Passenger mode share for access to Brisbane and Melbourne airports (ACCC)

The ACCC has fingered Melbourne Airport for its monopolistic approach to parking. In its latest Airport Monitoring report, it accuses the operator of imposing excessive levies on private buses and limiting the service offering of off-airport parking establishments:

Excessive access levies could have the effect of shifting demand to on-airport parking and, consequently, allow the airport to increase car parking prices. These factors point to Melbourne Airport earning monopoly profits from its car parking operations.

The comments section of The Age’s story about the report is bubbling over with calls from outraged punters calling for a rail line to be built from the CBD in order to bust the monopoly power of the airport operator, Australia Pacific Airports Corporation.

Irrespective of the overall merits of building an airport rail link, I can’t see that it would have any more than a marginal impact on the airport’s parking policies. It might (or might not) be justified on other grounds, but a train is not really a substitute for parking.

Travellers who park at the airport are by definition residents of Melbourne and have access to a car. A rail line from the CBD is not going to be attractive when most trips made by residents – including business trips – either originate or terminate at home (or both). When you’re catching a 7:00 am flight you don’t usually catch the train into the office first. Likewise if your flight gets you back into town at 7:00 pm or later, most travellers go straight home.

Rail is not going to be an attractive alternative for the great bulk of the 99% of residents who live outside the CBD or the 92% who live outside the inner city. Rather than walk to their local station, take a train and then change onto the airport line, they’ll drive.

In many cases their employer (or the taxpayer!) is in any event paying for their airport parking.

Brisbane is an instructive case because like Tullamarine it’s a considerable distance from the city centre (see chart). According to the ACCC, the Airtrain captures just 5% of all trips generated by Brisbane airport (both travellers and staff) even though it’s easily accessible from the main terminal and stops at a number of stations before and after the CBD. That’s considerably less than the ACCC’s estimate of 14% mode share for buses at Melbourne Airport.

Market power means airport parking costs more than it should at Melbourne Airport, but prices aren’t so high that they deter residents from driving. My family and I parked in the uncovered long term car park at Melbourne Airport from 23 to 30 December for $89 (see fee calculator). A return cab fare from our place costs $100-$120.

The cost of parking for a day (6am to 9pm) is $29 in the long term car park. That’s not much more than the $26 return fare from the CBD on Skybus. You can pay $50 if you want to be within 2-3 minutes of the terminals.

The way to tackle monopolistic pricing at the airport isn’t to spend billions constructing a rail line. I don’t think it matters all that much whether the airport is a privately or publicly owned monopolist, either. Monopolists need to be regulated. The ACCC should stop the ‘jawboning’ (it said much the same thing about monopolistic practises last year) and start doing what it’s supposed to do – in the first instance, it should take action to remove the anti-competitive aspects of the levies and restrictive practises that prevent other parking operators from competing effectively.

And the State government should have a close look at why taxis cost so much – the maximum permitted cab fare from Manhattan to the airport when I was there last year was $50.

P.S. note that for some reason the ACCC did not use the same colours in the legend for both charts