The ACCC’s latest Airport Monitoring Report found that the combined operating profits of Australia’s four largest airports were down 95 per cent in 2020-21 compared with 2018-19. Yet, despite this, Sydney, Brisbane and Perth airports still recorded operating profits. Victoria’s longer periods with COVID travel restrictions contributed to an operating loss for Melbourne Airport.
Australia’s competition watchdog also found that the number of domestic and international passengers using the four airports in 2020-21 fell to somewhere between 17 per cent and 40 per cent of their average pre-pandemic levels.
Little wonder that the turnover of retail chains operating out of the airports in 2020-21 fell to about five per cent of their pre-pandemic average. As a result, many retailers at the four airports had to close their operations.
Hire car operators at the four airports also told the ACCC that their revenues were between about 10 per cent and 50 per cent of pre-pandemic levels. Some had to close their booths at airports and sell parts of their fleets to generate enough cashflow to continue.
Airports hit back
Leasing premises to retail outlets, car rental businesses and other commercial tenants is a significant source of revenue for airports. According to a report from the International Finance Corporation, this accounted for about 40 percent of airports’ income in 2017.
In the early stages of the pandemic, all four monitored airports provided financial relief to some commercial operators by offering rent relief, rent deferral and waiving fixed payments. However, the ACCC reports that the level of relief varied, and some stopped offering this assistance in 2021 despite passenger numbers remaining low.
Sydney Airport CEO Geoff Culbert has called the report misleading and said the airport lost $1.3 billion in revenue while providing millions in relief to its domestic airline partners and commercial tenants.
“The report creates the impression that Sydney Airport profited during COVID, when the reality is we recorded significant losses, had to raise $2 billion from the market, $800 million in debt, and let go a quarter of our workforce just to survive,” he said. “We are proud of our behaviour through the pandemic and the principled way we supported our commercial partners, many of whom can attribute their survival to our actions.
“Everyone in aviation is emerging from some of the most devastating years in our history and our focus will remain on supporting our partners and working with them to rebuild the industry.”
