Airfares set to climb thanks to major upgrades at Australia’s four biggest airports, warns ACCC

Travellers will end up footing the bill for the $20 billion upgrades slated for Australia’s four biggest airports — including Perth — as airlines are hit with higher charges for the improvements, the consumer watchdog says. Perth Airport spent $126.3 million to upgrade aeronautical facilities like runways and terminals in the 2025 financial year, helping a 43.6 per cent lift in combined investment by the four major airports to $1.5b. According to the Australian Competition and Consumer Commission’s latest airport monitoring report on Thursday, Perth, Brisbane, Melbourne and Sydney airports plan to spend a total of $20b on new infrastructure projects over the next decade. The investment comes as airports continue to earn substantial profits from carparks, with the four majors collectively raking in more than $400m in 2025. While Perth recorded a 7.8 per cent fall, it still collected nearly $67m in carpark profit, with the airport gaining 61.4¢ on every dollar charged for parking. The ACCC said Perth Airport’s substantial decrease in carpark operating profit was driven by a significant increase in costs. Brisbane carparks were the most lucrative, collecting $125.3m in profit by slugging passengers a $25 fee to park between 30 and 60 minutes — the most expensive in the country. It also reported the highest car parking operating profit margin, gaining nearly 77¢ for every dollar charged for parking, ahead of Sydney (66.3¢) and Melbourne (59.5¢). The four airports are now gearing up for major projects, including Perth’s redevelopment that includes another runway set to cost more than $1b, its first hotel, a new Qantas terminal and multi-storey carparks. It also includes Melbourne’s third runway project, Sydney’s proposed integration of its T2 and T3 domestic terminals, as well as a third terminal at Brisbane Airport. “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,” ACCC commissioner Anna Brakey said. “It is important that airport charges reflect sensible and timely investment decisions, efficient costs and a rate of return that matches the risks involved.” Qantas and Virgin Australia have recently voiced concerns about the sharply increased costs for airport usage, airplane maintenance, new aircraft and technology, threatening affordable travel. Perth Airport recorded a near-74 per cent jump in operating profit to $130.6m in 2025, driven by an 8.4 per cent increase in total passenger numbers. The Australian Airports Association said a surge in international passenger growth last financial year delivered strong results for the four airports, enabling further investment in upgrades as demand continues to test capacity. AAA chief executive Simon Westaway said airports were responding with sustained private investment to support long-term connectivity and ensure infrastructure kept pace with future demand. “Airport charges are typically set through long-term commercial agreements and do not fluctuate with demand in the way airline ticket prices can. They represent only a small proportion of the total airfare,” he said. “These charges help fund the critical infrastructure that passengers rely on every day.” Airport charges are not regulated and the ACCC has consistently raised concerns the current monitoring framework is inadequate and an ineffective constraint on the behaviour of the major airports, who hold market power. But Mr Westaway pointed to four consecutive Productivity Commission inquiries that found the current regulatory framework remained appropriate and that airports have not systematically exercised their market power.