Sydney Airport rated worst in Australia

Is Sydney Airport investing enough to improve services? It appears not

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Sydney’s Kingsford Smith Airport – which is owned by Sydney Airport Holdings Ltd (ASX: SYD) – has been rated the lowest out of Australia’s four-largest airports.

The Australian Competition and Consumer Commission (ACCC), in its annual report on the state of our airports, has ranked Sydney the worst for overall quality of service, although rated as ‘satisfactory’.

“The 2012-13 report shows that all monitored airports continued to be profitable, however, for the second year in a row, only one airport achieved a quality of service rating higher than ‘satisfactory’ while there were continued signs of congestion,” ACCC Chairman Rod Sims said.

Passenger ratings of Sydney were unchanged at ‘satisfactory’, but airlines were ranked lower at ‘poor’. Melbourne’s Tullamarine was rated ‘good’ by passengers, while airlines fell from satisfactory to poor.

Brisbane was the only airport to increase its quality of service, while Perth maintained its satisfactory rating.

The ACCC says that over the past decade, all four airports have reported significant earnings growth, while at the same time the quality of air services has fallen at three of the four airports.

Airlines such as Qantas Airways Limited (ASX: QAN), Virgin Australia Holdings Ltd (ASX: VAH), Regional Express Holdings Ltd (ASX: REX) and Alliance Aviation Services Ltd (ASX: AQZ) rated Sydney airport ‘very poor’ for the availability of aircraft parking bays.

Mr Sims says Sydney’s ratings and overall level of service suggest that much needed investment has not been forthcoming. Melbourne and Perth airports consistently outspend Sydney as a portion of aeronautical assets. He also suggests that all four airports will need to invest more if they are to resolve congestion, allow future passenger growth and improve service levels.

Foolish takeaway

The news is likely to add to the pressure to build the second airport in Sydney sooner rather than later, to ease flight and land-side congestion. While Sydney Airport has the option of first rights over the second airport, the company doesn’t appear too keen on that idea at all, repeatedly reporting that it can accommodate future growth at Sydney’s Kingsford Smith for many years to come.

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Motley Fool writer/analyst Mike King owns shares in Sydney Airport. You can follow Mike on Twitter @TMFKinga

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