The power of monopoly rights was recently exposed with the growth in parking revenue at Melbourne Airport. Australian Pacific Airports Corporation is the owner of Melbourne Airport, a group controlled by a number of Australian infrastructure funds. It was reported in this Herald Sun article that Australian Pacific Airports Corporation derives 18.3% revenue from parking, versus only 8.3% by the Macquarie Infrastructure owned Sydney Airport.
Passengers at Australia’s 5 airports have grown by 41% since 2002, but parking revenue has grown by 77%. Short stays cost $10 versus $4 in Adelaide.
Monopoly rents are extorted by the lack of alternatives patrons of the airport face. A Prosper Australia member was both embarrassed and outraged when a plane was late for arrival, sending the parking fee from $10 to $20. Such an exorbitant price gouge emptied his pockets and left him a little embarrassed with the ‘just met’ father-in-law unimpressed at the unexpected scrounging for coin.
Such monopoly power is the obvious danger we have been warning about since the 1997 privatisation of airports. They should be publicly owned so that prices are moderated and any economic benefit is harnessed for the common good.
For example, the prices charged for airline landing rights has jumped. These licensing price hikes are another example of monopoly rents. The profit motive runs counter to the public interest when such power is possible. A resource rental system helps counter this.
