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Infrastructure investment at Australia’s four largest airports increased by more than 43 per cent in 2024-25, however consumers could face higher airfares as airports seek to recover their costs by charging airlines more in the coming years, the ����ԭ��’s latest Airport Monitoring Report shows.

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Airport monitoring report 2024-25 key results

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Australia’s four largest airports, Brisbane, Melbourne, Perth and Sydney, collectively invested $1.5 billion on aeronautical facilities in 2024-25 - funding projects to expand capacity, upgrade terminals, and improve access, a 43.6 per cent 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 $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,” ����ԭ�� 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,”

“It is important that airport charges reflect sensible and timely investment decisions, efficient costs and a rate of return that matches the risks involved,” Ms Brakey said.

Airport charges are not regulated and the ����ԭ�� 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 ����ԭ��, 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.

Sydney Airport most profitable, Perth records standout growth

Each of the four airports reported record revenues for aeronautical operations, collectively earning $2.9 billion in 2024-25.

This record revenue came despite a slowing of passenger growth to an increase of 4.6 per cent in 2024-25, compared to 13.7 per cent growth in 2023-24.

Sydney Airport generated $584.3 million in aeronautical operating profit in 2024-25 and recorded the highest return on aeronautical assets at 20.8 per cent, the highest level observed in over two decades of monitoring by the ����ԭ��.

“Sydney Airport continues to earn significantly more aeronautical revenue and profit than the other major airports, both from a total and per‑passenger perspective,” Ms Brakey said.

“Sydney Airport’s aeronautical profits eclipsed all of the other airports combined, more than double Melbourne as the next most profitable.”

Sydney Airport’s higher earnings compared to the other airports is due in part to a greater share of international passengers, who typically generate higher revenue than domestic passengers.

It also reflects that Sydney Airport handles the most passengers in Australia.

Perth Airport delivered the strongest year‑on‑year improvement in profitability, with aeronautical profit increasing by 73.7 per cent to 130.6 million in 2024-25.

Passenger growth continues, but at a slower pace

Combined passenger numbers at the four airports grew by 4.6 per cent in 2024-25. The increase was largely driven by sustained international passenger growth, which increased by 9.5 per cent to 40.4 million passengers.

Perth Airport recorded the strongest international growth, with passenger numbers up 17.8 per cent, followed by Brisbane Airport (16.3 per cent), Melbourne Airport (8.3 per cent) and Sydney Airport (5.5 per cent).

“While international passenger growth slowed from 2023-24 to 2024-25, the continued strong passenger growth reflects the willingness of international airlines to add services to Australia’s major airports,” Ms Brakey said.

“Domestic passenger numbers grew by 2.2 per cent to nearly 80 million - highlighting a sustained demand for leisure travel and tourism within Australia.”

Passengers generally satisfied with services

Sydney, Melbourne and Perth airports were rated ‘good’ for the average overall quality of their services and facilities in 2024-25.

While rated the highest of the four airports by passengers, Brisbane Airport’s overall rating fell to ‘satisfactory’ following lower ratings from airlines.

Airlines noted the impacts of major construction works at Brisbane Airport and gave low ratings for the availability and standard of aerobridges, check-in services and facilities, and baggage processing facilities.

Car parking continues to be a profitable business

Airports continued to earn substantial profits from car parking, with the four airports collectively earning $402.1 million in operating profits in 2023-24.

Brisbane Airport’s car parking profit remained the largest, increasing by 7.9 per cent to $125.3 million, while Sydney Airport reported an increase of 11.1 per cent to $108.7 million.

Profits fell by around eight per cent at both Melbourne and Perth airports, to $101.3 million and $66.7 million respectively.

Sydney Airport generally had some of the most expensive rates for parking, while Melbourne Airport was generally the cheapest for both at-terminal and at-distance parking.

“Car parking continues to be a lucrative business with operating profit margins above 60 per cent at Brisbane, Perth and Sydney airports,” Ms Brakey said.

“To save money, motorists are encouraged to book online in advance, or consider off‑airport parking providers as they can be substantially cheaper for extended stays,”

“Dedicated free waiting zones can also be a convenient option for collecting travellers.” Ms Brakey said.

Background

The ����ԭ��’s airport monitoring role is established under the Airports Act 1996 and Airports Regulations 2024, as well as two directions from the Australian Government to monitor the prices, costs and profits of aeronautical and car parking services at Australia’s four largest airports (Brisbane, Melbourne, Perth and Sydney).

The four airports are assessed for quality of service using airline and passenger surveys, as well as objective measures. The possible ratings for airport quality of services are ‘very poor’, ‘poor’, ‘satisfactory’, ‘good’ or ‘excellent’.

The ����ԭ�� measures operating profit by earnings before interest, taxes and amortisation (EBITA). Operating profit margin is EBITA as a percentage of revenue.

Aeronautical operations are those that directly relate to providing aviation services, including runways, aprons, aerobridges, departure lounges and baggage handling equipment.

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