Australia’s peak airport body has revealed that six in ten airports across the country are operating in the red.
At a recent parliamentary inquiry hearing, Simon Westaway, CEO of the Australian Airports Association (AAA), stated that most airports were struggling to deal with the complexities of the aviation sector.
“Around 200 of our airports across the country are owned, managed, and run by local government, [and] local councils,” he told the Parliamentary Joint Committee on Intelligence and Security.
“At least 60 percent of those run at a loss, and many of those run at a significant loss.”
The CEO said those airports operated at a different business model compared to major airports in capital cities such as Sydney, Melbourne, Brisbane, and Perth.
“They [major airports] are dealing with passenger throughputs 10, 15, 20, probably 50 times the type of flows that you would [see in regional ones],” he said.
“In 2023-24, our major airports had over 97 million passenger throughputs, while our regional rural airports had a little over 18 million in throughput.”
Propose Bill to Cost Airports Over $1 Billion: AAA
In November 2024, the Labor government introduced the Transport Security Amendment (Security of Australia’s Transport Sector) Bill 2024 to boost the security of the transport industry, particularly aviation and maritime transport.The bill aims to improve many aspects of the transport system, including strengthening and modernising security protocols, providing stronger tools to manage and mitigate security risks, granting more power to law enforcement and security agencies, and enhancing existing regulations.
However, Westaway raised concerns that the bill would lead to regulation duplication in some areas, such as the hazard security framework, which would increase compliance costs for airports.
“Compliance costs are a major concern for us. By the CISC’s [Cyber and Infrastructure Security Centre] own estimates, implementation costs could cost our sector nearly $1 billion (US$631 million) over the next decade,” he said.
“This is an additional expense for airports across Australia, particularly for our small regional airports, who will find it very difficult to absorb these costs.”
The CEO added that the extra costs would eventually be passed on to passengers, further disproportionately increasing travel expenses and impacting regional and rural aviation.
“While security is paramount, pushing legislation without due consideration is problematic, and we believe [it] is actually bad public policy,” he said.
Home Affairs Department Questioned Over Cost Burden
A member of the committee questioned whether the Home Affairs Department had considered the cost impact of the new legislation.“Has the department considered whether the regulatory impost could be pushed on to consumers, and what does your modelling suggest the additional cost to consumers will be?” he asked.
In response, Jennifer Ellison, a director at the aviation security policy branch of the Department, said the issue of passing costs to consumers was a matter for airports and airlines.
Regarding cost modelling, Ellison said the Department had asked the industry to provide input to help it determine the costs.
“We only received four submissions from both maritime and aviation sectors that would assist us in analysing the costings,” she said.
“One was from a regional airport, and they advised that, due to the smaller nature of their airport, and the resources that they employ, it might cost 7.5 percent of what a designated airport might cost in some instances.”
However, the director noted that the Department was unable to form a comprehensive view of the costing based on the four submissions, and had to use other methods.
“We used costings from the SOCI [Security of Critical Infrastructure] Act, and from that, we developed costings based on the industry’s compliance with the regulations,” she said.
Sally Pfeiffer, first assistant secretary at the Department, said while there were concerns about regulation duplication, not all airports would be affected.
“There are currently a number of airports and airlines who sit within SOCI [Act]. Not all airports sit within are regulated or fall under the SOCI Act. Same with maritime ports,” she said.
