Jim Eagles: Parking fees take off again

COMMENT

If you've parked your car at Auckland International Airport lately you'll have discovered that parking charges have just gone up. Again.

The full-day charge for parking in the open air - which happens to be the one I have to pay when I attend a meeting in Wellington every six weeks - has gone from $20 to $22.

That's a 10 per cent increase at a time when inflation has just crept up to 2.4 per cent.

My impression is that this is part of a definite pattern. I seem to recall that in the past three years the full-day charge has gone from $16 to $18, to $20 and now to $22. If so, that would be way, way, way above the rate of inflation.

Unfortunately I can't confirm that impression because AIA has declined to provide any historical information about parking charges. Chief executive Don Huse believes that for some figures to be highlighted in isolation would be misleading.

He may well be right. The full-day charge is only one figure in a complex schedule. But it is a fairly significant charge which a lot of people have to pay. And in the absence of any other information, I can only assume that the increases I've noticed are fairly indicative of what is happening overall.

Doubtless it would be equally misleading to highlight the fact that the airport company's latest annual result shows that in the past year income from parking has risen 23.5 per cent.

That figure is, as Huse points out, boosted by the fact that more people are using the airport - though that increase is a more modest 14 per cent - and because of the increased security procedures they are having to stay longer.

But it's still pretty good revenue growth and might even lead a cynic to suggest that the airport company is making full use of the monopoly position it holds.

Huse naturally rejects any such suggestion, arguing that airport parking is, in the economic jargon of the age, a contestable market.

Taking your car to the airport and parking it there is just one option which has to compete against taxis, shuttlebuses, airport buses, valet parking or getting your relatives to drop and collect you.

If the airport puts its charges up too high, he says, people will switch to other forms of transport and the company will lose revenue.

No doubt he knows what he's talking about. Though, in my case, I can really only get to the airport for the flights I have to catch by taxi (at over $100 a round trip) or by car, so I have little option but to drive there and pay whatever they decide to charge for parking.

So, how does the airport decide what to charge? Basically, Huse says, by doing a benchmarking exercise every year comparing Auckland airport's parking charges with those at other airports and at fringe city areas or at the hospital.

A quick check reveals that the cost of parking for a day at other airports is $20 at Wellington, $16 at Christchurch, $8 at Hamilton and $6 at Queenstown.

Auckland City's open-air car parks at places like Parnell and Beach Rd cost from $5 to $9 a day - though its city centre parking buildings are $27 a day - and the Auckland Hospital car park is $17 for eight hours.

Compared with those charges, paying $22 sounds, well, a little on the high side. It's certainly a bit hard to see the justification for a 10 per cent rise.

What makes the latest increase particularly hard to swallow is the knowledge that Auckland International Airport is one of the country's most successful listed companies and has just announced a 13 per cent increase in profit.

Don't get me wrong. I understand the airport company is there to make money - in fact I believe I indirectly own some of their shares - and that it also has to make a profit to generate the money to invest in things like its new parking building.

But I also understand that any company which enjoys a monopoly in a major part of its business and a significant advantage in the rest, and is making record profits but continues to crank up its charges by significantly more than the rate of inflation, year after year, is not being kind to its customers.

In the air, where there is tough competition, fares have come down. I can't help wishing we had a choice about where to fly from because then parking charges might become equally competitive.