkingservices at Brisbane Airport. This chapter is structured as follows:• Overview of aeronautical and car parking monitoring results (section 5.1)• Airport overview and major airport investments (section 5.2)• Aeronautical services prices monitoring and financial performance results (section 5.3)• Aeronautical services quality of service monitoring results (section 5.4)• Car parking services monitoring results (section 5.5).5.1 Overview of aeronautical and car parkingmonitoring results5.1.1 Key aeronautical services indicators for 2011-12Table 5.1.1: Brisbane Airport—key aeronautical services indicatorsPassengernumbers(million)Totalaeronauticalrevenue($million)Aeronauticalrevenue perpassenger($)Totalaeronauticaloperatingmargin($million)Aeronauticaloperatingmargin perpassenger($)Aeronauticalrevenue as a% of totalairportrevenue(%)2010-11 20.3 198.5 9.80 83.0 4.10 43.52011-12 21.2 212.4 10.02 94.8 4.47 43.7%change ▲ 4.6% ▲ 7.0% ▲ 2.2% ▲ 14.3% ▲ 9.2% ▲ 0.2ppTable 5.1.1: Brisbane Airport—key aeronautical services indicators (cont...)Totaltangibleaeronauticalnon-currentassets($million)Rate ofreturn ontangibleaeronauticalnon-currentassets(%)Averagequality ofservicerating foravailabilityof airportservicesAveragequality ofservicerating forstandard ofairportservicesAirlinerating forquality ofservicePassengerrating forquality ofservice2010-11 1 349.5 6.2 4.34 4.02 3.82 4.172011-12 1 437.2 6.8 3.89 3.93 3.63 4.16%change ▲ 6.5% ▲ 0.6pp ▼ 10.4% ▼ 2.4% ▼ 5.0% ▼ 0.3%
  • 194. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results1695.1.2 Key car parking services indicators for 2011-12Table 5.1.2: Brisbane Airport—car parking prices as at 30 June130Short-term car parking Long-term car parkingDomestic 1 hour 3 hours 8 hours 24 hours 1 day 3 days 7 days2010-11 $13.00 $22.00 $40.00 $40.00 $40.00 $80.00 $140.002011-12 $14.00 $22.00 $50.00 $50.00 $40.00 $80.00 $140.00%change ▲ 7.7% 0.0% ▲ 20.0% ▲ 20.0% 0.0% 0.0% 0.0%International 1 hour 3 hours 8 hours 24 hours 1 day 3 days 7 days2010-11 $13.00 $22.00 $30.00 $30.00 $30.00 $70.00 $99.002011-12 $13.00 $22.00 $30.00 $30.00 $30.00 $70.00 $99.00%change 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Table 5.1.3: Brisbane Airport—key car parking services indicatorsNumber ofcar parkspaces(thousand)Total carparkingrevenue($million)Car parkingrevenue percar parkspace($)Total carparkingoperatingmargin($million)Car parkingoperatingmargin percar parkspace($)Car parkingrevenue as a% of totalairportrevenue%2010-11 9.8 60.1 6 151 43.0 4.40 13.22011-12 12.9 60.9 4 738 37.9 2.94 12.5%change ▲ 31.7% ▲ 1.4% ▼ 23.0% ▼ 11.8% ▼ 33.1% ▼ 0.7ppTable 5.1.3: Brisbane Airport—key car parking services indicators (cont...)Landsideaccessrevenue($million)Landsideaccessrevenue as% of totalairportrevenue(%)Passengerrating foravailabilityof airportcar parkingPassengerrating forstandard ofairport carparkingPassengerrating fortime takento enterairport carpark2010-11 5.3 1.2% 3.86 3.82 3.702011-12 5.8 1.2% 4.02 4.28 4.23%change ▲ 9.2% 0.0% ▲ 4.0% ▲ 12.1% ▲ 14.3%130Parking prices are the drive-up rates. Discounted online rates are also available.
  • 195. Brisbane Airport monitoring results Airport Monitoring Report 2011-121705.2 Airport overview and major airport investmentsThis section presents information about Brisbane Airport, along with activity and investment in2011-12. This includes: passenger/traffic mix (section 5.2.1); terminal configurations and carparking facilities (section 5.2.2); and major airport investments (section 5.2.3).5.2.1 Passenger / traffic mixIn 2011-12 just over 21 million passengers travelled through Brisbane Airport. Almost78 per cent of these were travelling domestically, while just over 21 per cent were internationalpassengers (chart 5.2.1).Chart 5.2.1: Brisbane Airport passenger mix, 2011-125.2.2 Terminal configurations and car parking facilitiesTerminal configurationsBrisbane Airport has one international terminal and one domestic terminal:• the international terminal is a common-user terminal used by all airlines flying internationalto and from Brisbane Airport. This terminal is subject to monitoring and is included in theACCC’s monitoring results.• the majority of the domestic terminal is occupied and operated by Qantas and VirginAustralia under domestic terminal leases (DTLs). These areas are not subject to monitoringand therefore data on passenger-related services and facilities provided within theseterminals are not included in the ACCC’s monitoring results.• the common-user area within the domestic terminal is predominantly used by Jetstar andTiger Airways, and is subject to monitoring and is included in the monitoring results.77.9%21.1%0.9%0.1%DomesticpassengersInternational passengers(excluding transit passengers)International transit passengersDomesticon-carriage
  • 196. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results171It should be noted that, as most of the domestic terminal is occupied under DTLs, airlinesurveys are not available for all quality of service measures of Brisbane Airport’s domesticterminal presented in section 5.4.Car parking facilitiesBrisbane Airport provides three car parking facilities: a new combined short-term and long-termcar park, along with the existing long-term car park, both located near its domestic terminal;and a combined short-term and long-term car park located in front of its international terminal.5.2.3 Major airport investmentsAeronautical services and facilitiesBrisbane Airport advised it completed two major aeronautical investment projects in 2011-12:• Expansion of the Common User Satellite. This upgrade increased the number of passengergate holding lounges from four to nine, as well as adding two additional aircraft parkingbays, bringing the total to seven for the Common User Satellite (and to nine for theCommon User area). The airport also added new food and beverage facilities close to thenew passenger lounges.• The domestic terminal Skywalk was completed in March 2012. This is an undercoverelevated walkway between the domestic terminal car park (including the new car park) andthe terminal. It also provides pedestrian access to the train. The walkway reduces the needfor pedestrians to cross the roads across the face of the terminal, with the aim of improvingaccess and safety, as well as reducing congestion.Brisbane Airport also completed a number of other improvements to both the international anddomestic terminals in 2011-12:• Upgraded seating in the international terminal including in the southern and northernconcourses, and level 3 and level 4 lounge areas.• The number of transfer check-in desks at level 2 of the international terminal was increasedfrom four to six to cater for growing demand of international travellers connecting todomestic flights.• Bathroom facilities on level 2 in the common user area of the domestic terminal wereupgraded to the same standard as in the new Common User Satellite.• The number of flight information displays was increased in the common user area of thedomestic terminal. New flight information displays were also installed in the new multi-levelcar park and Skywalk. The airport also undertook other measures to improve wayfinding.• In 2011-12 Brisbane Airport replaced the existing lighting and installed modern and efficientnew lighting across the common user area of the domestic terminal.• Lift access was improved in the domestic terminal.
  • 197. Brisbane Airport monitoring results Airport Monitoring Report 2011-12172Brisbane Airport has advised that it had four major aeronautical investment projects under wayin 2011-12:• At the international northern apron, Brisbane Airport is in the final stages of construction offour narrow-body aircraft bays, which could also be used to park two wide-body aircraft,depending on fleet requirements. Initially these will be used as contingency lay-over baysbut will ultimately be used as operational bays to process passengers.• The airport is also in the final stages of construction of eight narrow-body aircraft bays atthe domestic northern apron. These will be able to be used as contingency lay-over baysor remote active bays with passengers carried by bus from the terminal. The airportcompleted these additional narrow-body remote bays in August 2012.• Brisbane Airport is expanding the domestic southern apron to cater for rapidly increasingaircraft demand, particularly in regional traffic. The airport has recently received approval tofor this expansion and expects it to be completed in 2014.• Common-user bag-drop facilities have been installed and are being trialled at the domesticterminal common-user terminal check-in area. The trial is being conducted by BrisbaneAirport and industry partners including airlines, the baggage handling operator and SITA –a specialist in air transport communications and information technology. If the trial issuccessful, the airport plans to install additional bag-drop and check-in facilities with theaim of increasing capacity. The airport is investigating further options to increase baggagereclaim capacity in this area.Brisbane Airport advised it had two major aeronautical investment projects that are planned tocommence in 2012-13:• A new parallel runway (NPR) is needed to address continuing growth in demand, which isexpected to exceed the current runway system’s capacity sometime between 2013 and2015. The airport has completed the detailed design for the first construction phase, andhas commenced civil works on the site. The NPR is expected to be completed in 2020.• Brisbane Airport is considering a new southern terminal to be serviced by the expandedsouthern apron that is to be constructed. The proposed southern terminal wouldaccommodate growth in resource-related and regional passenger movements. The airportis currently reviewing its Domestic Terminal Development Strategy and expects to finalisethis, along with plans for the proposed southern terminal, in 2013.Car parking and landside access servicesBrisbane Airport advised it completed one major car parking investment project in 2011-12:• A new domestic terminal multi-level car park was completed in March 2012, providing morethan 5000 additional undercover parking spaces.Brisbane Airport advised it had one major landside access investment project under way in2011-12:• The passenger pick-up and terminal face roads project includes construction of new roadsacross the face of the domestic terminal to facilitate better passenger drop-off and pick-up;and construction of a free passenger pick-up area including a walkway to access theSkywalk and terminal. These roads were completed in September 2012.
  • 198. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results1735.3 Aeronautical prices monitoring and financialperformance resultsIn this section prices monitoring and financial reporting results are presented for aeronauticalservices. This includes: activity levels (section 5.3.1); prices (section 5.3.2); revenues, costsand profits (section 5.3.3); average revenues, costs and profits (section 5.3.4); governmentmandated security services (section 5.3.5); assets (section 5.3.6); and rates of return ontangible non-current assets (section 5.3.7).5.3.1 ActivityChart 5.3.1: Brisbane Airport—volume of passengers, tonnes landed and aircraftmovements, 2001-02 to 2011-12131Key observations from chart 5.3.1 include:• The number of passengers, tonnes landed and aircraft movements all increased atBrisbane Airport in 2011-12.• Passenger numbers increased from around 20.3 million in 2010-11 to 21.2 million in2011-12 (4.6 per cent). The number of domestic passengers (including domesticon-carriage passengers) increased by 4.6 per cent to 16.5 million in 2011-12, whileinternational passengers (including international transit passengers) rose by 4.9 per cent to4.7 million.• Since 2001-02, the number of passengers passing through the airport increased by72.1 per cent from 12.3 million. The largest increase in passenger throughput occurred in2003-04, when passenger numbers increased by 16.5 per cent. Domestic passenger131Data in chart 5.3.1 is not comparable to chart 5.2.1 as international transit passengers have been included asinternational passengers and domestic on-carriage passengers have been included as domestic passengers.02040608010012014016018020022002 0004 0006 0008 00010 00012 00014 00016 00018 00020 00022 0002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Numberofaircraftmovements(thousand)Numberofpassengers/tonneslanded(thousand)DomesticPassengers International Passengers Tonnes landed Aircraft movements(RHS)
  • 199. Brisbane Airport monitoring results Airport Monitoring Report 2011-12174numbers rose by 73.9 per cent over the period, while international passengers were up by65.8 per cent.• In 2011-12, tonnes landed at Brisbane Airport increased by 4.2 per cent to 7.5 milliontonnes. Tonnes landed increased by 46.9 per cent over the 11 years since 2001-02.• Aircraft movements increased from 190 402 in 2010-11 to 204 296 movements in 2011-12(7.3 per cent). Since 2001-02, aircraft movements have increased by 35.5 per cent.5.3.2 PricesTable 5.3.1 presents the average aeronautical charges at Brisbane Airport from 2007-08 to2011-12 as well as the indexed average list prices for that period (with 2007-08 as the baseyear).132132Where a list price changed during the financial year, the average of that charge has been reported in the table.
  • 200. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results175Table 5.3.1: Brisbane Airport—schedule of aeronautical charges and indexed average list prices (including GST), 2007-08 to 2011-12Average list prices($)Indexed average list prices(2007-08 base year = 100)2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12Aircraft-related chargesDomestic landing fees (per passenger) 3.49 3.49 4.59 4.59 4.59 100.0 100.0 131.5 131.5 131.5Freight landing fees (per MOTW) 12.07 12.07 12.07 12.07 12.07 100.0 100.0 100.0 100.0 100.0General aviation landing fees (per MTOW) 12.07 12.07 12.07 12.07 12.07 100.0 100.0 100.0 100.0 100.0Rotary wing landing fees (per MTOW) 6.95 6.95 7.50 7.50 7.50 100.0 100.0 107.9 107.9 107.9International private charter and non scheduled airservice landing fee (per MTOW)12.07 12.07 12.07 12.07 12.07 100.0 100.0 100.0 100.0 100.0Aircraft parking fees (per 24 hours or part thereof)—excluding GST0 to 5 000kg 30.00 30.00 30.00 30.00 30.00 100.0 100.0 100.0 100.0 100.05 001 to 20 000kg 50.00 50.00 50.00 50.00 50.00 100.0 100.0 100.0 100.0 100.020 001 to 40 000kg 75.00 75.00 75.00 75.00 75.00 100.0 100.0 100.0 100.0 100.040 001 to 100 000kg 120.00 120.00 120.00 120.00 120.00 100.0 100.0 100.0 100.0 100.0100 001 to 250 000kg 275.00 275.00 275.00 275.00 275.00 100.0 100.0 100.0 100.0 100.0250 001 to 400 000kg 400.00 400.00 400.00 400.00 400.00 100.0 100.0 100.0 100.0 100.0400 001kg + 530.00 530.00 530.00 530.00 530.00 100.0 100.0 100.0 100.0 100.0Noise surcharge (applies to all aviation charges) 25% 25% 25% 25% 25% 100.0 100.0 100.0 100.0 100.0
  • 201. Brisbane Airport monitoring results Airport Monitoring Report 2011-12176Average list prices($)Indexed average list prices(2007-08 base year = 100)2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12Terminal chargesInternational passenger service charge (per passenger) 16.50 22.55 24.33 25.43 26.10 100.0 136.7 147.5 154.1 158.2Domestic passenger service charge common userterminal—including aerobridge (per passenger)2.75 2.75 3.74 4.57 4.73 100.0 100.0 136.0 166.0 172.0Domestic passenger service charge common userterminal—excluding aerobridge (per passenger)2.20 2.20 3.19 4.02 4.18 100.0 100.0 145.0 182.5 190.0Government mandated security chargesInternational passenger government mandated securitycharge (per passenger)4.08 5.07 5.28 3.64 3.72 100.0 124.3 129.4 89.2 91.2Domestic passenger government mandated securitycharge common user terminal (per passenger)2.29 1.75 3.06 2.01 1.72 100.0 76.4 133.7 87.8 75.2Domestic passenger government mandated securitycharge Qantas/Virgin terminal (per passenger)0.23 0.19 0.20 0.14 0.12 100.0 81.0 85.7 59.5 51.9Notes: Due to data revision in 2011-12, table 5.3.1 is not comparable with equivalent table in previous ACCC Airport Monitoring Reports.International landing fee is included in the International passenger service charge (per passenger).
  • 202. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results177Key observations from table 5.3.1 include:• Landing fees, aircraft parking fees and the noise surcharge remained unchanged in2011-12 while terminal charges for international and domestic passengers increased.Government mandated security charges increased for international passengers anddecreased for domestic passengers.• Brisbane Airport had in place a formal five-year pricing agreement for aircraft-relatedservices and facilities with the airlines which expired on 30 June 2012. This agreement wascommercially negotiated with airlines and set out the approach to establishing andadjusting prices• Brisbane Airport has advised the ACCC of the following:− After a long period of negotiations, Brisbane Airport Corporation notified airlines ofthe charges to apply at Brisbane Airport from 1 September 2012. The majority ofairlines are paying published charges. BAC has adopted the same pricingmethodology that has been used for the previous 10 years (with airlines agreeingto, and paying, those prices) – in other words the ACCC’s building blockmethodology, using the ‘line in the sand (historic) asset values’ with price increasesas investment is incurred. The principal concern of some of the airlines is thatbecause the runway is a high value project ($1.3 billion) being delivered over anumber of years, that the previously accepted methodology should no longer beused. Discussions are continuing with the airlines.• In 2011-12 domestic landing fees increased by 10.1 per cent to $4.59 per passenger.These fees accounted for 25.3 per cent of total aeronautical revenue in 2011-12.• In July 2007, Brisbane Airport introduced a 25 per cent noise surcharge on ‘marginallycompliant aircraft’ that applies to all aviation charges associated with the use of the runwayand taxiway system and aprons by such aircraft. This surcharge was introduced toencourage operators to move away from noisier aircraft at Brisbane Airport. As of1 September 2010, older noisy jet aircraft were banned from major Australian airports.133• The international passenger service charge increased from $25.43 per passenger in2010-11 to $26.10 per passenger in 2011-12 (2.6 per cent). This charge has increasedevery year over the five years since 2007-08, an increase of 58.2 per cent. In 2011-12revenue from the international passenger service charge made the largest contribution tototal aeronautical revenue at 49.4 per cent.• Domestic passenger service charges for the common user terminal including an aerobridgeincreased from $4.57 per passenger in 2010-11 to $4.73 per passenger in 2011-12(3.6 per cent). Excluding an aerobridge, this charge increased by 4.1 per cent to$4.18 per passenger in 2011-12. Combined, these service charges accounted for14.2 per cent of total aeronautical revenue in 2011-12.• International passenger government mandated security charges increased from $3.64 perpassenger in 2010-11 to $3.72 in 2011-12 (2.2 per cent). The domestic passengergovernment mandated security charges decreased by 14.4 per cent (to $1.72 perpassenger) for the common user terminal and by 12.8 per cent (to $0.12) for theQantas/Virgin Australia terminal. Brisbane Airport has previously noted that securitycharges are set to recover costs; any over- or under-recovery in a period is factored intoprices for the following period.133A Albanese, Minister for Infrastructure and Transport, Government to ban old, noisy freight jets, media release, 29March 2010.
  • 203. Brisbane Airport monitoring results Airport Monitoring Report 2011-121785.3.3 Revenues, costs and profits for aeronautical and total airportservicesAs noted, the ACCC required airport operators to provide additional information relating to theaeronautical asset base under the ‘line in the sand’ (LIS) approach for the first time in 2007-08.Under this approach, the value of an airport’s aeronautical asset base for monitoring purposesis the value of tangible non-current aeronautical assets reported to the ACCC as at30 June 2005, plus new investments, less depreciation and disposals. This chapter separatelyreports LIS measures for Brisbane Airport where applicable. The starting LIS asset basefigures for Brisbane Airport are detailed in the appendices.Table 5.3.2 outlines the revenues, operating expenses and operating margins for aeronauticalservices and the total airport from 2001-02 to 2011-12, while table 5.3.3 outlines the revenues,operating expenses and operating margins for aeronautical services under the LIS approachfrom 2007-08 to 2011-12.
  • 204. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results179Table 5.3.2: Brisbane Airport—revenues, operating expenses and operating margins for aeronautical services and for total airport services,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue ($million) Aeronautical 45.3 62.7 71.6 86.3 95.8 106.0 141.6 163.5 180.2 198.5 212.4Total airport 146.9 169.1 193.0 245.0 315.1 332.6 393.4 381.8 423.5 456.5 486.1Operating expenses ($million) Aeronautical 47.3 50.1 55.1 67.1 72.6 72.9 87.4 105.4 109.8 115.5 117.6Total airport 72.1 76.4 84.0 101.6 110.1 116.7 138.4 168.8 175.8 189.4 198.1Operating margin($million)Aeronautical (2.1) 12.6 16.4 19.2 23.2 33.0 54.2 58.1 70.4 83.0 94.8Total airport 74.8 92.7 109.0 143.4 205.0 215.9 254.9 213.0 247.9 267.2 288.0Operating margin as a % ofrevenueAeronautical (4.6) 20.1 23.0 22.3 24.2 31.2 38.3 35.5 39.1 41.8 44.7Total airport 50.9 54.8 56.5 58.5 65.1 64.9 64.8 55.8 58.5 58.5 59.3Table 5.3.3: Brisbane Airport—revenues, operating expenses and operating margins for aeronautical services under the LIS approach,2007-08 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue ($million) Aeronauticalunder the LISNA NA NA NA NA NA 141.6 163.5 180.2 198.5 212.4Operating expenses ($million) Aeronauticalunder the LISNA NA NA NA NA NA 82.3 101.8 106.2 110.7 112.9Operating margin($million)Aeronauticalunder the LISNA NA NA NA NA NA 59.2 61.7 74.0 87.9 99.5Operating margin as a % ofrevenueAeronauticalunder the LISNA NA NA NA NA NA 41.9 37.7 41.1 44.3 46.9
  • 205. Brisbane Airport monitoring results Airport Monitoring Report 2011-12180Key observations from tables 5.3.2 and 5.3.3 include:• Aeronautical revenue, operating expenses and operating margin all increased at BrisbaneAirport in 2011-12.• Revenue from aeronautical services increased by $13.9 million (7.0 per cent) in 2011-12.Over the past 11 years, aeronautical revenue increased by 369.4 per cent. The largestannual percentage increase over this period was 38.5 per cent ($17.4 million) in 2002-03.• Total airport revenue increased in 2011-12 by 6.5 per cent. Over the 11 years since2001-02 revenue rose from $146.9 million to $486.1 million.• Aeronautical operating expenses increased by $2.0 million (1.8 per cent) in 2011-12. Thisfollowed an increase in the previous year of 5.3 per cent. Over the 11 years since 2001-02,aeronautical operating expenses increased by 148.5 per cent.− Under the LIS approach, aeronautical operating expenses increased by2.0 per cent, from $110.7 million in 2010-11 to $112.9 million in 2011-12.− Operating expenses were lower under the LIS approach compared to the non-LISapproach due to lower depreciation expenses. In 2011-12, depreciation of tangiblenon-current assets was $39.5 million under the LIS approach, which was$4.7 million lower than under the non-LIS approach.• In 2011-12, operating expenses for the total airport increased by 4.6 per cent to$198.1 million. Since 2001-02, operating expenses for the total airport increased by174.6 per cent.• As a result of revenue from aeronautical services increasing at a faster rate than operatingexpenses, aeronautical operating margin increased by $11.9 million (14.3 per cent) in2011-12. From 2001-02 to 2011-12, Brisbane Airport’s operating margin from aeronauticalservices increased from $-2.1 million to $94.8 million.− Under the LIS approach, the aeronautical operating margin increased by13.3 per cent, from $87.9 million in 2010-11 to $99.5 million in 2011-12. This was$4.7 million higher than the aeronautical operating margin under the non-LISapproach.
  • 206. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results181Chart 5.3.2: Brisbane Airport—aeronautical services and non-aeronautical servicesshare of total airport revenue, 2001-02 to 2011-12Key observations from chart 5.3.2 include:• Aeronautical revenue as a proportion of total airport revenue increased slightly in 2011-12,to 43.7 per cent. This was the highest percentage of the 11 years since 2001-02.• In contrast, in 2001-02 the proportion of aeronautical revenue to total airport revenue was30.8 per cent.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—aeronautical Revenue—non-aeronautical
  • 207. Brisbane Airport monitoring results Airport Monitoring Report 2011-121825.3.4 Average revenues, costs and profits for aeronautical servicesChart 5.3.3: Brisbane Airport—revenues, operating expenses and operating marginsfor aeronautical services on a per passenger basis, 2001-02 to 2011-12Key observations from chart 5.3.3 include:• Aeronautical revenue and operating margin on a per passenger basis increased atBrisbane Airport in 2011-12, while operating expenses per passenger decreased.• Aeronautical revenue per passenger increased from $9.80 in 2010-11 to $10.02 in 2011-12(2.2 per cent). Since 2001-02, aeronautical revenue per passenger has increased by172.8 per cent, from $3.67. Over the same period, passenger numbers increased by72.1 per cent.• Operating expenses per passenger for aeronautical services decreased by 2.8 per cent in2011-12 to $5.55 per passenger, from $5.70 in 2010-11. Operating expenses on a perpassenger basis increased by 44.4 per cent over the 11 years since 2001-02.• Aeronautical operating margin per passenger increased from $4.10 in 2010-11 to $4.47 in2011-12 (9.2 per cent). In contrast, in 2001-02 aeronautical operating margin perpassenger was $-0.17.-$1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00$10.00$11.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerRevenue Expenses Margin
  • 208. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results183Chart 5.3.4: Brisbane Airport—revenues, operating expenses and operating marginsfor aeronautical services under the line in the sand (LIS) approach on aper passenger basis, 2007-08 to 2011-12Key observations from chart 5.3.4 include:• Under the LIS approach, aeronautical operating expenses on a per passenger basisdecreased in 2011-12, while operating margin per passenger increased.• Operating expenses for aeronautical services under the LIS approach decreased to $5.33per passenger in 2011-12, from $5.46 per passenger in 2010-11. This compares to $5.55per passenger under the non-LIS approach. The difference was due to lower depreciationexpenses using LIS.• Aeronautical operating expenses per passenger have increased by 21.5 per cent over thefive-year period since 2007-08.• As a result of operating expenses decreasing and revenue increasing, aeronauticaloperating margin per passenger increased from $4.34 in 2010-11 to $4.70 in 2011-12(8.2 per cent). Under the non-LIS approach the margin was lower at $4.47 as a result ofhigher depreciation expense.• Since 2007-08, aeronautical operating margin per passenger increased by 48.9 per cent.5.3.5 Government mandated security servicesGovernment mandated security charges are directly related to the government mandatedsecurity levels. Brisbane Airport advised that no margin is made from these activities, with over-or under-recoveries being taken into consideration when calculating the following year’ssecurity charges.Table 5.3.4 outlines the revenues, operating expenses and operating margins for governmentmandated security services and aeronautical services from 2001-02 to 2011-12. It should benoted that the expenses do not include interest or finance costs on leased assets related tomandated security.$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00$10.00$11.002007–08 2008–09 2009–10 2010–11 2011–12PerpassengerRevenue under the LIS Expensesunderthe LIS Margin under the LIS
  • 209. Brisbane Airport monitoring results Airport Monitoring Report 2011-12184Table 5.3.4: Brisbane Airport—revenues, operating expenses and operating margins from government mandated security services andaeronautical services, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue($million)Security services 9.0 9.5 12.0 16.6 17.8 17.3 25.7 26.7 24.0 21.0 21.6Total aeronautical 45.3 62.7 71.6 86.3 95.8 106.0 141.6 163.5 180.2 198.5 212.4Operatingexpenses($million)Security services 7.5 8.0 10.5 16.2 20.6 17.6 23.0 26.7 20.7 21.0 21.6Total aeronautical 47.3 50.1 55.1 67.1 72.6 72.9 87.4 105.4 109.8 115.5 117.6Operating margin($million)Security services 1.5 1.5 1.5 0.3 (2.8) (0.3) 2.7 0.0 3.3 0.0 0.0Total aeronautical (2.1) 12.6 16.5 19.2 23.2 33.0 54.2 58.1 70.4 83.0 94.8Revenue perpassenger($)Security services 0.73 0.77 0.83 1.04 1.08 0.97 1.37 1.40 1.25 1.04 1.02Total aeronautical 3.67 5.08 4.98 5.43 5.83 5.94 7.54 8.56 9.36 9.80 10.02Operating expenseper passenger($)Security services 0.61 0.65 0.73 1.02 1.25 0.99 1.22 1.40 1.08 1.04 1.02Total aeronautical 3.84 4.06 3.83 4.22 4.42 4.09 4.65 5.52 5.70 5.70 5.55Operating marginper passenger($)Security services 0.12 0.12 0.11 0.02 (0.17) (0.02) 0.14 0.00 0.17 0.00 0.00Total aeronautical (0.17) 1.02 1.14 1.21 1.41 1.85 2.88 3.04 3.66 4.10 4.47Note: Brisbane Airport has advised that it does not aim to earn a profit from government mandated security services. Any positive or negative margin in any one year is negated by making theappropriate decrease or increase to charges (and hence revenue) in the following year.
  • 210. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results185Key observations from table 5.3.4 include:• Total security revenue increased from $21.0 million in 2010-11 to $21.6 million in 2011-12(3.0 per cent). Over the 11 years since 2001-02, total security revenue increased by139.6 per cent. This is primarily due to increased government mandated security measuresimplemented during this period.• Since 2007-08 government mandated security charges for international passengerswere virtually unchanged, while the charges for domestic passengers decreased(see table 5.3.1). Over this same period total security revenue decreased by15.8 per cent.• As a result of passenger volumes increasing at a faster rate (4.7 per cent) than securityrevenue (3.0 per cent), security revenue on a per passenger basis decreased by1.6 per cent in 2011-12. Security revenue per passenger increased by 39.2 per cent overthe 11 years since 2001-02.• Total security expenses increased from $21.0 million in 2010-11 to $21.6 million in 2011-12(2.9 per cent). Over the 11 years since 2001-02, total security expenses increased by187.8 per cent due to increased security measures implemented during this period.• Operating security margins were zero in 2011-12, as they were also in 2010-11. Since2001-12, operating security margins have ranged from $-2.8 million in 2005-06 to$3.3 million in 2009-10. The average margin in the 11 year period since 2001-02 is$0.7 million. On a per passenger basis, the margin has ranged from $-0.17 (2005-06) to$0.17 (2009-10) with an average of $0.04 per passenger.Chart 5.3.5: Brisbane Airport—government mandated security services share of totalaeronautical services revenue, 2001-02 to 2011-12Key observations from chart 5.3.5 include:• Security revenue as a percentage of aeronautical revenue decreased by 0.4 percentagepoints in 2011-12 to 10.2 per cent, the lowest over the 11 years since 2001-02. Securityrevenue as a percentage of aeronautical revenue is now 9.8 percentage points lower thanin 2001-02 when it was 20.0 per cent.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—aeronautical (excl. security) Revenue—security
  • 211. Brisbane Airport monitoring results Airport Monitoring Report 2011-12186• Security expenses as a proportion of aeronautical operating expenses increased from18.2 per cent in 2010-11 to 18.4 per cent in 2011-12. Since 2001-02 the proportion ofsecurity expenses to aeronautical operating expenses has increased by 2.5 percentagepoints.Chart 5.3.6: Brisbane Airport—aeronautical services revenue, operating expensesand operating margin excluding government mandated security serviceson a per passenger basis, 2001-02 to 2011-12Key observations from chart 5.3.6 include:• Excluding government mandated security services, aeronautical revenue and operatingmargin on a per passenger basis increased at Brisbane Airport in 2011-12, while operatingexpenses per passenger decreased.• Excluding government mandated security services, aeronautical revenue per passengerincreased from $8.76 in 2010-11 to $9.00 in 2011-12 (2.7 per cent). Over the 11 yearssince 2001-02, aeronautical revenue per passenger increased by 206.1 per cent. Over thesame period, passenger numbers increased by 72.1 per cent.• Operating expenses for aeronautical services excluding government mandated securityservices decreased by 3.0 per cent in 2011-12, from $4.67 per passenger in 2010-11 to$4.53 per passenger. Aeronautical operating expenses per passenger have increased by40.1 per cent over the reporting period since 2001-02.• As a result of revenue increasing and operating expenses decreasing (excluding securityservices), operating margin per passenger increased from $4.10 in 2010-11 to $4.47 in2011-12 (9.0 per cent). This compares with an aeronautical operating margin perpassenger of $-0.29 in 2001-02.5.3.6 Assets for aeronautical and total airport servicesTable 5.3.5 outlines Brisbane Airport’s tangible non-current assets for aeronautical servicesand the total airport from 2001-02 to 2011-12, while table 5.3.6 outlines Brisbane Airport’stangible non-current assets for aeronautical services under the LIS approach from 2007-08 to2011-12.-$2.00$0.00$2.00$4.00$6.00$8.00$10.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerRevenue Expenses Margin
  • 212. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results187Table 5.3.5: Brisbane Airport—tangible non-current assets for aeronautical services and total airport services, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Investmentproperty($million)Aeronautical 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Total airport 0.0 0.0 0.0 320.4 413.3 475.3 574.0 666.7 705.6 793.4 892.5Land($million)Aeronautical 36.8 42.5 35.1 17.9 17.7 18.2 18.0 18.3 17.9 17.7 18.3Total airport 188.3 128.1 107.5 60.1 59.5 58.8 58.1 57.5 56.8 56.2 55.2Property, plant andequipment($million)Aeronautical 533.7 528.7 527.1 893.4 900.3 963.9 1 188.0 1 342.2 1 299.9 1 315.5 1 418.9Total airport 695.9 759.9 788.0 1 102.6 1 094.7 1 229.9 1 567.2 1 723.8 1 782.8 1 888.4 2 034.4Intangibles($million)Aeronautical 0.0 28.6 31.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Total airport 639.8 633.0 626.2 823.0 823.0 823.0 823.0 823.0 823.0 823.0 823.0Other tangiblenon-current assets($millon)Aeronautical 3.8 3.5 5.9 (19.4) 2.9 36.6 62.3 41.0 3.9 16.3 0.0Total airport 10.2 8.8 15.1 (44.3) 7.7 96.7 157.5 101.9 9.3 42.6 0.0Total tangible non-current assets($million)Aeronautical 574.3 574.6 568.1 891.9 920.9 1 018.7 1 268.2 1 401.5 1 321.7 1 349.5 1 437.2Total airport 894.3 896.7 910.6 1 438.8 1 575.1 1 860.7 2 356.7 2 549.8 2 554.5 2 780.6 2 982.0Total non-currentassets($million)Aeronautical 574.3 603.3 600.0 891.9 920.9 1 018.7 1 268.2 1 401.5 1 321.7 1 349.5 1 437.2Total airport 1 534.1 1 529.7 1 536.8 2 261.8 2 398.1 2 683.8 3 179.8 3 372.8 3 377.5 3 603.6 3 805.0
  • 213. Brisbane Airport monitoring results Airport Monitoring Report 2011-12188Table 5.3.6: Brisbane Airport—tangible non-current assets for aeronautical services under the line in the sand (LIS) approach,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Investmentproperty($million)Aeronautical underthe LISNA NA NA NA NA NA 0.0 0.00 0.00 0.00 0.00Land($million)Aeronautical underthe LISNA NA NA NA NA NA 25.4 25.9 25.5 25.3 26.0Property, plant andequipment($million)Aeronautical underthe LISNA NA NA NA NA NA 825.8 983.0 944.5 966.2 1,074.4Intangibles($million)Aeronautical underthe LISNA NA NA NA NA NA 0.0 0.0 0.0 0.0 0.0Other tangiblenon-current assets($millon)Aeronautical underthe LISNA NA NA NA NA NA 0.0 41.0 3.9 16.3 0.0Total tangible non-current assets($million)Aeronautical underthe LISNA NA NA NA NA NA 851.2 1,050.0 973.8 1 ,007.7 1 100.4Total non-currentassets($million)Aeronautical underthe LISNA NA NA NA NA NA 851.2 1,050.0 973.8 1 007.7 1 100.4
  • 214. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results189Key observations from tables 5.3.5 and 5.3.6 include:• The total value of aeronautical tangible non-current assets at Brisbane Airport increased by6.5 per cent, from $1349.5 million in 2010-11 to $1437.2 million in 2011-12. Notably,Brisbane Airport did not report any aeronautical intangible assets in the period. Since2001-02, the value of aeronautical tangible non-current assets has increased by150.3 per cent due to the increased investment in airport infrastructure over the period.• The increase in aeronautical tangible non-current assets in 2011-12 was partlyattributable to an increase in property, plant and equipment from $1315.5 million in2010-11 to $1418.9 million in 2011-12 (7.9 per cent). The value of land increased by3.4 per cent to $18.3 million. The value of other non-current assets fell from$16.3 million in 2010-11 to zero in 2011-12. Brisbane Airport has advised that thisasset was a hedge portfolio which, due to interest and foreign exchange rate changes,moved from being an asset to a liability.• In 2011-12 depreciation of aeronautical tangible non-current assets totalled $44.2 million.This compares with depreciation of $41.5 million in 2010-11. Since 2001-02, depreciationof aeronautical tangible non-current assets increased by 226.7 per cent, from $19.4 million.• In 2011-12 Brisbane Airport completed three major construction projects, which would havesignificantly contributed to the increase in the value of assets. There was an expansion ofthe Common User Satellite and a pedestrian access bridge to the domestic terminal(Skywalk), both of which are aeronautical assets. There was also a multi-level car park forthe domestic terminal which is a non-aeronautical asset.• The value of total airport tangible non-current assets increased by 7.3 per cent to$2982.0 million in 2011-12. Since 2001-02, the value of total airport tangible non-currentassets increased by 233.4 per cent.• In 2011-12 depreciation of total airport tangible non-current assets was $66.0 million. Thiscompares with depreciation of $59.9 million in 2010-11. Since 2001-02, depreciation oftotal airport tangible non-current assets increased by 136.1 per cent.• Under the LIS approach, the value of tangible aeronautical non-current assets increased by9.2 per cent in 2011-12, to $1100.4 million. The value of land under this approachincreased by 2.8 per cent to $26.0 million. The value of property, plant and equipment rosein 2011-12 by 11.2 per cent to $1074.4 million.• Compared to the non-LIS approach, the value of tangible aeronautical non-current assetsunder the LIS approach were lower by $336.8 million in 2011-12. This is partly explained byrevaluations that were excluded under the LIS approach since 2007-08. In 2011-12 therewere revaluations of tangible non-aeronautical non-current assets to the value of$85.4 million.• From 2007-08 to 20011-12, depreciation expense on aeronautical assets under the LISapproach increased by 66.7 per cent to $39.5 million.
  • 215. Brisbane Airport monitoring results Airport Monitoring Report 2011-12190Chart 5.3.7: Brisbane Airport—additions as a percentage of tangible non-currentassets for aeronautical and total airport services, 2001-02 to 2011-12Key observations from chart 5.3.7 include:• Prior to 2006-07, annual additions to assets were mostly less than 5 per cent of bothaeronautical and total airport tangible non-current assets. In subsequent years there was asignificant increase in additions.• In 2011-12, additions to aeronautical tangible non-current assets represented around10.8 per cent of total aeronautical tangible non-current assets. Additions to aeronauticalassets include the expansion of the Common User Satellite and an elevated walkway(Skywalk) linking a newly constructed car park to the domestic terminal. Over the period2001-02 to 2011-12 the peak annual value of additions was 19.5 per cent in 2007-08.Brisbane Airport advised this peak was due to the international terminal expansion.• Additions to total airport tangible non-current assets as a percentage of total airporttangible non-current assets decreased from a high of 18 per cent in 2007-08 to 7.5 per centin 2011-12. Impacting on this was a major non-aeronautical project completed in 2011-12:a new multi-level car park.0%5%10%15%20%25%2001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentAeronautical services Total airport
  • 216. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results1915.3.7 Rates of return on tangible non-current assetsChart 5.3.8: Brisbane Airport—rate of return (EBITA) on tangible non-current assetsfor aeronautical services and total airport services, 2001-02 to 2011-12Key observations from chart 5.3.8 include:• Earnings before interest, tax and amortisation (EBITA) on average tangible non-currentassets for aeronautical services increased in 2011-12, while it was virtually unchanged fortotal airport services.• EBITA on average tangible non-current assets for aeronautical services increased from6.2 per cent in 2010-11 to 6.8 per cent in 2011-12 as a result of a relatively greaterincrease in EBITA (14.3 per cent) than the increase in the value of tangible non-currentassets (6.5 per cent) (as shown in table 5.3.5).• In 2001-02, EBITA on average tangible non-current assets for aeronautical serviceswas -0.4 per cent. From 2001-02 to 2011-12, EBITA on average tangible non-currentassets for aeronautical services increased by 7.2 percentage points. This increase canlargely be attributed to the significant increase in operating margin, from $-2.1 million in2001-02 to $94.8 million in 2011-12, while assets rose proportionally less, from$574.3 million to $1473.2 million.• In 2011-12 EBITA on average tangible non-current assets for total airport services wasvirtually unchanged at 10.0 per cent. Over the five-years since 2007-08, EBITA on totalairport average tangible non-current assets decreased by 2.1 percentage points. EBITA fortotal airport services increased by 13.0 per cent over the same period, while total airporttangible non-current assets increased by 26.5 per cent.-2024681012142001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentperannumAeronautical services Total airport
  • 217. Brisbane Airport monitoring results Airport Monitoring Report 2011-12192Chart 5.3.9: Brisbane Airport—rate of return (EBITA) on tangible non-current assetsfor aeronautical services under the line-in-the-sand (LIS) approach andthe total airport services, 2007-08 to 2011-12Key observations from chart 5.3.9 include:• Under the LIS approach, EBITA on average tangible non-current assets for aeronauticalservices also increased in 2011-12.• EBITA on average tangible non-current assets for aeronautical services increased from8.9 per cent in 2010-11 to 9.4 per cent in 2011-12.• Since 2007-08, EBITA on average tangible non-current assets for aeronautical servicesincreased by 1.4 percentage points. This increase can largely be attributed to increasesin aeronautical revenue and lower expenses (as shown in table 5.3.1).• Over the five years since 2007-08, EBITA on average tangible non-current assets for thetotal airport fell by 3.7 percentage points.• Rates of return on aeronautical tangible non-current assets under LIS approach are higherthan under non-LIS approach. The difference is largely explained by the facts that EBITA ishigher under the LIS approach because expenses are lower while total assets are lowerunder LIS approach due to the exclusion of asset revaluations undertaken since 2005-06(as shown in tables 5.3.1 and 5.3.4).03691215182007–08 2008–09 2009–10 2010–11 2011–12PercentperannumAeronauticalservices Total airport
  • 218. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results1935.4 Aeronautical services quality of servicemonitoring resultsIn this section, the quality of service monitoring results are presented for average ratings(section 5.4.1), international services (section 5.4.2) and domestic services (section 5.4.3).Other airport services are discussed in section 5.4.4.5.4.1 Average ratings for quality of serviceChart 5.4.1: Brisbane Airport—average quality of service ratings for international anddomestic terminal services and other airport services, 2007-08 to 2011-12Key observations from chart 5.4.1 include:• Over the five-year reporting period, Brisbane Airport’s average quality of service rating forinternational terminal services increased from satisfactory in 2007-08 to good in each of thesubsequent years.• Brisbane Airport’s average quality of service rating for domestic terminal services was gooduntil 2011-12 when it decreased to satisfactory (or just below good).• The average quality of service rating for other airport services was satisfactory over theentire five-year period.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of international terminal Rating of domestic terminal Rating of other airport servicesExcellentGoodPoorVery poorSatisfactory
  • 219. Brisbane Airport monitoring results Airport Monitoring Report 2011-12194Chart 5.4.2: Brisbane Airport—average quality of service ratings for availability andstandard of airport services, 2007-08 to 2011-12Key observations from chart 5.4.2 include:• Over the five-year reporting period, Brisbane Airport’s average rating for the availability ofairport services decreased from good in 2010-11 to satisfactory in 2011-12. Over thefive-year period from 2007-08, the average rating for the availability of airport services waseither satisfactory or good.• The average rating for the standard of airport services decreased from good in 2010-11 tosatisfactory (or just below good) in 2011-12. Over the five-year period from 2007-08, thestandard of airport services was either satisfactory or good.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of availability Rating of standardExcellentGoodPoorVery poorSatisfactory
  • 220. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results1955.4.2 International servicesChart 5.4.3: Brisbane Airport—check-in (international services), 2007-08 to 2011-12Key observations from chart 5.4.3 include:• Airlines’ rating of international check-in availability remained satisfactory in 2011-12.Airlines’ rating of the standard of international check-in services and facilities increased togood in 2011-12 having been satisfactory in the previous four years.− Commentary in the surveys of airlines was generally positive about the availabilityof check-in services and facilities. Airlines noted that Brisbane Airport was mostlyaccommodating of requests for check-in counters, although some airlines notedthat they have to share check-in rows with other carriers. Airlines also commentedthat while there could be more cleaning of check-in facilities, it was also noted thatthe airport had already undertaken to look into this.• Passenger rating of international check-in waiting time increased within the good range in2011-12. Check-in waiting time has been consistently rated as good by passengers overthe last five years.• The percentage of hours with more than 80 per cent of check-in desks in use decreased toalmost zero in 2011-12, having remained below 2 per cent over the last five years.Brisbane Airport reported a decrease in the number of hours during the year when morethan 80 per cent of check-in desks were in use from 120 hours in 2010-11 to 18 hours in2011-12.• Brisbane Airport noted that two Qantas-Card check-in kiosks were installed in theinternational terminal during 2011-12 to allow for self-service check-in. The airport alsonoted that it increased the number of transfer check-in desks at Level 2 of the internationalterminal from four to six desks to cater for growing demand of international travellersconnecting to domestic flights. Further, the airport noted that it’s Duty CoordinationManagers use camera footage to monitor queues and, along with the Brisbane Airport0%1%2%3%4%5%6%01234562007–08 2008–09 2009–10 2010–11 2011–12Percentageofhoursutilisedover80%AverageratingAirline surveys— rating of check-in availabilityAirline surveys— rating of check-in standardPassenger surveys— ratingof check-in waiting timePercentageof hours with more than80 per cent of check-in desks in use(RHS)ExcellentGoodPoorVery poorSatisfactory
  • 221. Brisbane Airport monitoring results Airport Monitoring Report 2011-12196Ambassadors, are available to assist with managing congestion and provide assistance topassengers.134Chart 5.4.4: Brisbane Airport—inbound government inspection (internationalservices), 2007-08 to 2011-12Key observations from chart 5.4.4 include:• Border agencies rated the availability of inbound Immigration facilities as satisfactory in2011-12, and over the previous four years since 2007-08. Border agencies rated thestandard of inbound Immigration facilities as good in 2011-12, having been rated as goodsince 2008-09.− Commentary in the surveys of border agencies noted that the lack of depth in frontof the primary line remains problematic and contributes to congestion in peakperiods, although the border agencies also recognised that this is inherent in thebuilding design and cannot be easily changed. Border agencies also noted thatthere was a lack of adequate signage near SmartGate to direct passengers to, forexample, baggage collection and washroom facilities. Nevertheless, borderagencies stated that Immigration facilities remain satisfactory to good and thatBrisbane Airport has regular meetings to allow issues to be discussed andaddressed.• Passengers’ rating of waiting time in the inbound Immigration area remained good in2011-12, although there was a slight decline in the rating from 2010-11. The inboundImmigration area has been consistently rated as good by passengers over the last fiveyears.• The number of arriving passengers per inbound Immigration desk (during peak hour) was1.6 per cent lower at around 38.4 passengers in 2011-12 compared to 39 passengers in2010-11. This was due to a lower number of passengers arriving during peak hour in theperiod as the number of inbound Immigration desks was unchanged at 32. Over the last134Brisbane Airport Ambassadors are a team of volunteers who assist international and domestic passengers andvisitors as well as operating the Visitor Information Centre at the domestic terminal.015304560759001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingBorder agencies survey— ratingof inbound Immigrationfacilities availabilityBorder agencies survey— ratingof inbound Immigrationfacilities standardPassenger surveys— ratingof waiting time in inbound Immigration areaNumber of arriving passengers per inbound Immigrationdesk (duringpeak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 222. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results197five years, the number of inbound Immigration desks increased from 22 in 2007-08 to 30 in2008-09 and then remained unchanged at 32 desks since 2009-10.− Brisbane Airport noted that no new facilities to enable the processing ofpassengers through customs, immigration and quarantine were installed in theinternational terminal during the 2011-12 year. The airport commented that it hasregular meetings with border agencies.Chart 5.4.5: Brisbane Airport—outbound government inspection (internationalservices), 2007-08 to 2011-12Key observations from chart 5.4.5 include:• The availability of outbound Immigration facilities was rated as satisfactory by borderagencies in 2011-12. The standard of outbound Immigration facilities was rated as good.Both these ratings were the same as in 2009-10 and 2010-11.− In commentary to the surveys, border agencies recognised queue managementwas difficult in peak periods, as a result of the building design, though BrisbaneAirport had effectively maximised use of the space. Border agencies noted thatthey too can influence the standard of these facilities through regular meetings withBrisbane Airport and that the border agencies and airport management have a‘partnership’ approach to dealing with issues.• Passengers’ rating of waiting time was virtually unchanged in 2011-12, remaining in thegood range. It has been in this range in each of the five years charted.• The number of departing passengers per outbound Immigration desk (during peak hour)was lower at around 58 passengers in 2011-12. This was due to a lower number ofdeparting passengers in peak hour, as the number of outbound Immigration desksremained unchanged at 17.02040608010012001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingBorder agencies survey— rating of outbound Immigration facilities availabilityBorder agencies survey— rating of outbound Immigration facilities standardPassenger surveys— rating of waiting time in outbound Immigration areaNumber of departingpassengers per outbound Immigrationdesk (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 223. Brisbane Airport monitoring results Airport Monitoring Report 2011-12198Chart 5.4.6: Brisbane Airport—baggage inspection (international services),2007-08 to 2011-12Key observations from chart 5.4.6 include:• Baggage inspection facilities’ availability and standard were both rated as good by borderagencies in 2011-12. This was unchanged compared to the two previous years.− In commentary to the surveys, border agencies noted that there were no significantissues raised in 2011-12, stating that the standard of facilities remained good.• Passengers’ rating of waiting time in the inbound baggage inspection area was good in2011-12, remaining relatively unchanged since 2009-10.• In 2011-12 the number of arriving passengers per baggage inspection desk (during peakhour) was lower at around 32 passengers. This was due to a lower number of passengersarriving during peak hour, as the number of desks was unchanged.015304560759001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingBorder agencies survey— ratingof inbound baggage inspection facilities availabilityBorder agencies survey— ratingof inbound baggage inspection facilities standardPassenger surveys— rating of waiting time in inbound baggage inspection areaNumber of arriving passengers per baggage inspection desk (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 224. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results199Chart 5.4.7: Brisbane Airport—gate lounges (international services),2007-08 to 2011-12Key observations from chart 5.4.7 include:• In 2011-12 passengers continued to rate the quality and availability of seating in theinternational terminal gate lounges as good. Passengers also continued to rate crowding inlounge areas as good.• The number of departing passengers (during peak hour) per seat in gate lounges wasslightly lower in 2011-12. There was also a slightly lower number of departing passengersper square metre of lounge area during peak hour. These changes were due to a lowernumber of passengers in peak hour, as there was no change in either the number of seatsor amount of space in lounge areas.• Brisbane Airport stated it upgraded and improved seating facilities on levels 3 and 4 in2011-12. During 2007-08 the number of seats was increased, from 1522 to 1972, and thelounge area was expanded from 8600 square metres to 18 120 square metres. Followingthese improvements, in 2008-09 passengers’ ratings of quality and availability of seating,and crowding, improved from satisfactory to good. They remained in that range oversubsequent years.0.08 0.06 0.06 0.06 0.050.00.20.40.60.81.01.201234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof quality andavailability of seating in loungeareaPassenger surveys— ratingof crowdingin lounge areaNumber of departingpassengers per seat in gatelounges (duringpeak hour) (RHS)Number of departingpassengers per squaremetre of loungearea (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperseat/persquaremetre
  • 225. Brisbane Airport monitoring results Airport Monitoring Report 2011-12200Chart 5.4.8: Brisbane Airport—aerobridges (international services),2007-08 to 2011-12Key observations from chart 5.4.8 include:• Airlines’ rating of the availability of aerobridges in the international terminal was good in2010-11, for the first time over the past five years. There was also a rise in airline ratings ofthe standard of aerobridges, though this remained in the satisfactory range.− In commentary to the surveys, airlines were generally positive regarding theavailability of aerobridges in 2011-12. Although it was noted that with the use ofwide-bodied aircraft, double aerobridges are needed to speed-up passengerembarkation and disembarkation. Airlines had mixed responses regarding thestandard of aerobridges. Airlines commented that the aerobridges needed to bekept cleaner and also noted that the old single aerobridges are not user friendly,particularly for wheelchair access.• The percentage of international passengers arriving and departing using an aerobridge wasalmost 100 per cent in 2011-12, and has been at this level since 2008-09. The number ofaerobridges remained at 15, which is unchanged since 2007-08.94%95%96%97%98%99%100%01234562007–08 2008–09 2009–10 2010–11 2011–12PercentageofpassengersusinganaerobridgeAverageratingAirline surveys— rating of aerobridges availabilityAirline surveys— rating of aerobridges standardPercentage of international passengers arriving using an aerobridge (RHS)Percentage of international passengers departing using an aerobridge (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 226. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results201Chart 5.4.9: Brisbane Airport—security (international services), 2007-08 to 2011-12Key observations from chart 5.4.9 include:• Passengers’ rating of the quality of the international terminal security search processremained good in 2011-12, consistent with the previous four years.• The number of departing passengers per security clearance system (during peak hour) wasslightly lower in 2011-12, from about 57 in 2010-11 to 55 passengers. This was a result of alower number of departing passengers during peak hour, as the number of securityclearance systems was unchanged at 18. This number has been relatively stable since themajor fall observed in 2008-09.Chart 5.4.10: Brisbane Airport—baggage processing (international services),2007-08 to 2011-12030609012015018001234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof quality of security search processNumber of departingpassengers per security clearancesystem (duringpeak hour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperseat/persquaremetre20030040050060070080001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofbagsperhourAverageratingAirline surveys— rating of baggage processing facilities availabilityAirline surveys— rating of baggage processing facilities standardPassenger surveys— rating of waiting time for inbound baggagereclaimPassenger surveys— rating of circulation spacefor inbound baggage reclaimAverage throughput of inbound baggage system (per hour) (RHS)Average throughput of outbound baggage system (per hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 227. Brisbane Airport monitoring results Airport Monitoring Report 2011-12202Key observations from chart 5.4.10 include:• Airlines’ rating of the availability of baggage processing facilities in the internationalterminal remained in the satisfactory range in 2011-12. The standard of the facilities wasalso rated as satisfactory by airlines. Both these ratings were also in the satisfactory rangeover the previous four years.− In commentary to the surveys, airlines noted that issues raised in last year’s surveyhad been rectified. This included measures to enable any items to be sent downthe oversize belts. That said, airlines noted problems with lack of space in thebaggage processing area, and significant delays due to lack of bag belt availability.• Passengers’ rating of waiting time for international inbound baggage reclaim decreasedwithin the good range in 2011-12. Waiting time has been rated as good since 2008-09.• Passengers’ rating of circulation space for inbound baggage reclaim slightly decreasedwithin the good range. Circulation has been rated in the good range in each of the fiveyears since 2007-08.• In 2011-12 the average hourly throughput of both the inbound (367 bags per hour) and theoutbound (353 bags per hour) international baggage systems rose to be at or close to thehighest level over the five years since 2007-08. This was a result of a significant increase inboth inbound and outbound luggage. There was a significant decrease in the number ofunplanned interruptions to both the inbound and outbound baggage processing facilities in2011-12, though the number of hours of these interruptions increased.• Brisbane Airport noted that no new baggage processing facilities were installed in2011-12.Chart 5.4.11: Brisbane Airport—baggage trolleys (international services),2007-08 to 2011-12012345601234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperbaggagetrolleyAverageratingPassenger surveys— ratingof findability of baggage trolleysNumber of passengers per baggage trolley (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 228. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results203Key observations from chart 5.4.11 include:• Passengers rated the findability of baggage trolleys in the international terminal as good in2011-12, the same rating as in the previous four years.• The number of passengers per baggage trolley was about 1.1 in 2011-12, very similar tothe previous three years. The number of baggage trolleys has been largely unchanged ataround 2000 over the five years charted; the decrease in 2007-08 was due to a lowernumber of passengers.Chart 5.4.12: Brisbane Airport—flight information display screens (internationalservices), 2007-08 to 2011-12Key observations from chart 5.4.12 include:• Passengers’ rating of flight information display screens increased within the good range in2011-12. Passengers’ rating of signage and wayfinding was also good in 2011-12. Boththese ratings have consistently been in the good range since 2008-09.• The number of passengers per flight information display screen (during peak hour) waslower at 5.8 passengers in 2011-12, the lowest over the five years since 2007-08. This wasa result of an increase in the number of flight information display screens from 350 to 381in 2011-12, as well as a slightly lower number of passengers during peak hour.• Brisbane Airport noted that the increase in the number of screens was partly due to theinclusion of 15 existing screens which were previously excluded from its surveyresponses, as well as installation of 16 new screens throughout the internationalterminal.• The number of passengers per flight information point (during peak hour) was lower witharound 202 passengers in 2011-12 compared to 207 passengers in 2010-11. As the13.476.53 7.35 6.51 5.8306012018024030036001234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof flight information display screensPassenger surveys— ratingof signageandwayfindingNumber of passengers per flightinformation display screen(duringpeak hour) (RHS)Number of passengers per informationpoint(during peakhour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperflightinformationscreen/perflightinformationpoint
  • 229. Brisbane Airport monitoring results Airport Monitoring Report 2011-12204number of information points was unchanged at 11, the change was due to a lower numberof peak hour passenger numbers.• Brisbane Airport advised the information points were: a visitor information desk, adirectory board and nine interactive kiosks.Chart 5.4.13: Brisbane Airport—washrooms (international services),2007-08 to 2011-12The key observation from chart 5.4.13 is:• The standard of washrooms in the international terminal was rated as good by passengersin 2011-12, a slight increase. Ratings have been in the good range in every year since2008-09, compared with satisfactory in 2007-08.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof standard of washroomsExcellentGoodPoorVery poorSatisfactory
  • 230. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results2055.4.3 Domestic servicesChart 5.4.14: Brisbane Airport—check-in (domestic services), 2007-08 to 2011-12Key observations from chart 5.4.14 include:• Passenger rating of check-in waiting time in the domestic terminal was good in 2011-12, asit has been each year since 2007-08.• The number of departing passengers per check-in desk (during peak hour) was around 41,slightly higher compared to 2010-11. The relatively significant increase that occurred in2010-11 compared with 2009-10 was due to a higher number of passengers during peakhour. The number of check-in desks was unchanged at 16 over the five-year period since2007-08.• Brisbane Airport noted that it is trialling common-user bag drop facilities in the domesticterminal (excluding the DTL areas). If successful, it plans to install more of these bagdrop facilities, along with additional check-in kiosks, to increase capacity.010203040506001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperdeskAverageratingPassenger surveys— rating of check-in waiting timeNumber of departing passengers per check-in desk (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 231. Brisbane Airport monitoring results Airport Monitoring Report 2011-12206Chart 5.4.15: Brisbane Airport—gate lounges (domestic services), 2007-08 to 2011-12Key observations from chart 5.4.15 include:• Passengers’ rating of quality and availability of seating in domestic terminal lounge areaswas good in 2011-12, though it has fallen within the good range in each of the last twoyears. Crowding of lounge areas was rated good in 2011-12, though declined after havingrecorded a rise within the good rating in each of the previous three years. Both thesemeasures have had good ratings in each of the five years since 2007-08.• The number of departing passengers (during peak hour) per seat has been largelyunchanged since 2007-08. The number of seats increased in 2007-08 (from 427 to 577),then again in 2010-11 (from 577 to 850). In 2010-11 there was also a higher averagenumber of departing passengers during peak hour, from 443 to 664.• The number of departing passengers per square metre (during peak hour) has also beensteady. Lounge area in the domestic terminal increased in 2010-11, from 3522 squaremetres to 4560 square metres, coinciding with the higher peak departing passengernumbers.• Brisbane Airport noted that it increased the number of gate lounges in the domesticterminal from four to nine in early 2011.0.00.30.60.91.21.51.801234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— rating of quality and availability of seating in lounge areaPassenger surveys— rating of crowdingin lounge areaNumber of departing passengers per seat in gate lounges (during peak hour) (RHS)Number of departing passengers per squaremetre of loungearea (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperseat/persquaremetre
  • 232. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results207Chart 5.4.16: Brisbane Airport—aerobridges (domestic services), 2007-08 to 2011-12Key observations from chart 5.4.16 include:• After having been higher for two consecutive years, the number of arriving passengers peraerobridge (during peak hour) was lower in 2011-12 at 318 passengers. The number ofdeparting passengers per aerobridge was higher in 2011-12, at 329 passengers. Over thefive years since 2007-08 the number of aerobridges remained constant at two.• Brisbane Airport has noted that in 2011-12 there was a shift from two to three dailypeak periods. This has resulted in a slight reduction in the average number ofpassengers during the peak hour.• Brisbane Airport also noted that in 2010-11 there was high usage of aerobridges as thesatellite terminal and bays, which lack aerobridges, were being expanded. They were inuse in 2011-12 with additional gates, hence the drop in the number of passengersusing aerobridges from 901 818 to 645 413.0601201802403003602007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperaerobridgeNumber of arriving passengers per aerobridge (during peak hour)Number of departingpassengers per aerobridge(during peak hour)
  • 233. Brisbane Airport monitoring results Airport Monitoring Report 2011-12208Chart 5.4.17: Brisbane Airport—security (domestic services), 2007-08 to 2011-12Key observations from chart 5.4.17 include:• Passengers’ rating of the quality of the security search process at the domestic terminalwas good in 2011-12, having also been good in the previous four years.• The number of departing passengers per security clearance system rose slightly, from 129in 2010-11 to 132 in 2011-12. Over the past five years there have been two major changesin this measure. In 2008-09 there was a fall when the number of systems increased fromtwo to five; then in 2010-11 it rose with a higher number of departing passengers in peakhour.Chart 5.4.18: Brisbane Airport—baggage processing (domestic services),2007-08 to 2011-1205010015020025030001234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengerspersecurityclearancesystemAverageratingPassenger surveys— rating of quality of security search processNumber of departingpassengers per security clearancesystem (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof waiting time for inbound baggage reclaimPassenger surveys— ratingof information display for inbound baggage reclaimPassenger surveys— ratingof circulation space for inbound baggage reclaimExcellentGoodPoorVery poorSatisfactory
  • 234. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results209Key observations from chart 5.4.18 include:• In 2011-12 passengers’ ratings of waiting time for domestic inbound baggage reclaim weresatisfactory, which was lower than the good rating over the previous four years.• Brisbane Airport commented that it is investigating options to increase baggage reclaimcapacity in the domestic terminal (excluding the DTL areas).• Information display for inbound baggage reclaim was rated satisfactory in 2011-12, havingfallen from a good rating in 2010-11.• Passengers’ rating of circulation space for inbound baggage reclaim was good, though at alower level in the good rating compared to 2010-11. This rating has been in the good rangeover the five years since 2007-08.Chart 5.4.19: Brisbane Airport—baggage trolleys (domestic services),2007-08 to 2011-12Key observations from chart 5.4.19 include:• Findability of baggage trolleys was rated as satisfactory in 2011-12. After having beenrated excellent by passengers in 2009-10, the rating has fallen in the subsequent twoyears.• The number of passengers per trolley was significantly lower in 2011-12, at6.2 passengers. This compares with 12.1 passengers per trolley in 2010-11 and wasprimarily a result of a rise in the number of trolleys from 110 in 2010-11 to 210 trolleys in2011-12.• Brisbane Airport has noted that it added 100 new trolleys in the new multi-level carpark, which was completed in March 2012.01234567891011121301234562007–08 2008–09 2009–10 2010–11 2011–12NumberofpassengersperbaggagetrolleyAverageratingPassenger surveys— rating of findability of baggage trolleysNumber of passengers per baggagetrolley (during peak hour) (RHS)ExcellentGoodPoorVery poorSatisfactory
  • 235. Brisbane Airport monitoring results Airport Monitoring Report 2011-12210Chart 5.4.20: Brisbane Airport—flight information display screens (domestic services),2007-08 to 2011-12Key observations from chart 5.4.20 include:• Passengers’ rating of domestic terminal flight information display screens was good in2011-12. Signage and wayfinding were also rated good. Both these measures fell to theirlowest rating of the past five years.• In 2011-12 the number of passengers per information display screen (during peak hour)almost halved, at around 12 passengers compared to 23 in 2010-11. This was largely dueto an almost doubling of flight information screens, from 57 in 2010-11 to 106 in 2011-12.• Brisbane Airport noted that 20 new flight information display screens were installed inthe multi-level car park, and 12 in the new undercover elevated walkway (Skywalk).Additional screens were also added in the domestic terminal.• The number of passengers per information point (during peak hour) was lower in 2011-12,after having been higher in each of the previous four years. This was a result of a lowernumber of passengers during peak hour. Since 2008-09 the domestic terminal has had oneinformation point, a visitor information desk.18.91 19.06 22.96 23.42 12.20148896107913351293025050075010001250150001234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof flight information display screensPassenger surveys— ratingof signageandwayfindingNumber of passengers per flightinformation display screen(duringpeak hour) (RHS)Number of passengers per informationpoint(during peakhour) (RHS)ExcellentGoodPoorVery poorSatisfactoryNumberofpassengersperflightinformationscreen/perflightinformationpoint
  • 236. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results211Chart 5.4.21: Brisbane Airport—washrooms (domestic services), 2007-08 to 2011-12The key observation from chart 5.4.21 is:• In 2011-12 passenger rating of the standard of washrooms in the domestic terminal rose tobe in the good range, after having been rated as satisfactory in the previous four years.• Brisbane Airport has noted that it upgraded the washrooms on level 2 of the domesticterminal in 2011-12.5.4.4 Other airport servicesChart 5.4.22: Brisbane Airport—availability of airside services and facilities (otherairport services), 2007-08 to 2011-1201234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof standard of washroomsExcellentGoodPoorVery poorSatisfactory01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of runway Rating of taxiwaysRating of aprons Rating of aircraft parking facilities andbaysRating of groundhandlingservices andfacilitiesExcellentGoodPoorVery poorSatisfactory
  • 237. Brisbane Airport monitoring results Airport Monitoring Report 2011-12212Key observations from chart 5.4.22 include:• Airlines’ rating of runway availability was poor in 2011-12, a significant decline from good in2010-11.− In commentary to the surveys, the airlines referred to significant delays during peakperiods, problems with ATC holding patterns and runway works limiting eveningcapacity of the airport. Some airlines recognised that Brisbane Airport is takingmeasures to address the issue. Other comments included that the airport isadopting a slot management system− Brisbane Airport has noted that it has completed the detailed design for the firstconstruction phase for a new parallel runway and has commenced civil works. Thenew runway was approved by the state and Australian governments in 2007.Brisbane Airport expects the new runway to be commissioned in 2020.• Airlines’ rating of the availability of taxiways was satisfactory in 2011-12, having fallen froma good rating in 2010-11.− In commentary the airlines generally had no issues regarding availability oftaxiways.• Airlines’ rating of the availability of aprons in 2011-12 was good.− Comments by the airlines were generally good, though one issue was that apronconstruction was not always fast enough to meet airline requirements.− Brisbane Airport noted it has commenced expansion of the domestic apron.• Airlines’ rating of the availability of aircraft parking facilities and bays was satisfactory,though fell from a good rating in the previous year.− In commentary to the airline surveys, some airlines commented on the growingdemand for aircraft parking bays, and the need for Brisbane Airport to respond. Forone airline, bays for wide-bodied aircraft were the priority.− Brisbane Airport has noted that in early 2011 two additional aircraft parking bayswere completed in the domestic terminal. Brisbane Airport is in the final stages ofconstructing additional bays in the international northern apron, which couldaccommodate two wide-bodied aircraft, and also in the domestic northern apron. Inthe domestic southern apron Brisbane Airport expects to complete additional baysfor commissioning in 2014.• Airline rating of the availability of ground handling services and facilities was good in2011-12 and in the previous three years.
  • 238. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results213Chart 5.4.23: Brisbane Airport—standard of airside services and facilities (other airportservices), 2007-08 to 2011-12Key observations from chart 5.4.23 include:• Airlines’ rating of runway standard was satisfactory in 2011-12, a decrease from good in2010-11.− In commentary to the surveys, airlines noted that there were constant maintenanceand upgrades being made with further planned improvements.• Airlines’ rating of the standard of taxiways was satisfactory in 2011-12, having decreasedfrom a rating of good in 2010-11.− In commentary to the surveys, airlines noted that the planned runway overlayproject was to commence in 2013.• Airlines’ rating of the standard of aprons in 2011-12 was satisfactory.− Comments by the airlines were generally positive, though some noted the need tore-paint lines and safety barriers. Nevertheless, airlines also noted that the airportwas in the process of updating line markings and that this was being done in anefficient manner.• Airlines’ rating for the standard of aircraft parking facilities and bays was satisfactory;though decreased from a rating of good in the previous year.− In commentary to the surveys, the airlines generally had no issues regarding thestandard of aircraft parking facilities and bays.• Airlines’ rating of the standard of ground handling services and facilities was satisfactory in2011-12, having been good in 2010-11.− In commentary the airlines generally had no issues regarding the standard ofground handling services and facilities.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of runway Rating of taxiwaysRating of aprons Rating of aircraft parking facilities andbaysRating of groundhandlingservices andfacilitiesExcellentGoodPoorVery poorSatisfactory
  • 239. Brisbane Airport monitoring results Airport Monitoring Report 2011-12214Chart 5.4.24: Brisbane Airport—runway traffic (other airport services)135Chart 5.4.25: Brisbane Airport—runway traffic continued (other airport services)Notes: Airservices Australia’s measures were devised as a guide to its own performance in handling traffic, thoughcan also provide some indication of airport constraints including runway infrastructure or management. Inparticular, if demand is consistently close to operationally agreed capacity for the peak hour, it suggests thatthere is little spare capacity for increased traffic at that time. The measures relate to the busiest peak hour atthe airport, averaged across all days in the month specified. The measures and their interpretation areexplained in the appendices to this report.Key observations from charts 5.4.24 and 5.4.25 include:• Over the period June 2011 to March 2012 the average monthly number of arrivals in themorning peak was 43 per hour, compared with 44 per hour in 2010-11. The lowest average135Data for charts 5.4.24 and 5.4.25 are presented for the period June 2011 to March 2012 only due to dataunavailability.0102030405060Demand Actual Arrivals Agreed Rate Peak demand (within thehour)MinutesJun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 201205101520253035Max pro rata rate (within the hour) Average max system delay Average system delayMinutesJun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011Nov 2011 Dec 2011 Jan 2012 Feb 2012 Mar 2012
  • 240. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results215number of arrivals was in March 2012, with 33 per hour, while the highest was inAugust 2012 with 49 per hour.• In comments accompanying the data, Airservices Australia advised the volume of trafficincreased considerably at Brisbane Airport; and that the mix of traffic is different toother major airports.• The average monthly maximum system delay averaged 13 minutes over the period, upfrom a monthly average of 12 minutes in 2010-11.• Airservices Australia noted that during the reporting period there have been runwayavailability issues and periods of unfavourable weather. Delays can be attributed to thehigh loads in the peak periods and the traffic mix.• Airservices Australia has advised that it changed the system used to collect and reportstatistics, with the new system commissioned in March 2012. Airservices Australianoted that the transition to the new system may have impacted the data for March2012.Chart 5.4.26: Brisbane Airport—airport management responsiveness (other airportservices), 2007-08 to 2011-12Key observations from chart 5.4.26 include:• There was a slight fall in the airline rating of the airport’s overall responsiveness toaddressing quality of service concerns, which remained in the satisfactory range.• There was a marked rise within the good range in border agencies’ rating of airportmanagement approach to concerns in 2011-12, to be midway between good and excellent.− In commentary to the airline survey, most airlines noted that Brisbane Airportprovides ready access to management and are responsive when issues are raised.While one airline noted an improvement over the year, another noted consultationcould be improved regarding works that affect airlines and passengers.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingAirline surveys— rating of overall system for addressing quality of service concernsBorder agencies survey— ratingof management approachto concernsExcellentGoodPoorVery poorSatisfactory
  • 241. Brisbane Airport monitoring results Airport Monitoring Report 2011-12216− In commentary to the border agencies survey, it was noted that Brisbane Airportprovides ready access to management and are responsive when issues are raised.• Brisbane Airport noted its managers participate in a number of committees with airlines,border agencies and other stakeholders where it tries to ensure issues regarding quality ofservice are addressed. Additionally Brisbane Airport have advised that it conducts anannual customer service survey where tenants including airlines, border agencies andother stakeholders, can provide feedback on a range of topics including facilities andservices.Chart 5.4.27: Brisbane Airport—international terminal kerbside (other airport services),2007-08 to 2011-12Key observations from chart 5.4.27 include:• Passenger rating of kerbside pick-up and drop-off facilities at the international terminalreturned to good in 2011-12, after recording a satisfactory rating in the previous year.• Passenger rating of taxi facilities waiting time increased in 2011-12, and retained the goodrating of the previous four years.• Rating of kerbside space congestion by passengers fell in 2011-12, remaining in thesatisfactory range.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof kerbsidepick-upanddrop-off facilitiesPassenger surveys— ratingof taxi facilities waitingtimePassenger surveys— ratingof kerbsidespacecongestionExcellentGoodPoorVery poorSatisfactory
  • 242. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results217Chart 5.4.28: Brisbane Airport—domestic terminal kerbside (other airport services),2007-08 to 2011-12Key observations from chart 5.4.28 include:• Passenger rating of domestic terminal taxi facilities declined in 2011-12, moving from goodto satisfactory. Passenger rating of both kerbside pick-up and drop-off facilities, andkerbside space congestion fell slightly and remained in the satisfactory range. Thiscontinues the steady downward trend evident since 2008-09 when all these measures werein the good range.• Brisbane Airport noted that in March 2012 it completed an undercover elevated walkway(Skywalk) connecting the domestic car parks and train with the domestic terminal. By goingover the road, the walkway separates pedestrians and cars, providing a quicker and saferaccess to the terminal and improving traffic flow. New roads are being constructed toimprove drop-off and pick-up. A free passenger pick-up area with a walkway to Skywalkand to the terminal will also be constructed. Completion was expected by September 2012.Brisbane Airport commented that disruption due to this construction would have had animpact on passenger satisfaction ratings.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingPassenger surveys— ratingof kerbsidepick-upanddrop-off facilitiesPassenger surveys— ratingof taxi facilities waitingtimePassenger surveys— ratingof kerbsidespacecongestionExcellentGoodPoorVery poorSatisfactory
  • 243. Brisbane Airport monitoring results Airport Monitoring Report 2011-122185.5 Car parking services monitoring resultsIn this section, the monitoring results for car parking at Brisbane Airport are presented. Thisincludes prices (section 5.5.1), revenues, costs and profits (section 5.5.2) and quality of carparking (section 5.5.3). Section 5.5.4 provides details on the various other transport optionsthat are available for travelling to and from the airport.5.5.1 Prices136Chart 5.5.1: Brisbane Airport—prices for short-term parking at international carparking facility, 2001-02 to 2011-12Key observations from chart 5.5.1 include:• Brisbane Airport did not increase any of its short-term car parking prices at its internationalcar parking facility in 2011-12.• Over the 11 years since 2001-02, the price for one hour short-term car parking increasedby 116.7 per cent (from $6.00 to $13.00), two hours increased by 100.0 per cent (from$8.00 to 16.00) and three hours by 120.0 per cent (from $10.00 to $22.00).• The price for four hours increased by 108.3 per cent (from $12.00 in 2001-02 to $25.00 in2011-12), five hours by 114.3 per cent (from $14.00 to $30.00) and 24 hours by66.7 per cent (from $18.00 to $30.00).136The prices presented are Brisbane Airport’s drive-up rates. Discounted rates are available online.051015202530352001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12DollarsShort-term international car park—1 hour Short-term international car park—2 hoursShort-term international car park—3 hours Short-term international car park—4 hoursShort-term international car park—5 hours Short-term international car park—24hours
  • 244. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results219Chart 5.5.2: Brisbane Airport— prices for short-term parking at domestic car parkingfacility, 2001-02 to 2011-12Key observations from chart 5.5.2 include:• Brisbane Airport increased most of its prices for short-term car parking at its domesticterminal in 2011-12. The prices for three hours ($22.00) and four hours ($25.00) wereunchanged. The price for one hour increased by 7.7 per cent (to $14.00), for two hours by6.3 per cent (to $17.00), for both five and 24 hours, prices rose by 25 per cent (to $50.00).• Since 2001-02, the price for one hour increased by 133.3 per cent, for two hours by112.5 per cent, three hours by 120.0 per cent and four hours by just over 108.3 per cent.For five hours the price increased by 257.1 per cent, while for 24 hours the rise was177.8 per cent.05101520253035404550552001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12DollarsShort-term domestic car park—1 hour Short-term domestic car park—2 hoursShort-term domestic car park—3 hours Short-term domestic car park—4 hoursShort-term domestic car park—5 hours Short-term domestic car park—24hours
  • 245. Brisbane Airport monitoring results Airport Monitoring Report 2011-12220Chart 5.5.3: Brisbane Airport—prices for long-term parking at international carparking facility, 2001-02 to 2011-12Key observations from chart 5.5.3 include:• In 2011-12 Brisbane Airport did not change any of its prices for long-term car parking at itsinternational terminal.• Over the 11 years since 2001-02, there was significant variation in the extent of price rises.The price for one day increased by 66.7 per cent (from $18.00 to $30.00), by around 30 percent for two days (from $38.00 to $50.00) and three days (from $54.00 to $70.00), andaround 15 per cent for five days (from $78.00 to $90.00) and seven days (from $86.00 to$99.00).01020304050607080901001102001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12DollarsLong-term international car park—1day Long-term international car park—2daysLong-term international car park—3days Long-term international car park—5daysLong-term international car park—7days
  • 246. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results221Chart 5.5.4: Brisbane Airport— prices for long-term parking at domestic car parkingfacility, 2001-02 to 2011-12Key observations from chart 5.5.4 include:• In 2011-12 Brisbane Airport did not change any of its prices for long-term car parking at itsdomestic terminal.• Since 2001-02, all prices have increased. The most significant increase was for one day,which rose by 81.8 per cent (from $22.00 to $40.00). There were around 55 per centincreases for both two days (from $38.00 to $60.00) and for five days (from $78.00 to$120.00), while the price for three days rose by 48.1 per cent (from $54.00 to $80.00) andfor seven days by 62.8 per cent (from $86.00 to $140.00).5.5.2 Revenues, costs and profitsTable 5.5.1 outlines Brisbane Airport’s revenues, operating expenses and operating marginsfor car parking and the total airport from 2001-02 to 2011-12.0204060801001201401602001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12DollarsLong-term domestic car park—1day Long-term domestic car park—2daysLong-term domestic car park—3days Long-term domestic car park—5daysLong-term domestic car park—7days
  • 247. Brisbane Airport monitoring results Airport Monitoring Report 2011-12222Table 5.5.1: Brisbane Airport—revenues, operating expenses and operating margins for car parking and total airport services,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue($million)Car parking 19.1 21.0 25.3 29.4 34.1 39.8 43.9 52.3 58.1 60.1 60.9Total airport 146.9 169.1 193.0 245.0 315.1 332.6 393.4 381.8 423.5 456.5 486.1Operating expenses($million)Car parking 3.9 4.4 4.7 7.2 7.1 8.9 11.8 12.5 13.5 17.1 23.1Total airport 72.1 76.4 84.0 101.6 110.1 116.7 138.4 168.8 175.8 189.4 198.1Operating margin($million)Car parking 15.2 16.6 20.6 22.2 27.0 30.9 32.1 39.8 44.7 42.9 37.9Total airport 74.8 92.7 109.0 143.4 205.0 215.9 254.9 213.0 247.9 267.2 288.0Operating margin asa % of revenueCar parking 79.6 79.2 81.4 75.4 79.2 77.6 73.1 76.0 76.8 71.5 62.1Total airport 50.9 54.8 56.5 58.5 65.1 64.9 64.8 55.8 58.5 58.5 59.3
  • 248. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results223Chart 5.5.5: Brisbane Airport—airport car parking revenue as a proportion of totalairport revenue, 2001-02 to 2011-12Key observations from table 5.5.1 and chart 5.5.5 include:• Car parking revenue increased by 1.4 per cent in 2011-12 to $60.9 million. As a percentageof total airport revenue, car parking revenue decreased from 13.2 per cent in 2010-11 to12.5 per cent in 2011-12.• Since 2001-02, car parking revenue increased by 219.5 per cent, while total airportrevenue increased by 230.9 per cent. In contrast, in 2001-02 car parking revenue as aproportion of total airport revenue was 13.0 per cent. During this period BrisbaneAirport has invested in three multi-level car parks.• Operating expenses for car parking increased by 34.7 per cent in 2011-12 to $23.1 million.As a percentage of total airport operating expenses, car parking operating expensesincreased from 9.0 per cent in 2010-11 to 11.7 per cent in 2011-12.• Since 2001-02, car parking operating expenses have increased by 491.7 per cent,while total airport operating expenses have increased by 174.6 per cent. In 2001-02,car parking operating expenses as a percentage of total airport operating expenseswere 5.4 per cent.• With operating expenses increasing by significantly more than revenue, car parkingoperating margin decreased by 11.8 per cent in 2011-12. Car parking operating margin asa percentage of total airport operating margin was 13.1 per cent in 2011-12, down from16.1 per cent in 2010-11.• Over the 11 years since 2011-12, car parking operating margin increased by149.6 per cent. Over the same period, total airport operating margin increased by285.3 per cent. In 2001-02, car parking operating margin as a percentage of the totalairport operating margin was 20.3 per cent.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—carparking Revenue—total airport
  • 249. Brisbane Airport monitoring results Airport Monitoring Report 2011-12224Chart 5.5.6: Brisbane Airport—revenues, operating expenses and operating marginsfor car parking services on a per car park basis, 2001-02 to 2011-12Key observations from chart 5.5.6 include:• In 2011-12 car parking revenue and operating margin per car parking space decreased,while operating expenses increased and the number of spaces increased significantly.• Car parking revenue per car parking space fell in 2011-12 by 23.0 per cent to $4738. Overthe 11 years since 2001-02 revenue per car parking space rose by 7.7 per cent.• Car parking operating expenses per car parking space rose slightly, to $1794(2.3 per cent). This represents a 99.4 per cent increase from $899.65 in 2001-02.• Car parking operating margin per car parking space fell significantly in 2011-12 to $2944 (afall of 33.0 per cent), while over the 11 years since 2001-02 there was a 15.9 per centdecrease.• The key factor in the changes in 2011-12 was a 31.7 per cent increase in the number of carparking spaces, from 9767 in 2010-11 to 12 862 in 2011-12. As noted above, in 2011-12Brisbane Airport completed construction of a multi-level car park for the domestic terminal.5.5.3 Quality of car parking facilitiesTable 5.5.2 outlines the number of car park spaces available and annual throughput of car parkfacilities at Brisbane Airport from 2001-02 to 2011-12.01 0002 0003 0004 0005 0006 0007 0008 0009 00010 00011 00012 00013 00001 0002 0003 0004 0005 0006 0007 0008 0002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12NumberofcarparkspacesDollarspercarparkRevenue per car park space Operating expenses per car park spaceOperating margin per car park space Number of car park spaces (RHS)
  • 250. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results225Table 5.5.2: Brisbane Airport—number of car park spaces and average daily throughput, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Number of carpark spacesInternationalcombined short-termand long-termNA 1000 950 950 950 951 1 740 1 740 1 740 1 740 1 740Domestic short-term NA 985 938 938 938 842 858 810 976 1 133 1 690Domestic long-term NA 2 350 1 500 3 600 4 100 4 100 4 148 4 635 4 410 4 410 6 948Staff NA 2 971 2 277 2 349 2 723 2 723 3 575 2 730 2 484 2 484 2 484Total 4 335 7 306 5 665 7 837 8 711 8 616 10 321 9 915 9 610 9 767 12 862Annualthroughputof car parkfacilities(thousands)Internationalcombined short-termand long-termNA 613 661 753 752 707 607 705 673 662 663Domestic short-term 1 161 1 157 1 176 1 141 1 156 1 031 960 912 839 758Domestic long-term NA 143 190 214 315 378 356 362 511 533 533Total NA 1 916 2 008 2 142 2 208 2 242 1 994 2 028 2 096 2 035 1 954Average dailythroughput ofcar parkfacilitiesInternationalcombined short-termand long-termNA 1 679 1 806 2 062 2 060 1 937 1 659 1 932 1 845 1 815 1 811Domestic short-term 3 181 3 162 3 223 3 126 3 168 2 817 2 631 2 498 2 298 2 070Domestic long-term NA 391 519 585 864 1 036 972 993 1 399 1 462 1 457Total 5 250 5 250 5 487 5 870 6 049 6 141 5 448 5 557 5 742 5 574 5 338
  • 251. Brisbane Airport monitoring results Airport Monitoring Report 2011-12226Key observations from table 5.5.2 include:• In 2011-12 there were no changes in the number of international terminal car parkingspaces. At the domestic terminal the number of short-term car parking spaces increased by49.2 per cent, and the number of long-term car parking spaces increased by 57.6 per cent.This was primarily due to the completion of the new multi-level car park.• Since 2002-03 the number of international car parking spaces has increased from 1000to 1740 (74.0 per cent). Over the same period the number of domestic short-term carparking spaces rose by 71.6 per cent, from 985 to 1690. The number of domesticlong-term car parking spaces increased by 195.7 per cent, from 2350 to 6948 spaces.• In 2011-12 the international terminal car parking annual throughput increased by0.1 per cent to 662 953 cars. Throughput at the domestic terminal short-term car park wasdown by 9.7 per cent, while at the long-term car park it was 0.1 per cent lower than2010-11.• In 2011-12 average daily throughput at the international car park increased by 0.2 per centto 1811 cars per day. Domestic terminal average daily throughput for the short-term carpark fell by 9.9 per cent (to 2070 cars) and by 0.3 per cent (to 1457 cars) at the long-termcar park.• Across all airport car parks there was a 4.2 per cent fall in the daily average throughput, to5338 cars.Chart 5.5.7: Brisbane Airport—international passenger survey ratings of the quality ofcar parking facilities 2001-02 to 2011-12Key observations from chart 5.5.7 include:• International passengers’ rating of Brisbane Airport’s car parking availability, standard andtime taken to enter has been in, or close to, the good range over the 11 years since2001-12.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingPassenger surveys—airport car parkingavailabilityPassenger surveys—airport car parkingstandardPassenger surveys—airport car parkingtime takento enterExcellentGoodPoorVery poorSatisfactory
  • 252. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results227• In 2011-12 international passengers’ rating of the availability of car parking facilitiesdecreased, though remained within the satisfactory range. This was the lowest passengerrating for availability over the 10 years since 2002-03.• International passengers’ rating of the standard of airport car parking increased in 2011-12,and remained in the good range. Over the 11 years since 2001-02 this rating has fallen.• International passengers’ rating of the time taken to enter the Brisbane Airport’s car parkingfacilities improved in 2011-12 by 4.5 per cent and remained in the good range. Over the 11years since 2001-02 this rating has increased.Chart 5.5.8: Brisbane Airport—domestic passenger survey ratings of the quality ofcar parking facilities 2001-02 to 2011-12Key observations from chart 5.5.8 include:• In 2011-12, domestic passengers’ rating of Brisbane Airport’s car parking availabilityincreased, moving from satisfactory to good for the first time since 2008-09. This was thehighest passenger rating for availability since 2004-05 and represented a 10.4 per centincrease compared to 2002-03.• The standard of parking was rated in the good in 2011-12 by domestic passengers, afterhaving been rated satisfactory in 2010-11. Since 2002-03, this rating increased from thesatisfactory range.• Domestic passengers rated the time taken to enter the car parking facilities as good in2011-12. There was an increase in this rating from satisfactory to good over the 10 yearscharted.5.5.4 Other transport optionsIn addition to car parking options, there are a number of alternative transport options to andfrom Brisbane Airport including buses, taxis, trains and transportation via private car. For someof these alternative transport options Brisbane Airport imposes a landside access charge.01234562001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12AverageratingPassenger surveys—airport car parkingavailabilityPassenger surveys—airport car parkingstandardPassenger surveys—airport car parkingtime takento enterExcellentGoodSatisfactoryPoorVery poor
  • 253. Brisbane Airport monitoring results Airport Monitoring Report 2011-12228Table 5.5.3 outlines the landside access charges from 2009-10 to 2011-12 as well as theindexed average list prices for that period (with 2009-10 as the base year). Table 5.5.4 outlinesthe revenue that the airport received from those charges.Table 5.5.3: Brisbane Airport—landside access chargesTransport option Average list prices($)Indexed average list prices(2009-10 base year = 100)2009-10 2010-11 2011-12 2009-10 2010-11 2011-12Public bus Monthly fee Monthly fee Monthly fee NA NA NAOff-airport car parking Monthly fee Monthly fee Monthly fee NA NA NATaxis (per pick-up) $3.00 $3.00 $3.00 100.0 100.0 100.0Train (corridor lease) $141 000 $145 000 $149 000 100.0 102.8 105.7Private bus and privatecar operatorsVarious Various Various NA NA NATable 5.5.4: Brisbane Airport—revenues from landside access chargesTransport option 2009-10 2010-11 2011-12Public bus $120 000 $124 000 $107 000Off-airport car parking $176 000 $237 000 $331 000Taxis $2 600 000 $3 100 000 $3 461 000Train $141 000 $145 000 $149 000Private bus and private car operators $1 300 000 $1 700 000 $1 746 000Total $4 337 000 $5 306 000 $5 794 000Key observations from tables 5.5.3 and 5.5.4 include:137• Public buses− A public bus route runs daily between Chermside and the airport village.− Brisbane Airport charges scheduled bus services a monthly fee to access theairport. The airport received $107 000 in revenue in 2011-12, down from $124 000in 2010-11 (13.7 per cent).137Unless otherwise specified, source for transport information in this section is Brisbane Airport’s website:http://www.bne.com.au/parking-transport/transport-options accessed 13/12/12.
  • 254. Airport Monitoring Report 2011-12 Brisbane Airport monitoring results229• Private buses and hire cars− Brisbane Airport operates a complimentary shuttle bus to and from the AirportVillage shopping precinct to the terminals. This bus also runs between theinternational and domestic terminals at a charge of $5 one-way.− There are also commercial bus companies servicing the airport, specialising inCBD and hotel pick up, and travel to and from the Gold Coast and the SunshineCoast.− Brisbane Airport charges bus and hire car operators a fee to access the airportaccording to the number of passengers. The fee for 1-4 seats is $4.65, for 5-11seats the fee is $7.20, for 12-28 seats it is $9.80 and for more than 28 seats thefee is $11.85.− In 2011-12 Brisbane Airport received $1.7 million revenue from operators of privatebuses, along with hire car operators, which was similar to 2010-11.• Train− Brisbane Airport is serviced by a privately owned and operated train. The service isintegrated into the suburban train network, with trains running from Brisbane Airportdirectly to Brisbane’s CBD and to the Gold Coast. The train also runs between theinternational and domestic terminals.− Fares are $15.50 between the airport and the CBD one way, and $29 return. Tripsbetween terminals cost $5 one-way.− Brisbane Airport received a total of $149 000 in revenue from a corridor lease forthe train in 2011-12, up from $145 000 in 2010-11 (2.8 per cent). The airport notedthat it does not receive any per ticket or per passenger revenue from the train.• Off-airport parking− A number of off-airport car parking facilities service Brisbane Airport. Outdoorparking prices sampled by the ACCC ranged from $16 to $50 for one day’s parkingand $34 to $50 for three days.− Off-airport parking operators are usually charged per vehicle fee by BrisbaneAirport for access to the airport. The airport received $331 000 from off-airportoperators in 2011-12, an increase of 39.7 per cent from $237 000 in 2009-10.• Taxis− Brisbane Airport charges a $3 airport service fee on taxis picking up passengers. Itdoes not charge to drop-off passengers. The fee did not change in 2011-12. Theairport received a total of $3.5 million in revenue from taxi charges in 2011-12, anincrease of 11.6 per cent from around $3.1 million in 2010-11.• Terminal drop-off and pick up− In its 2010-11 Airport Monitoring Report (AMR), the ACCC noted that BrisbaneAirport has advised of its plan to change arrangements for passenger drop-off andpick up at the domestic terminal. In October 2012, Brisbane Airport announced thatdrivers would be allowed to pick up passengers in front of the terminal subject to
  • 255. Brisbane Airport monitoring results Airport Monitoring Report 2011-122302-minute stopping time and also that it was making available a dedicatedpassenger pick-up waiting area with 30-minute free parking.138138See Brisbane Airport Corporation, “BAC announces changes to ‘pick-up’ at BNE domestic, 24 October 2012;http://www.bne.com.au/news/bac-announces-changes-%E2%80%98pick-up%E2%80%99-bne-domestic.
  • 256. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results2316 Melbourne AirportKey points• Total passenger numbers at Melbourne Airport during 2011-12 were relatively flat,increasing by 0.2 per cent from 2010-11 to 28.4 million. A 2.0 per cent fall in domesticpassenger numbers was marginally offset by a rise in international passenger numberswhich increased by 7.6 per cent.• Total aeronautical revenue increased by 5.0 per cent in 2011-12 to $243.6 million.• Aeronautical revenue per passenger, used by the ACCC as an alternative measure foraverage prices, increased in 2011-12 by 4.8 per cent to $8.58 per passenger.• Total aeronautical operating expenses increased by 17.5 per cent in 2011-12 to$147.6 million. The increase in total aeronautical operating expenses was mainly driven byincreases in salaries and depreciation expenses. Aeronautical operating expenses perpassenger increased by 17.3 per cent to $5.20.• Total aeronautical operating margin decreased by 9.7 per cent in 2011-12 to $96.0 million.On a per passenger basis, the decrease was 9.9 per cent to $3.38.• Aeronautical services return on non-current assets decreased by 2.2 percentage points to10.1 per cent in 2011-12.• Many prices at Melbourne Airport car parks changed. Some prices at the short-term, theuncovered and multi-level long-term car parks increased. Prices at the airport’s businesscar park decreased. Other prices remained unchanged.• Car parking revenue was relatively constant in 2011-12, increasing 0.1 per cent to$114.7 million. However, car parking revenue per car park space increased by 2.3 per centto $5231 per car park space, due mainly to a fall in car parking spaces.• Total car parking operating margin was also relatively constant in 2011-12, decreasing by0.6 per cent to $86.4 million.• Major investments completed at Melbourne Airport during 2011-12 included the fitting outof several departure gates in the international terminal, works on the existing baggagereclaim area of the international terminal and an alternative road exiting the airport precinct,staff car park and long-term car park.• In 2011-12, additions to aeronautical tangible non-current assets were $155.8 million,equivalent to 15.5 per cent of total tangible aeronautical non-current assets.• Melbourne Airport’s overall rating for quality of service decreased during 2011-12 within thesatisfactory range.• Other quality of service rating outcomes for Melbourne Airport include:− Average rating for the international terminal decreased but remained rated assatisfactory.− Average rating for the domestic terminal also decreased, but also remained ratedas satisfactory.− Average rating for other airport services decreased slightly, but remained rated assatisfactory.
  • 257. Melbourne Airport monitoring results Airport Monitoring Report 2011-12232This chapter presents the detailed prices monitoring, financial performance and quality ofservice monitoring results in relation to the supply of aeronautical services and car parkingservices at Melbourne Airport. This chapter is structured as follows:• Overview of aeronautical and car parking monitoring results (section 6.1)• Airport overview and major airport investments (section 6.2)• Aeronautical services prices monitoring and financial performance results (section 6.3)• Aeronautical services quality of service monitoring results (section 6.4)• Car parking services monitoring results (section 6.5).6.1 Overview of aeronautical and car parkingmonitoring results6.1.1 Key aeronautical services indicators for 2011-12Table 6.1.1: Melbourne Airport—key aeronautical services indicatorsPassengernumbers(million)Totalaeronauticalrevenue($million)Aeronauticalrevenue perpassenger($)Totalaeronauticaloperatingmargin($million)Aeronauticaloperatingmargin perpassenger($)Aeronauticalrevenue as a% of totalairportrevenue(%)2010-11 28.3 231.9 8.19 106.3 3.75 42.52011-12 28.4 243.6 8.58 96.0 3.38 42.5%change ▲ 0.2% ▲ 5.0% ▲ 4.8% ▼ 9.7% ▼ 9.9% 0.0ppTable 6.1.1: Melbourne Airport—key aeronautical services indicators (cont...)Totaltangibleaeronauticalnon-currentassets($million)Rate ofreturn ontangibleaeronauticalnon-currentassets(%)Averagequality ofservicerating foravailabilityof airportservicesAveragequality ofservicerating forstandard ofairportservicesAirlinerating forquality ofservicePassengerrating forquality ofservice2010-11 898.5 12.3 3.82 3.54 3.01 4.102011-12 1007.1 10.1 3.36 3.56 3.14 4.06%change ▲ 12.1% ▼ 2.2pp ▼ 12.0% ▲ 0.5% ▲ 4.4% ▼ 0.8%
  • 258. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results2336.1.2 Key car parking services indicators for 2011-12Table 6.1.2: Melbourne Airport—car parking prices as at 30 JuneShort-term car parking Long-term car parking1 hour 3 hours 8 hours 24 hours 1 day 3 days 7 days2010-11 $12.00 $28.00 $52.00 $52.00 $29.00 $69.00 $77.002011-12 $12.00 $28.00 $55.00 $55.00 $29.00 $69.00 $77.00%change 0.0% 0.0% ▲ 5.8% ▲ 5.8% 0.0% 0.0% 0.0%Table 6.1.3: Melbourne Airport—car parking services indicatorsNumber ofcar parkspaces(thousand)Total carparkingrevenue($million)Car parkingrevenue percar parkspace($)Total carparkingoperatingmargin($million)Car parkingoperatingmargin percar parkspace($)Car parkingrevenue as a% of totalairportrevenue(%)2010-11 22.4 114.6 5115 86.9 3 878 21.02011-12 21.9 114.7 5231 86.4 3 942 20.0%change ▼ 2.2% ▲ 0.1% ▲ 2.3% ▼ 0.6% ▲ 1.6% ▼ 1.0ppTable 6.1.3: Melbourne Airport—car parking services indicators (cont...)Landsideaccessrevenue($million)Landsideaccessrevenue asa % of totalairportrevenue(%)Passengerrating foravailabilityof airportcar parkingPassengerrating forstandard ofairport carparkingPassengerrating fortime takento enterairport carpark2010-11 6.6 1.2 3.88 3.93 4.152011-12 7.0 1.2 3.92 3.92 4.10%change ▲ 6.4% 0.0pp ▲ 1.0% ▼ 0.3% ▼ 1.2%
  • 259. Melbourne Airport monitoring results Airport Monitoring Report 2011-122346.2 Airport overview and major airport investmentsThis section presents information about Melbourne Airport, along with activity and investment in2011-12. This includes: passenger / traffic mix (section 6.2.1); terminal configurations and carparking facilities (section 6.2.2); and major airport investments (section 6.2.3).6.2.1 Passenger / traffic mixIn 2011-12 over 28 million passengers travelled through the airport. Around 75.6 per cent ofpassengers were travelling domestically and 24.4 per cent were international passengersincluding transit passengers (chart 6.2.1).Chart 6.2.1: Melbourne Airport passenger mix, 2011-126.2.2 Terminal configurations and car parking facilitiesTerminal configurationsMelbourne Airport has one international terminal and three domestic terminals:• The Qantas domestic terminal (T1) is occupied and operated by Qantas under a domesticterminal lease (DTL), is not subject to monitoring and therefore data on passenger-relatedservices and facilities provided within this terminal are not included in the ACCC’smonitoring results.• The international terminal (T2) is a common-user terminal used by all international airlinesflying to and from Melbourne Airport. This terminal is subject to monitoring and is includedin the ACCC’s monitoring results.• The T3 common-user domestic terminal is currently used by Virgin Blue, Regional Express(REX) and Skywest, is subject to monitoring and is included in the monitoring results75.5%23.9%0.5%0.1%DomesticpassengersInternational passengers(excluding transit passengers)International transit passengersDomesticon-carriage
  • 260. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results235• The T4 common-user domestic terminal has been used by Tiger Airways since November2007.139This terminal is subject to monitoring and is also included in the ACCC’smonitoring results.Prior to 2009-10 quality of service monitoring results for the T3 and T4 common-user domesticterminals were combined. In this report, the results have been separated, with the T3monitoring results presented in section 6.4.3 and the T4 monitoring results presented insection 6.4.4.Car parking facilitiesMelbourne Airport provides combined car parking facilities for domestic and internationalpassengers.The airport has five car parking facilities, including undercover short-term and multi-levellong- term parking opposite the terminals, a long-term car park that is serviced by a shuttle bus,and business and ‘express’ car parks within walking distance of the terminals.Melbourne Airport also offers a ‘Ring & Ride’ waiting zone service for drivers to temporarily waitfor passengers at lower or no cost.6.2.3 Major airport investmentsAeronautical services and facilitiesMelbourne Airport undertook a number of investment projects in its aeronautical services andfacilities in 2011-12, including:• The fit-out of several departure gates in the international terminal (T2).• Works in the existing baggage reclaim area of T2 and in an expansion area, including theremoval of a plant room, which increased the processing area for Australian Customs andBorder Protection Service (AC&BPS) and the Department of Agriculture, Fisheries andForestry, Biosecurity (DAFF Biosecurity) and increased overall circulation space of thearea.• Runway overlays were conducted as part of the regular maintenance cycle.• An alternative road exiting the airport precinct, allowing users to exit the freight precinct,staff car park and long-term car park. This was completed in July 2012.• Additional work in expanding rooms for AC&BPS search and interview functions at T2,completed in December 2011.Planned investments in aeronautical services and facilities at Melbourne Airport beyond2011-12 include:• The relocation of ground services equipment to the northern end of the airfield to allow foradditional aircraft parking. This was commenced in July 2012 and completed in October2012.139Melbourne Airport, ‘Tiger Airways’ new home opens at Melbourne Airport’, media release, 8 October 2007
  • 261. Melbourne Airport monitoring results Airport Monitoring Report 2011-12236• The expansion of the airside road between the existing freight apron area and future freightareas, scheduled to be completed in May 2013.• Apron F works including the addition of parking spaces for aircraft at the southern end ofthe airfield, scheduled to be completed in September 2013.• Replacement of fittings throughout T3 including floor coverings, seating, lighting and flightinformation display screens, scheduled to be completed in December 2013.Car parking and landside access servicesInvestments in car parking and landside access services undertaken at Melbourne Airport in2011-12 include:• A project relocating corporate drivers from the area just outside the terminal to the smallercar parking areas adjacent to the terminal.• An expansion of the long-term car park to increase public and staff parking by around 2400spaces, scheduled to be completed in March 2013.Planned investments in car parking and landside access services at Melbourne Airport beyond2011-12 include:• The expansion of Francis Briggs road to improve access for non-passenger vehicles to andfrom the airport, scheduled to be completed in May 2013.• A widening of Terminal Drive, the main access road to the airport, to provide additionalcapacity for making turns to exit the road. This is scheduled to be completed in March2013.• Adding two extra lanes to the forecourt area in order to expand access options.6.3 Aeronautical prices monitoring and financialperformance resultsThis section presents prices monitoring and financial reporting results for aeronautical servicesand for total airport services, including activity levels (section 6.3.1); prices (section 6.3.2);revenues, costs and profits (sections 6.3.3 and 6.3.4); government mandated security services(section 6.3.5); assets (section 6.3.6) and rates of return on tangible non-current assets(section 6.3.7).
  • 262. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results2376.3.1 ActivityChart 6.3.1: Melbourne Airport—volume of passengers, tonnes landed and aircraftmovements, 2001-02 to 2011-12140Key observations from chart 6.3.1 include:• In 2011-12 the number of passengers, tonnes landed and aircraft movements remained atsimilar levels to the previous year.• Passenger numbers remained relatively constant in 2011-12 after increasing by about7.8 per cent in the previous year and by 6.1 per cent in 2009-10. Passenger numbersincreased by 0.2 per cent in 2011-12 to 28.4 million passengers. This was partly due tointernational passengers (including transit passengers) increasing by 7.6 per cent to6.9 million passengers and domestic passengers (including domestic on-carriagepassengers) decreasing by 2.0 per cent to 21.4 million passengers.− Melbourne Airport has stated that the decrease in domestic passengers in 2011-12reflected some of the difficulties experienced by domestic operators during theyear.141In particular, Melbourne Airport pointed to the cessation of services byTiger Airways at the airport between 2 July 2011 and 10 August 2011, as well asthe Qantas grounding and associated industrial issues.− Over the 11 years to 2011-12 passenger numbers passing through MelbourneAirport increased by 72.1 per cent, from around 16.5 million in 2001-02 to around28.4 million in 2011-12.• The volume of tonnes landed at Melbourne Airport in 2011-12 was also similar to that of theprevious year. This follows increases of 6.7 per cent and 4.2 per cent for tonnes landed in2010-11 and 2009-10 respectively. The volume of tonnes landed has steadily increasedover time, from around 7.7 million tonnes in 2001-02 to just under 10.8 million tonnes in2011-12, or around 40.2 per cent.140Data in chart 6.3.1 is not comparable to chart 6.2.1 as international transit passengers have been included asinternational passengers and domestic on-carriage passengers have been included as domestic passengers.141Melbourne Airport, Melbourne Airport achieves 8 per cent international growth for 2011/12, Media Release, 24 July2012. See: http://melbourneairport.com.au/News-Events/News-Events-Archive/2012/melbourne-airport-achieves-8-per-cent-international-growth-for-2011-12.html.030609012015018021024004 0008 00012 00016 00020 00024 00028 00032 0002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12Numberofaircraftmovements(thousand)Numberofpassengers/tonneslanded(thousand)DomesticPassengers International Passengers Tonnes landed Aircraft movements(RHS)
  • 263. Melbourne Airport monitoring results Airport Monitoring Report 2011-12238• Aircraft movements increased by 0.5 per cent to 207 070 movements in 2011-12 afterincreasing by 5.2 per cent in the previous year. Since 2001-02, aircraft movementsincreased by 31.4 per cent, from around 157 570 movements.6.3.2 PricesTable 6.3.1 presents the average aeronautical charges at Melbourne Airport from 2007-08 to2011-12 as well as the indexed average list prices for that period (with 2007-08 as the baseyear).142142Where a list price changed during the financial year, the average of that charge has been reported in the table.
  • 264. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results239Table 6.3.1: Melbourne Airport—schedule of average aeronautical charges and indexed average list prices (including GST), 2007-08 to 2011-12Average list prices($)Indexed average list prices(2007-08 as base year)2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12Landing chargeT2 international terminal (for passenger aircraftutilising international terminal operated byMelbourne Airport) (per passenger)13.75 14.36 14.65 15.06 15.59 100.0 104.4 106.5 109.5 113.4Other (for passenger aircraft not utilisinginternational terminal operated by MelbourneAirport) (per passenger)3.81 3.81 3.81 3.81 3.81 100.0 100.0 100.0 100.0 100.0Common user domestic terminals (per passenger) 4.79 5.03 4.92 4.99 5.07 100.0 105.0 102.7 104.2 105.8International freight (per MTOW)(a)7.46 7.79 7.95 8.17 8.46 100.0 104.4 106.6 109.5 113.4Domestic freight (per MTOW)(a)7.46 7.79 7.95 8.17 8.46 100.0 104.4 106.6 109.5 113.4General aviation (per MTOW)(a)13.99 14.61 14.91 15.33 15.87 100.0 104.4 106.6 109.6 113.4Aircraft parking (per 15 minutes)(b)32.00 33.42 34.10 35.06 36.29 100.0 104.4 106.6 109.6 113.4Pre conditioned air (per hour)(c)NA 235.40 218.02 224.77 224.77 NA 100.0 92.6 95.5 95.5Check-in desks (per hour) 23.41 24.45 24.95 25.65 26.55 100.0 104.4 106.6 109.6 113.4Government mandated security chargesInternational terminal passenger screening (includescheck baggage screening (per passenger)5.00 4.58 4.54 4.44 4.15 100.0 91.6 90.8 88.8 83.0Common user domestic terminals passenger screening(includes check baggage screening) (per passenger)2.53 2.46 3.06 3.00 2.93 100.0 97.2 120.9 118.6 115.8
  • 265. Melbourne Airport monitoring results Airport Monitoring Report 2011-12240Average list prices($)Indexed average list prices(2007-08 as base year)2007-08 2008-09 2009-10 2010-11 2011-12 2007-08 2008-09 2009-10 2010-11 2011-12Airport security charge - passengers (per passenger) NA 0.29 0.27 0.26 0.23 NA 100.0 93.1 89.7 79.3Airport security charge - freighters and general aviation(per MTOW)NA 0.29 0.27 0.26 0.23 NA 100.0 93.1 89.7 79.3Minimum chargesInternational and domestic freight minimum charge (perlanding)150.00 156.65 159.86 164.35 170.10 100.0 104.4 106.6 109.6 113.4General aviation minimum charge (per landing) 205.00 214.08 218.47 224.61 232.74 100.0 104.4 106.6 109.6 113.5Notes: NA Not applicable.(a) Minimum charge applies.(b) Applicable after the first three hours of parking from 1 July 2007 (was applicable after the first six hours of parking prior to 1 July 2007).(c) This charge was introduced in July 2008..
  • 266. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results241Key observations from table 6.3.1 include:• In 2011-12 the majority of Melbourne Airport’s list prices for its aircraft related services andfacilities increased. A small number of charges either remained constant or decreased fromthe previous year. Melbourne Airport has in place formal five-year pricing agreements withairlines for aircraft-related services and facilities.143• Similar to each of the past four years, international landing charges increased in 2011-12while domestic landing charges at Melbourne Airport remained constant at $3.81 perpassenger. International landing charges increased by around 3.5 per cent to $15.59 perpassenger.• Freight related charges increased by around 3.5 per cent to $8.46 per MTOW for bothinternational and domestic freight services in 2011-12. Charges for aircraft parking,check-in desks and general aviation also increased from the previous year.• Common user domestic terminal charges increased from $4.99 per passenger to $5.07 perpassenger in 2011-12.• Security related charges decreased from the previous year.− Domestic terminal passenger screening charges fell from $3.00 per passengerto $2.93 per passenger. This is the lowest charge for domestic screening since2008-09.− International passenger and baggage screening charges have declined each yearsince 2007-08 and were $4.15 per passenger in 2011-12, compared with $4.44 perpassenger in 2010-11.6.3.3 Revenues, costs and profits for aeronautical services and thetotal airportAs noted, the ACCC required airport operators to provide additional information relating to theaeronautical asset base under the ‘line in the sand’ approach for the first time in 2007-08.Under this approach, the value of an airport’s aeronautical asset base for monitoring purposesis the value of tangible non-current aeronautical assets reported to the ACCC as at 30 June2005, plus new investments, less depreciation and disposals.Melbourne Airport advised in its regulatory accounts that a schedule of line in the sand valuesfor aeronautical assets is not required. Melbourne Airport’s total aeronautical asset base usedfor the regulatory accounts matches the line in the sand aeronautical asset base valuesrequired by the ACCC and, for the purposes of its regulatory accounts, Melbourne Airport doesnot record revaluations of its aeronautical assets. Therefore, line in the sand measures are notseparately reported for Melbourne Airport in this report.Table 6.3.2 outlines the revenues, operating expenses and operating margins for aeronauticalservices and the total airport from 2001-02 to 2011-12.143The prices are determined using a cost based building block methodology, and prices are adjusted by CPI duringthe term of the agreement. The current agreement for aircraft related services and facilities expired in 2012.
  • 267. Melbourne Airport monitoring results Airport Monitoring Report 2011-12242Table 6.3.2: Melbourne Airport—revenues, operating expenses and operating margins for aeronautical services and total airport services,2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue($million)Aeronautical 65.7 100.5 121.1 137.1 144.4 159.6 187.4 197.1 212.0 231.9 243.6Total airport 196.9 237.2 279.4 315.1 338.9 373.8 437.5 462.6 503.0 545.4 573.3Operating expenses($million)Aeronautical 57.6 60.5 66.5 73.5 78.1 86.7 94.9 102.7 113.3 125.6 147.6Total airport 92.8 104.3 118.3 123.8 136.7 145.4 149.2 160.7 175.5 194.5 219.3Operating margin($million)Aeronautical 8.1 40.0 54.5 63.5 66.2 72.9 92.5 94.4 98.7 106.3 96.0Total airport 104.2 133.0 161.1 191.3 202.2 228.5 288.3 302.0 327.5 350.9 354.0Operating margin asa % of revenueAeronautical 12.3 39.8 45.0 46.3 45.8 45.7 49.4 47.9 46.6 45.8 39.4Total airport 52.9 56.1 57.7 60.7 59.7 61.1 65.9 65.3 65.1 64.3 61.7
  • 268. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results243Key observations from table 6.3.2 include:• Total aeronautical revenue and operating expenses increased at Melbourne Airport in2011-12, while operating margins decreased.• Revenue from aeronautical services was $243.6 million in 2011-12, increasing by around5.0 per cent from the previous year. Over the period from 2001-02 to 2011-12 aeronauticalrevenue increased by an average of 14.0 per cent per year.• Aeronautical operating expenses increased by around 17.5 per cent to $147.6 million in2011-12. Aeronautical operating expenses increased by an average of 9.9 per cent peryear over the 11 years to 2011-12. Depreciation and amortisation recorded the largestincrease, up by 25.6 per cent to $53.8 million, followed by salaries and wages which roseby 19.7 per cent to $21.7 million.− Melbourne Airport has noted that increases in these cost categories were driven byactivities associated with the airport’s expansion, specifically investing in newaeronautical assets and accommodating passenger growth.− Average salaries increased by around 9.4 per cent during 2011-12. MelbourneAirport noted that this was due to staff numbers moving in both the planning andconstruction areas during the year, has is in line with its current and futuredevelopment requirements. Melbourne Airport also noted that changes inoperational staff numbers are in line with the need to operate an airport withincreasing congestion.• Melbourne Airport’s operating margin for aeronautical services decreased by around$10.3 million (9.7 per cent) to $96 million in 2011-12. Revenue increased moderately whileoperating expenses increased at an above average rate. This is the first year since2001-02 where Melbourne Airport’s operating margin on aeronautical services decreased.Excluding 2011-12, operating margin on aeronautical services increased by an average of$10.9 million each year since 2001-02.• Melbourne Airport’s operating margin for total airport services increased by 0.9 per cent to$354.0 million in 2011-12, up from $350.9 million in 2010-11.
  • 269. Melbourne Airport monitoring results Airport Monitoring Report 2011-12244Chart 6.3.2: Melbourne Airport—aeronautical services and non-aeronautical servicesshare of total airport revenue, 2001-02 to 2011-12Key observations from chart 6.3.2 include:• Aeronautical revenue as a proportion of total airport revenue remained at around42.5 per cent in 2011-12.• Excluding 2001-02, when aeronautical revenue accounted for around 33.4 per cent of totalairport revenue, revenue from aeronautical services has averaged around 42.7 per cent oftotal airport revenue.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—aeronautical Revenue—non-aeronautical
  • 270. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results2456.3.4 Average revenues, costs and profits for aeronautical servicesChart 6.3.3: Melbourne Airport—revenues, operating expenses and operatingmargins for aeronautical services on a per passenger basis,2001-02 to 2011-12Key observations from chart 6.3.3 include:• Aeronautical revenue and operating expenses on a per passenger basis continued toincrease at Melbourne Airport in 2011-12, while the operating margin per passengerdecreased for the fourth consecutive year.• Aeronautical revenue per passenger increased by 4.8 per cent to $8.58 per passenger in2011-12. Notably, passenger numbers remained relatively constant between 2010-11 and2011-12, while passenger numbers had increased each year by around 5.6 per cent since2001-02.− Since 2001-02, aeronautical revenue per passenger has increased by an averageof 8.0 per cent per annum. This is partly due to a 53.0 per cent increase inaeronautical revenue during 2002-03 following the removal of price caps atMelbourne Airport on 1 July 2002. Since 2002-03, aeronautical revenue perpassenger has increased by an average of 4.2 per cent per annum.• Operating expenses per passenger for aeronautical services increased by 17.3 per cent to$5.20 per passenger in 2011-12, representing the largest increase in operating expensesover the time period.− Since 2001-02, aeronautical operating expenses per passenger increased byaround 4.1 per cent on average each year.• Aeronautical operating margin per passenger decreased from $3.75 in 2010-11 to $3.38 in2011-12 (9.9 per cent), following decreases in operating margin in each of the previousthree years. In 2011-12 the main driver behind lower margins was higher operatingexpenses.• Over the four year period since 2008-09, aeronautical operating expenses have risen by agreater extent compared to aeronautical revenues: aeronautical operating expenses$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerRevenue Expenses Margin
  • 271. Melbourne Airport monitoring results Airport Monitoring Report 2011-12246increased by $1.05 per passenger while aeronautical revenue increased by only $0.63 perpassenger, leading to declining operating margins in recent years.6.3.5 Government mandated security servicesGovernment mandated security charges are directly related to the government mandatedsecurity levels. Melbourne Airport commented that security charges represent a pass-throughof costs to airlines and, therefore, increases or decreases in revenues or expenses do not haveany impact on the long-term profitability of the airport.Table 6.3.3 outlines the revenues, operating expenses and operating margins for governmentmandated security services and aeronautical services from 2001-02 to 2011-12.
  • 272. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results247Table 6.3.3: Melbourne Airport—revenues, operating expenses and operating margins from government mandated security services andaeronautical services, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Revenue($million)Security services 9.4 10.3 10.5 13.4 14.7 13.7 20.5 24.2 29.2 28.9 28.8Total aeronautical 65.7 100.5 121.1 137.1 144.4 159.6 187.4 197.1 212.0 231.9 243.6Operatingexpenses($million)Security services 8.5 10.3 10.5 13.4 14.6 14.4 21.6 25.2 25.8 27.6 29.2Total aeronautical 57.6 60.5 66.5 73.5 78.1 86.7 94.9 102.7 113.3 125.6 147.6Operating margin($million)Security services 0.9 (0.0) 0.0 0.0 0.0 (0.6) (1.2) (1.0) 3.4 1.3 (0.4)Total aeronautical 8.1 40.0 54.5 63.5 66.2 72.9 92.5 94.4 98.7 106.3 96.0Revenue perpassenger($)Security services 0.57 0.61 0.55 0.65 0.68 0.61 0.84 0.98 1.11 1.02 1.01Total aeronautical 3.98 5.94 6.32 6.60 6.74 7.10 7.73 7.96 8.06 8.19 8.58Operating expenseper passenger($)Security services 0.52 0.61 0.55 0.64 0.68 0.64 0.89 1.02 0.98 0.97 1.03Total aeronautical 3.49 3.57 3.47 3.54 3.65 3.85 3.91 4.15 4.31 4.43 5.20Operating marginper passenger($)Security services 0.05 (0.00) 0.00 0.00 0.00 (0.03) (0.05) (0.04) 0.13 0.05 (0.01)Total aeronautical 0.49 2.36 2.85 3.06 3.09 3.24 3.81 3.81 3.76 3.75 3.38
  • 273. Melbourne Airport monitoring results Airport Monitoring Report 2011-12248Key observations from table 6.3.3 include:• Total security revenue decreased at Melbourne Airport for the second consecutive year,declining by 0.3 per cent to $28.8 million in 2011-12. Prior to 2010-11, security revenuegenerally increased each year. On average, over the 11 years since 2001-02, securityrevenue increased by around 11.8 per cent each year.• The largest increase in security revenue occurred in 2007-08 when it increased by about48.9 per cent following significant increases in domestic and international screeningcharges, of about 37.3 per cent and 47.1 per cent respectively.• In 2011-12 total security operating expenses increased by around 5.9 per cent from theprevious year to $29.2 million. Over the period since 2001-02 security operating expensesincreased by around 13.1 per cent each year on average, including an increase of about50.3 per cent in 2007-08.• On a per passenger basis, security revenue decreased to $1.01 per passenger(-0.5 per cent) in 2011-12 while security operating expenses increased to $1.03 perpassenger (5.7 per cent). Revenue per passenger was down again from a reporting periodhigh of $1.11 per passenger in 2009-10 when revenue per passenger peaked due to alower number of passengers. Expenses per passenger, however, reached their highestlevel in 2011-12.• Security services operating margins have been negative in a number of years, including in2011-12.Chart 6.3.4: Melbourne Airport—government mandated security services share oftotal aeronautical services revenue, 2001-02 to 2011-12Key observations from chart 6.3.4 include:• In 2011-12 security revenue as a proportion of total aeronautical revenue decreasedslightly to 11.8 per cent from about 12.5 per cent in 2010-11. While revenue fromaeronautical services increased by 5.0 per cent from the previous year, revenue derivedfrom security services declined slightly.01020304050607080901002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentRevenue—aeronautical (excl. security) Revenue—security
  • 274. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results249• As a proportion of aeronautical revenue, security revenue has ranged between around8.6 per cent and 14.3 per cent over the 11 years since 2001-02.Chart 6.3.5: Melbourne Airport—aeronautical services revenue, operating expensesand operating margin excluding government mandated security serviceson a per passenger basis, 2001-02 to 2011-12Key observations from chart 6.3.5 include:• Excluding government mandated security services, aeronautical revenue, operatingexpenses and operating margin on per passenger basis all increased at Melbourne Airportin 2011-12.• Excluding government mandated security services, aeronautical revenue increased byabout 5.6 per cent from $7.17 per passenger in 2010-11 to $7.57 per passenger in2011-12.• Aeronautical operating expenses at Melbourne Airport, excluding security services,increased by around 20.5 per cent from $3.46 per passenger in 2010-11 to $4.17 perpassenger in 2011-12.• As a result of operating expenses increasing by more than revenue, aeronautical operatingmargin per passenger (excluding security services) decreased from $3.71 in 2010-11 to$3.40 in 2011-12 (a decrease of 8.3 per cent).• Aeronautical services operating margin per passenger (excluding security services)increased from 2001-02 until reaching their highest level of $3.86 per passenger in2007-08. In recent years the operating margin for aeronautical services has declinedslightly.6.3.6 Assets for aeronautical services and total airport servicesTable 6.3.4 outlines Melbourne Airport’s tangible non-current assets for aeronautical servicesand the total airport from 2001-02 to 2011-12.-$2.00$0.00$2.00$4.00$6.00$8.00$10.002001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PerpassengerRevenue Expenses Margin
  • 275. Melbourne Airport monitoring results Airport Monitoring Report 2011-12250Table 6.3.4: Melbourne Airport—tangible non-current assets for aeronautical services and total airport services, 2001-02 to 2011-122001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Investmentproperty($million)Aeronautical 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Total airport 0.0 0.0 0.0 0.0 0.0 856.8 879.8 858.0 871.1 944.4 993.4Land($million)Aeronautical 50.8 50.3 49.7 49.2 48.7 46.8 46.2 45.7 47.1 46.5 45.9Total airport 108.7 107.8 106.9 105.7 104.6 59.1 58.4 57.7 59.0 58.3 57.5Property, plant andequipment($million)Aeronautical 375.9 375.0 370.8 424.4 448.8 489.5 546.7 683.6 785.9 852.0 961.1Total airport 616.1 630.9 631.4 713.2 757.8 727.2 829.1 990.3 1 096.1 1 183.6 1 288.8Intangibles($million)Aeronautical 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Total airport 600.3 592.1 584.9 576.5 695.4 667.7 667.7 667.7 667.7 667.7 667.7Other tangiblenon-current assets($millon)Aeronautical 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Total airport 26.0 16.6 0.0 0.0 3.5 1.2 14.4 0.0 0.0 0.0 7.4Total tangible non-current assets($million)Aeronautical 426.7 425.2 420.5 473.6 497.5 536.2 593.0 729.3 833.0 898.5 1 007.1Total airport 750.8 755.3 738.3 818.9 865.9 1 644.3 1 781.6 1 906.1 2 026.2 2 186.2 2 347.0Total non-currentassets($million)Aeronautical 426.7 425.2 420.5 473.6 497.5 536.2 593.0 729.3 833.0 898.5 1 007.1Total airport 1 351.1 1 347.3 1 323.3 1 395.4 1 561.3 2 312.0 2 449.3 2 573.8 2 693.9 2 853.9 3 014.7
  • 276. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results251Key observations from table 6.3.4 include:• Total aeronautical tangible non-current assets at Melbourne Airport increased by12.1 per cent, from $898.5 million in 2010-11 to $1.0 billion in 2011-12. Notably, MelbourneAirport has not reported aeronautical intangible non-current assets over the reportingperiod.• The increase in aeronautical tangible non-current assets in the most recent period wasattributable to an increase in property, plant and equipment of 12.8 per cent, to$961.1 million in 2011-12. The value of land depreciated by about $0.57 million(1.2 per cent) to $45.9 million in 2011-12. No other non-current assets classified asaeronautical were reported by Melbourne Airport over the reporting period.− In 2011-12 depreciation of aeronautical tangible non-current assets totalled$53.8 million. This compares with depreciation of $42.8 million and $34.2 million in2010-11 and 2009-10 respectively.• Since 2001-02 the value of aeronautical tangible non-current assets has increased by$580.4 million, or by around 136.0 per cent. The largest year-on-year increase occurred in2008-09 when aeronautical tangible non-current assets increased by $136.4 million, or23.0 per cent (see chart 6.3.6).• Non-current assets for the total airport increased by 5.6 per cent to around $3.0 billion in2011-12. Excluding intangibles (i.e. goodwill), non-current assets for the total airportincreased by 7.4 per cent to around $2.3 billion in 2011-12.• Total airport non-current assets increased in most years over the reporting period. Themain items increasing the value of non-current assets were property, plant and equipmentand investment property, as the value of land has slightly decreased and the value ofintangibles have remained relatively stable.Chart 6.3.6: Melbourne Airport—additions as a percentage of tangible non-currentassets for aeronautical and total airport services, 2001-02 to 2011-120%5%10%15%20%25%2001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentAeronautical services Total airport
  • 277. Melbourne Airport monitoring results Airport Monitoring Report 2011-12252Key observations from chart 6.3.6 include:• In 2011-12, additions to aeronautical tangible non-current assets represented about15.5 per cent of total aeronautical tangible non-current assets. Additions to aeronauticalassets included buildings ($85.0 million), land improvement ($74.3 million) and plant andmachinery ($52.2 million). Work in progress decreased by $54.8 million.• Additions to total airport tangible non-current assets represented about 7.5 per cent of totalairport tangible non-current assets in 2011-12. Additions to total airport assets includedbuildings ($95.3 million), land improvements ($79.9 million) and plant and machinery($60.5 million). Work in progress decreased by $58.9 million.• Since 2001-02, annual additions to aeronautical tangible non-current assets and totalairport tangible non-current assets have varied. In 2003-04 additions to aeronautical assetsrepresented about 4.7 per cent of aeronautical tangible non-current assets and additions tototal airport assets represented about 5.1 per cent of the total airport tangible non-currentassets. In 2008-09, however, additions represented around 22.1 per cent of aeronauticaltangible non-current assets and about 10.8 per cent of total airport tangible non-currentassets.• Over the 11 years to 2011-12, new buildings comprised 37.7 per cent of total aeronauticaladditions, land improvement contributed 32.1 per cent and plant and machinery contributed25.7 per cent of total additions made to Melbourne Airport’s aeronautical tangiblenon-current assets.6.3.7 Rates of return on tangible non-current assetsChart 6.3.7: Melbourne Airport—rate of return (EBITA) on tangible non-current assetsfor aeronautical services and total airport services, 2001-02 to 2011-12Key observations from chart 6.3.7 include:• Earnings before interest, tax and amortisation (EBITA) on average tangible non-currentassets for both aeronautical and total airport services decreased in 2011-12.• EBITA on average tangible non-current assets for aeronautical services decreased by2.2 percentage points from 12.3 per cent in 2010-11 to 10.1 per cent in 2011-12.05101520252001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–12PercentperannumAeronautical services Total airport
  • 278. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results253• Over the 11 years since 2001-02, EBITA on average tangible non-current assets foraeronautical services increased to over 16 per cent in 2007-08, but then declined in eachsubsequent year. The recent decline in the ratio largely reflects the increase in the value ofMelbourne Airport’s aeronautical non-current assets, which have increased by69.8 per cent compared to a 3.8 per cent increase in EBITA from 2007-08 to 2011-12.• For total airport services, EBITA on average tangible non-current assets decreased by justover 1.0 percentage point from 16.7 per cent in 2010-11 to 15.6 per cent in 2011-12.• Over the whole reporting period, EBITA on average tangible non-current assets for totalairport services increased to over 24 per cent in 2004-05, but decreased in 2006-07 andaveraged around 16.4 per cent over the five years to 2011-12.6.4 Aeronautical services quality of servicemonitoring resultsThis section presents the quality of service monitoring results for Melbourne Airport. Resultsare presented in terms of the average quality of service as well as for the international anddomestic services provided by the airport.6.4.1 Average ratings for quality of serviceChart 6.4.1: Melbourne Airport—average quality of service ratings for internationaland domestic terminal services, and other airport services,2007-08 to 2011-12Key observations from chart 6.4.1 include:• Melbourne Airport’s average quality of service ratings for international and domesticterminal services were slightly lower in 2011-12, but remained in the satisfactory range.• Other airport services were also rated as satisfactory, remaining at a similar level with theprevious year.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of international terminal Rating of domestic terminal Rating of other airport servicesExcellentGoodPoorVery poorSatisfactory
  • 279. Melbourne Airport monitoring results Airport Monitoring Report 2011-12254• Over the five years to 2011-12 the average quality of service for international and domesticterminal services, and other airport services have been rated by airlines, passengers andborder agencies as satisfactory.Chart 6.4.2: Melbourne Airport—average quality of service ratings for availability andstandard of airport services, 2007-08 to 2011-12Key observations from chart 6.4.2 include:• In 2011-12 the average availability and standard of airport services were again rated assatisfactory, although the availability was rated at a lower level and the standard ratedslightly higher compared to the previous year.• On average, from 2007-08 to 2011-12, airlines, passengers and border agencies rated theavailability and standard of Melbourne Airport’s services as satisfactory.01234562007–08 2008–09 2009–10 2010–11 2011–12AverageratingRating of availability Rating of standardExcellentGoodPoorVery poorSatisfactory
  • 280. Airport Monitoring Report 2011-12 Melbourne Airport monitoring results2556.4.2 International servicesChart 6.4.3: Melbourne Airport—check-in (international services), 2007-08 to 2011-12Key observations from chart 6.4.3 include:• Airlines rated both the availability and standard of international check-in services assatisfactory in 2011-12. Airlines’ rating of the availability of check-in services increasedfrom poor in the previous year. The standard of international check-in facilities wasconsistently rated as satisfactory by airlines over the last five years, although the averagerating in the last two years was lower than the rating observed in 2007-08.− In commentary to the surveys, airlines noted that check-in facilities were generallyavailable, although a number of airlines raised concerns over congestion in thecheck-in area. A number of airlines expressed concerns over limited queue space,particularly during peak periods, resulting in overcrowding and congestion. Airlinesalso commented that the infrastructure is old and inefficient.• Consistent with the previous four years, passengers rated check-in waiting time at theinternational terminal as good in 2011-12.• The percentage of hours with more than 80 per cent of check-in desks in use was lower in2011-12 as the number of hours where more than 80 per cent of desks where utilised fellfrom 152 in 2010-11 to 76 in 2011-12.− Melbourne Airport noted that the number of check-in desks available in theinternational terminal increased from 92 desks in 2009-10 to 116 desks in 2011-12.The airport noted that the recent upgrade contributed to the reduction in hourswhen more than 80 per cent of desks were in use.− Melbourne Airport also commented that airlines influence the quality of check-inservices by providing their technology systems, equipment and personnel to staffthe check-in desks. The airport also noted that airlines nominated the hours andnumber of desks for the check-in process.0%1%2%3%4%5%6%01234562007–08 2008–09 2009–10 2010–11 2011–12Percentageofhoursutilisedover80%AverageratingAirline surveys— rating of check-in availabilityAirline surveys— rating of check-in standardPassenger surveys— ratingof check-in waiting timePercentageof hours with more than80 per cent of check-in desks in use(RHS)ExcellentGoodPoorVery poorSatisfactory
  • 281. Melbourne Airport monitoring results Airport Monitoring Report 2011-12256Chart 6.4.4: Melbourne Airport—inbound government inspection (internationalservices), 2007-08 to 2011-12Key observations from chart 6.4.4 include:• In 2011-12 border agencies continued to rate both the availability and standard of inboundImmigration facilities as poor.− In commentary to the surveys, border agencies again noted ongoing inadequaciesin the configuration of the immigration processing and surrounding areas, resultingin extended passenger queues during peak periods. Border agencies noted that,during the last summer period, Melbourne Airport asked them to cease theImmigration processing of passengers in the baggage retrieval area which wasovercrowded and considered a danger to both passengers and staff. Borderagencies commented that this added to congestion and queuing issues in theinbound Immigration area.− Border agencies also noted challenges in the installation of appropriate signageincluding delays in requests of the airport being fulfilled. However, recentdevelopments aimed at increasing the visibility and use of SmartGate arewelcomed and are hoped will help alleviate congestion.− In addition, border agencies suggested that lighting in the passport control area isgenerally poor and that the area has an inadequate number of public toilets.• Passengers’ rating of waiting time in the inbound Immigration area has remained in thegood range over the past five years.• The number of arriving passengers per inbound Immigration desk (during peak hour) washigher at around 29 in 2011-12 compared to around 25 in 2010-11. The overall highernumber of passenger arrivals during peak hour has been the driver of this increase as thenumber of inbound Immigration desks remained unchanged from the previous year at 44desks.− Melbourne Airport commented that the use of desks and facilities is theresponsibility of border agencies, not the airport, and that appropriate staffing ofimmigration facilities would help to manage increased passenger arrivals.015304