Ground transport to Australia's airports is and will remain heavily car based. With the exception of Sydney Airport, where the train carries about twenty percent of passengers, public transport mode share to Australian airports is in the low single digits. And unfortunately, we don't see this changing much in the next ten to twenty years. This puts more pressure on the roads to, on, and around Australian airports and Australian car parking infrastructure than most airports around the world, particularly in Europe and Asia. This in turn requires investments in roads, in car parks, and in pick up and drop off hails.
Prior to COVID, there were many predicting the demise of airport car parking. Mode share had been falling for many years, but COVID seemed to reset passenger behaviors with many Australians getting back into their own cars, rediscovering car parking, and that habit seems to have formed at least for now. While our view is that airport car parking mode share will continue to decline, the faster growth of air travel means that absolute growth for car parking will continue to grow, and that Australia's airports will have to continue to build more car parks. But this can be done more efficiently in the future with more capacity created at the same amount of space through operational and some infrastructure changes, such as stacking, tactical use of valet services, and technology that helps manage through the peaks.
But the majority of passengers will continue to be picked up or dropped off in the future by a friend, relative, taxi, or ride share. This creates congestion on airport roads, particularly at the terminal curbside.
Airports fundamentally have two options in response to this, to build expensive road infrastructure leading up to the terminals and expanding those roads and the terminal drop off areas, or to move some of the drop off elsewhere. Our view is that ground access pricing, which already exists on commercial operators such as taxis, ride share, and shuttle buses, will come to Australian airports in order to help manage congestion and delay or avoid far more expensive capital investments and roads. Perth airport was the first to introduce a form of congestion pricing in Australia, and we don't think it'll be the last.
The reality is that airports must make efficient use of their space and capital. If they don't, it will result in poor customer experience, more congestion, lower shareholder returns, or a combination of all of them. Given that any major infrastructure asset, a road, car park, is a long lived asset, It'll be there for thirty or fifty years. We believe the next two to five years will be a critical time for most airports in making infrastructure design decisions, operational decisions, and commercial decisions around pricing.
Airports that make better decisions in the design of their assets and asset pricing will have better commercial, customer, and operational results for years to come.
