"Australian airports are taking off under privatisation"

Wedmesday, September 13, 2006

Airports are taking off under privatisation
Australia - The Melbourne Age


THE Tourism & Transport Forum has delivered a big tick to airport
privatisation, releasing a report saying private airports have made big
efficiency gains and that they are lifting revenue through new business.

However, the report by the forum - which is made up of representatives from
across the travel industry - attributes at least some of the improved
financial outcome to higher aeronautical charges. These have been a point of
conflict between some airports and the airlines that use them.

The report, launched by Sydney Airport chairman Max Moore-Wilton, found that
efficiency in terms of revenue per unit of traffic carried had jumped nearly
25 per cent on average since the four major airports Sydney, Melbourne,
Brisbane and Perth were privatised.

The revenue efficiency gains have come from diversification into new revenue
sources such as property development and the charging of market rents on
property assets.

Airport yields have jumped, with earnings before tax and depreciation
amounting to 48.2 per cent of revenue after privatisation compared with 46.1
per cent beforehand.

Passenger numbers have also increased. For the five years before
privatisation, the average annual passenger growth for the four airports was
4.5 per cent domestically and 5.3 per cent for international passengers.

Since passing into private hands, the domestic passenger growth rate is up
to 5.3 per cent and the international rate is up to 6.9 per cent. Total
average passenger numbers were 11.5 million before privatisation and 12.9
million since.

Investment levels have actually fallen. In the five years before the
airports were sold, $1.84 billion was spent on capital investment compared
with $1.14 billion since.

However, Melbourne Airport spokesman Geoffrey Conaghan said governments had
invested to get airports upgraded before privatisation, and Melbourne
Airport had actually spent more since it went into private hands.

Qantas executive Grant Fenn said airports were more efficient following
privatisation, but there was concern that airports had an unfettered ability
to raise charges and apply non-commercial operating terms and conditions.

 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************