BAA suitors face Australian inquiry into airport prices

Australia's Productivity Commission has begun an investigation into airport owners' prices, which is expected to last nine months, after criticism that airport owners have exploited their monopoly powers.

Ferrovial has a 21 per cent shareholding in Sydney airport which it has agreed to sell to Macquarie if their consortium succeeds in acquiring a controlling interest in BAA. Macquarie already owns a stake of more than 50 per cent in the airport.

The owners of Sydney airport enraged customers this week by axing the pick-up zone outside the domestic arrival terminal for people waiting longer than two minutes. Drivers needing to wait more than two minutes are now forced to pay a minimum of A$7 (£3) to park.

Axing the drop-off fee is just the latest irritant for Sydney commuters, who are reportedly paying an average of A$33 before they even board a flight. One of the city's newspapers asked in a seething editorial this week: "What will they think of next - a toilet-paper tax?"

Australia's Treasurer Peter Costello and the Transport Minister Warren Truss have said the public inquiry will look at future regulatory systems for Australian airports. Price caps were dumped at the country's main airports, including Sydney, in 2002 but there have been complaints that owners have ramped up prices far higher than they have needed to in order to cover the costs of running airports, which in most cases enjoy a monopoly position in their locality.

Warren Bennett, the executive director of the Board of the Airline Representatives of Australia, which represents foreign airlines in the country, said: "Sydney Airport Corporation seems to want to get a greater-than-reasonable return on investments in assets, more so than the other operators do."

He complained of other problems at the airport related to the quality of services, such as the cleaning of the site, which he claims does not reach satisfactory standards.

The chief executive of Macquarie Airports, Kerri Mather, said the group's approach is not to increase passenger fees but to try to improve passengers' experiences when they pass through the airport. She said that under her group's ownership, the number of passengers using the facility has grown from 23 million to 28 million.