Rival chief executives Alan Joyce from Qantas and Paul Scurrah from Virgin Australia put on a united front to issue a withering attack on airports.
They argue airports like Sydney are ‘unregulated revenue stream in a monopoly environment’ and thus charge whatever they like.
Mr Joyce said in a speech to the National Press Club on Wednesday that airports had profit margins of more than 50 per cent – six times Qantas’.
‘If Qantas had the same sort of profit margin, we’d be making a $9 billion profit. Imagine the outcry,’ he said.
Rival chief executives Alan Joyce from Qantas and Paul Scurrah from Virgin Australia put on a united front to issue a withering attack on airports
He used the astronomical price of everything from parking to food as evidence of airports using their monopolies to their advantage.
‘It probably won’t come as a surprise to many, but airports are really, really, expensive places. It costs more to buy a coffee,’ he said.
‘It costs more to rent a car. It costs more to get a taxi. And, as you can imagine, it costs a lot more than it should to land an aircraft.
‘Australia is home to four of the five most profitable airports in the world. Funnily enough, they don’t rank nearly that highly when travellers rank the world’s best airports.’
The two airline bosses argued that the huge fees airports charge carriers, which rose by 25 per cent in a decade, led to higher fares for passengers.
Sydney Airport raked in $18.30 in revenue per passenger in 2017, much of it from fees levied on airlines.
Mr Joyce said Canberra Airport demanded $25 per passenger, which meant Jetstar couldn’t afford to fly there.
‘Airport charges are the fourth highest expenses for airlines, after fuel, aircraft and wages,’ he said.
‘As a percentage of revenue, Australian airlines are being slugged more than double what airlines in the U.S. pay and 50 per cent more than in Europe.
They argue airports like Sydney are ‘unregulated revenue stream in a monopoly environment’ and thus charge whatever they like
‘Australian airports are literally the only game in town. Their business model is based on it.
‘We can’t just up-stumps and fly to the next airport 15 minutes down the road. They have airlines and passengers over a barrel.’
Mr Scarrah agreed: ‘I argue Australia’s aviation system simply cannot afford golden runways that support profit margins north of 45 per cent.’
Mr Joyce also vented about the time Canberra Airport ‘ransomed’ a Qantas plane diverted there until $18,000 was paid over the phone by credit card.
‘[It was] the closest thing to piracy that I’ve ever come to,’ he said.
The airline bosses have the support of the ACCC, which wants more regulation on the monopolistic airports.
‘It is not surprising that the airports are so profitable, given that they face little competitive pressure and no price regulation,’ chairman Rod Sims said.
‘Unconstrained monopolies often have an incentive and ability to charge excessive prices while lacking strong incentives to improve services.
‘They are free to set their prices, and of course, they are monopolies.’