ACCC slams Sydney Airport for falling service quality

The Australian Competition and Consumer Commission said its annual report monitoring the performance of the country's largest airports produced evidence that Sydney "has increased profits by permitting service quality to fall below that which the airlines reasonably expect."

ACCC gathers data on SYD, Adelaide, Brisbane, Melbourne Tullamarine and Perth "due to concerns that they might use their monopoly position. . .to increase profits at the expense of airlines and passengers."

It said airlines and passengers rated SYD lowest in the fiscal year ended June 30, 2009, the fourth consecutive time it finished at the bottom. "It appears that investment in the International Terminal has been slow," ACCC said, adding that SYD revenue and profit margins increased even though it was the only airport in the group to report declining passenger numbers (down 1.4% to 32.7 million). Its average price of A$13.63 ($12.52) per passenger was the highest of the group. MEL's $7.96 was lowest.

The five airports processed 93.3 million passengers in 2008-09, an increase of just over 1%. Highest growth was at Perth at 6% to 9.7 million. SYD's aeronautical revenue rose 5.4% to A$446 million, the third-largest increase of the five airports. Brisbane's soared 15.5% to A$164 million and aeronautical revenue per passenger was up 5.1% to A$13.63. Average price at the other four airports was $9.12.

ACCC develops an overall ranking of the five based on service quality, measuring check-in counter availability, security wait times and passenger surveys. While SYD finished at the bottom again, Brisbane has topped the rankings for five straight years, with Adelaide finishing second in each of the past four.

ACCC said airlines consistently call SYD "the least responsive of the airports with respect to service delivery and quality" and criticized it for delaying improvements to the International Terminal. Investment representing 14% of assets in 2008-09 was the highest at SYD in nine years. "There are initial indications that Sydney Airport has enjoyed the persistent increased profits by allowing its quality of service to fall at the expense of airlines and passengers," it concluded.

In response, SYD criticized the report as "out of date." It said its A$500 million upgrade of the terminal has progressed, with an extra 7,300 sq. m. of space on the departures level, a new outbound customs hall, a new screening area, more retail and food options after customs and other improvements. It added that construction, which began in October 2007, "may have. . .impacted on the customer experience." It said a December 2009 survey found that 84% of passengers rated the International Terminal at least a 7 on a 10-point scale, up from 67% during heavy construction in the summer of 2008.