The Sydney Airport Holdings Ltd (ASX: SYD) share price is in the red today amid the Australian Competition and Consumer Commission’s (ACCC’s) latest report into the airline industry.
The consumer watchdog’s report declares it’s the first time there are no flights to or from Sydney Airport in the top 10 most traversed Australian routes.
Additionally, it noted it will be keeping a close eye on anticompetitive behaviour by Australian airports and airlines coming out of COVID lockdowns.
At the time of writing, the Sydney Airport share price is $8.205, 0.18% lower than its previous close. That’s comparatively better than most of the broader market today.
Right now, the S&P/ASX 200 Index (ASX: XJO) and All Ordinaries Index (ASX: XAO) are down 1.08% and 1.06% respectively. Additionally, much of the travel sector is recording falls greater than those of the major indices.
Let’s take a look at the ACCC’s findings regarding Sydney Airport.
Sydney Airport in ACCC’s line of sight
The Sydney Airport share price is sliding today amid the release of the ACCC’s latest Airline Competition in Australia report.
The new report found that, for the first time, no flights to or from Sydney Airport made the top 10 busiest routes in Australia.
Instead, most of Australia’s busiest routes were those within Queensland. Flights between Brisbane and Cairns topped the list.
The ACCC’s chair Rod Sims commented on the shift in traffic, saying it’s “a sign of the state of the industry”.
Additionally, the watchdog, alongside the Australian government, is planning to crack down on anticompetitive behaviour by airlines.
The government recently released a report that proposes changes to airlines’ allotted take-off and landing slots at the airport. The ACCC supports the changes, saying they will increase competition at Sydney Airport.
The proposed changes include implementing a stronger system for monitoring compliance with slot-use rules. Particularly, the rule that an airline must use a slot 80% of the time.
Airlines might also face more scrutiny when cancelling flights. Continuously cancelling excessive numbers of flights could see them land in the Federal Court.
The Minister for Infrastructure, Transport and Regional Development has temporarily relaxed the slot-use rules, allowing airlines to use their allocated slots 50% of the time. That rule is relaxed further when COVID-related travel restrictions apply.
Finally, the ACCC has put a spotlight on Australian airports, warning them not to increase the prices they charge airlines in an attempt to recoup lost revenue, noting:
Should airports increase their aeronautical charges to recover their losses from COVID-19, this would be a clear example of airports systematically taking advantage of their market power. The ACCC is concerned that such increases in airport charges could damage both the vulnerable airline sector’s ability to recover.
Sydney Airport share price snapshot
A series of takeover offers has potentially saved the Sydney Airport share price from plummeting alongside its traffic volume in recent months.
Right now, the airport’s share price is 27% higher than it was at the start of 2021. It has also gained 37% since this time last year.