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Has Sydney Airport Parking Reached a Peak?
In August, Sydney Airport released figures indicating its lowest growth in parking fee revenues in at least five years.
In the first half of 2017, revenue from Sydney Airport parking grew to about $77 million (which was 2.2 percent growth). This is down from 4.4 per cent growth in the same period for 2016. It also represents only a minute portion of the revenue enjoyed in previous years.
According to Kerrie Mather, the Airport’s chief executive, this was due to public transport. People are catching trains to the airport. Although domestic airline passengers only grew by 2 per cent in June, train passengers increased by 14 per cent.
As we can observe in the below graph produced by the Sydney Morning Herald, Sydney Airport parking revenue is “growing but it’s slowing”:
Compare this occurrence to the construction of Western Sydney Airport. So far as we know, the NSW Transport Minister has signaled his preference for a metro-style train rather than a traditional train connection to Badgerys Creek. This may be in the form of a rail link from Parramatta to Badgerys Creek. It will be interesting to see how this will affect the new airport’s parking revenue. We expect revenue will still form a significant portion of its profits given the general traveler’s tendency to drive to the airport.
Despite Sydney Airport’s slow growth in parking revenue, the Australian Competition and Consumer Commission (ACCC) still see it as significant. From 2015 to 2016, the Airport made just under $100 million in profit from parking. Altogether, it amounts to about 73 per cent of the facility’s revenue, and is significantly higher than the parking revenue in Australia’s other major airports. The ACCC commented that there needs to be more regulation to enhance competition. Consumers are faced with little to no choice but to pay the fees, so there is small incentive to reduce them. “They’ve got market power and there’s not much we can do about it,” said Rod Sims, ACCC chairman.
It is indeed difficult to see how Sydney Airport could foster competition in its own parking facilities. The Federal Government has left the corporation’s control over its parking mainly to its own devices. It could undergo a sale of its parking facilities to other companies. Though this is extremely unlikely given the amount of profit it generates from them.
The NSW Government has promoted the use of public transport to the airport which is a positive step, but there is not much they are able to do to address the competition between parking companies. The State could construct its own parking facility nearby in order to promote some competition in the market. There are reportedly some other third party carparks nearby, though some involve booking 24 hours in advance. Furthermore, in 2013, spaces at the airport’s Park & Fly Car Park went on sale for $57,500 a spot under a ‘strata shares’ scheme.
Sydney Airport parking is a common complaint. Nevertheless statistics do indicate that growth in revenue from leaving a car there is falling slowly. Ms Mathers also stated she would continue to promote the use of public transport to the airport despite this.