Sydney Concerns In Watchdog Report

Australia’s competition watchdog has raised concerns about the performance of the country’s busiest airport, Sydney (Kingsford Smith), ranking the hub at the bottom of its annual review of Australia’s top five airports.  The Australian Competition and Consumer Commission (ACCC) says the performance of Sydney is: “of greatest concern” and suggests that the airport has increased profits at the expense of service quality.
Sydney Airport, however, argues that the ACCC’s report is out of date – the report covers the 2008-09 financial year – and considerable development of the international terminal has already been achieved.  Furthermore, the airport says that existing quality of service monitoring conducted by the ACCC is: “marred by ambiguities, conflicts of interest and methodological weaknesses”.
Every year the ACCC monitors Adelaide, Brisbane, Melbourne (Tullamarine), Perth and Sydney airports due to concerns that they could use their monopoly position in aeronautical services to increase profits at the expense of airlines and passengers.  The ACCC looks at a range of indicators, including quality of service, prices, costs, profits and investment levels.  Quality of service indicators include the availability of check-in counters for airlines and surveys of passengers’ experience.  The ACCC notes that while these indicators do not provide conclusive evidence as to whether airports have been earning monopoly rents, trends in these indicators over time can identify airports which require closer scrutiny.
“The indications are that Sydney Airport has increased profits by permitting service quality to fall below that which the airlines reasonably expect,” says Graeme Samuel, ACCC chairman.
Brisbane airport was ranked as number one for the fifth consecutive year, followed by Adelaide, Perth, Melbourne and Sydney.  These positions have not changed for four years.  Brisbane was the only one to achieve an overall rating of “good”, says the report.
In addition to passenger surveys, airlines are surveyed on whether they are receiving a level of service they would expect.  The ACCC says Sydney is consistently identified as the least responsive of the airports with respect to service delivery and quality.
All of the airports, other than Sydney, reported increased passenger traffic compared with the previous year, as well as a slightly improved service quality, says the report.  Some 93.3 million passengers used the country’s five major airports in 2008-9 – up just over 1% from the previous year.
As previously mentioned, Sydney Airport says that the ACCC’s report is out of date as it covers the period July 2008 to June 2009.  Since then the A$500 million upgrade of the international terminal and precinct has progressed, it says. The project has already seen the opening of the expanded departures level which provides an extra 78,579 sq ft (7,300m2) of space; a new outbound hall for Australian Customs and Border Protection Service; a new security screening area; a new forum providing more waiting areas, food, beverage and retail outlets; and a new landside food court.
During the period covered by the report, extensive construction work was under way which, the airport argues, may have impacted the customer experience.
The new facilities provide a much improved experience for passengers, says the airport, pointing to its own customer survey conducted last December that found 84% of passengers rated the international terminal at seven or above out of ten – up from 67% in July/August 2008 when construction was at its peak.
The airport raises questions about the methodology used by the ACCC.  Sydney Airport wrote to the government last year as part of Australia’s aviation white paper process, calling for a new approach to quality of service monitoring.  It advocates a system modelled on that developed by the UK Department of Transport and based on passenger surveys used in the Airport Council International Airport Service Quality Programme.
The regulation of the monitored airports is due to be reviewed by the Australian Productivity Commission in 2012, but transport minister Anthony Albanese has called for this to be brought forward in light of concerns raised by the ACCC report.
(Emma Kelly)