AUSTRALIA | The four largest airports in Australia have invested more than 43 percent into infrastructure during the 2024 - 2025 season.
Infrastructure investment at Australia’s four largest airports increased by more than 43 percent in 2024-25. Consumers could face higher airfares as airports seek to recover their costs by charging airlines more in the coming years, the ACCC’s latest Airport Monitoring Report showed.
Australia’s four largest airports, Brisbane, Melbourne, Perth and Sydney, collectively invested AUD 1.5 billion on aeronautical facilities in 2024-25, funding projects to expand capacity, upgrade terminals, and improve access, a 43.6 percent increase in investment compared to the previous financial year.
This marks a shift from the relatively low levels of investments in the period after the pandemic, and reflects major construction works now underway at all four airports.
The airports have collectively proposed spending almost AUD 20 billion in major infrastructure projects over the next decade.
Upcoming major projects include Perth Airport’s new terminal and runway development, Melbourne Airport’s third runway project, Sydney Airport’s proposed integration of its T2 and T3 domestic terminals, and a third terminal at Brisbane Airport.
“Ongoing investment is needed to ensure airports can continue to meet the needs of travellers and airlines, with Sydney, Melbourne, Brisbane and Perth airports collectively handling about 120 million passengers in 2024-25,” ACCC Commissioner Anna Brakey said.
“Large capital programs are likely to place upward pressure on airport charges paid by airlines, which may result in higher airfares for passengers as these costs are recouped,” she added.
“It is important that airport charges reflect sensible and timely investment decisions, efficient costs and a rate of return that matches the risks involved,” Brakey said.
Airport charges are not regulated and the ACCC has consistently raised concerns that the current monitoring framework is inadequate and an ineffective constraint on the behaviour of the major airports, who hold market power.
Implementing measures such as binding commercial arbitration to settle any disputes between airports and airlines, as well as improving the detail of financial data provided to the ACCC, would help to address the strong market power of major airports, and potentially limit the growth of charges that ultimately impact the price of airfares.
Given the time since the 2018-19 Productivity Commission inquiry, and both the scale of planned investment and growth in aeronautical profits at the major airports, we encourage the government to consider directing the Productivity Commission to commence a new inquiry into whether the regulatory settings for airports are appropriate.
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