Airports have collectively proposed to spend $20 billion on major infrastructure projects over the next decade, the Australian Competition and Consumer Commission said in its latest airport monitoring report on Thursday.
That would likely result in higher charges for airlines and ultimately higher ticket costs for passengers, ACCC commissioner Anna Brakey said.
While ongoing investment to increase airport capacity is needed, "large capital programs are likely to place upward pressure on airport charges paid by airlines, which may result in higher airfares for passengers as these costs are recouped", she said.
"It is important that airport charges reflect sensible and timely investment decisions, efficient costs and a rate of return that matches the risks involved."
Airports derive a substantial portion of revenue from charging airlines to land on their runways and use their terminals.
But these charges are unregulated and the watchdog says that the current monitoring framework is ineffective at constraining "the behaviour of the major airports, who hold market power".
Airlines have been outspoken in their criticism of the rapid rise in airport charges.
Virgin Australia chief financial officer Race Strauss told an investor call in February that airport charges increased 14 per cent in the year to December 2025, compared to 3.8 per cent headline inflation.
Echoing concerns raised by Qantas boss Vanessa Hudson, Virgin chief executive Dave Emerson said air travel could become unaffordable for Australians if the industry was not vigilant.
Addressing the market power of major airports would limit growth in airport charges and ultimately airfares, the ACCC said.
It called on the federal government to hold a new Productivity Commission inquiry into whether the regulatory settings for airports are appropriate.
Labor has committed to beefing up the airport monitoring regime as part of its response to the Aviation White Paper, with a second Sydney airport in the city's west set to increase competition.
The Australian Airports Association said infrastructure investment was necessary to meet growth in passenger numbers, which has strained terminal capacity, processing systems, security screening and baggage facilities.
Upcoming projects include Sydney Airport's $200 million domestic terminal transformation, intended to get 95 per cent of passengers from kerb to gate in under 15 minutes, and a third runway at Melbourne Tullamarine.
Meanwhile, Brisbane Airport is spending $5 billion to upgrade its domestic terminal, including a direct connection to parking and pick-up areas.
Brisbane's parking profits were the highest in the country, increasing 7.9 per cent to $125.3 million in 2023/24.Â
Collectively, the four-largest airports earned $402.1 million in operating profits from parking, with Sydney raking in $108.7 million - an 11.1 per cent increase from the prior financial year.
"Car parking continues to be a lucrative business with operating profit margins above 60 per cent at Brisbane, Perth and Sydney airports," Ms Brakey said.
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