By
any measurement, the Macquarie Bank-controlled Sydney Airports
is a monopoly, and the 2005 financial results confirm its pricing power and ability
to generate excessive profits.

Revenues
rose 12.9% in the year to $619.21 million, but earnings were up 14.0% to
$495.24 million, or a gross profit margin of 80%, compared with a still massive
77% last year. They are monopoly profits.

Operating
expenses only rose 8.7% in the year, much less than the jump in revenues.

This profit margin, which is far better than the much maligned
Telstra, has been achieved with the approval of the ACCC and the
federal government. No wonder Macquarie
paid a greedy Howard Government a massive $6.8 billion for Sydney. With
earnings like
this it will soon be worth closer to $10 billion.

The
higher revenues were earned on a 7.1% growth in passenger traffic, another sign
of the immense pricing power now in the hands of
Macquarie Bank.

Sydney
Airport boss Max Moore Wilton
has been very vocal on airport security and costs, so how does he explain a 20%
jump in “aeronautical security recovery” revenues to $37.77 million in the year
to June?

That’s
almost three times the 7.1% growth in passenger traffic. More price gouging?
And he wants the taxpayers of Australia
and NSW to meet some of the airport’s security costs as well!

Peter Fray

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