AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
CONTENTS ii
ABOUT THE AUSTRALIAN AIRPORTS ASSOCIATION
2
EXECUTIVE SUMMARY & INTRODUCTION
3
EXECUTIVE SUMMARY – KEY MESSAGES
4
INTRODUCTION
6
THE FACTS
9
AUSTRALIA’S AIRPORTS
10
AVIATION ACTIVITY AT AUSTRALIA’S REGIONAL AIRPORTS.
28
OTHER ACTIVITIES AT REGIONAL AIRPORTS
30
RUNNING A REGIONAL AIRPORT
31
REGULATION OF AUSTRALIAN AIRPORTS
33
TRAFFIC AT REGIONAL AIRPORTS
40
THE WIDER ECONOMIC GAINS GENERATED BY AIRPORTS
48
THE MYTHS
51
MYTHS ABOUT AUSTRALIAN AIRPORTS
52
AIRPORTS ARE POWERFUL MONOPOLIES
52
AIRPORTS ARE A LICENCE TO PRINT MONEY
52
AIRPORT OPERATORS CONTROL EVERYTHING THAT HAPPENS AT THEIR AIRPORT, ESPECIALLY NOISE
53
AIRPORTS ARE PASSIVE ASSETS THAT RUN THEMSELVES
54
RUNNING AN AIRPORT IS JUST LIKE RUNNING A CAMPING GROUND
54
AIRPORTS RENTS SHOULD NOT BE SET AT MARKET RATES FOR AIRPORT TENANTS
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
PUBLISHED NOVEMBER 2012
THE CHALLENGES
55
CHALLENGES FOR AUSTRALIA’S REGIONAL AIRPORTS
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FINANCIAL CAPACITY TO MAINTAIN REGIONAL AIRPORT INFRASTRUCTURE
56
MAINTAINING RPT SERVICES TO REGIONAL AIRPORTS
57
SKILLING THE REGIONAL AIRPORT
57
ENHANCING REGIONAL AIRPORT INFRASTRUCTURE TO MEET INCREASING DEMAND
58
THE RISK OF “STRANDED” ASSETS AT REGIONAL AIRPORTS
59
PROTECTING THE OPERATIONAL VIABILITY OF REGIONAL AIRPORTS FROM OFF-AIRPORT ENCROACHMENT
60
LIVING WITH THE GA INDUSTRY AT REGIONAL AIRPORTS
60
LIVING WITH THE COST OF AVIATION SAFETY REGULATION
62
LIVING WITH THE COST OF SECURITY REGULATION
62
AVOIDING UNNECESSARY AND INCONSISTENT REGULATION
64
MAINTAINING REGULATORY AWARENESS
64
COMPETITION
64
OPTIMISING NON-AERONAUTICAL OPPORTUNITIES TO SUPPORT AERONAUTICAL OPERATIONS
64
SUSCEPTIBILITY TO BROADER ECONOMIC CONDITIONS
65
ENVIRONMENTAL PRESSURES
65
PROMOTING A BETTER UNDERSTANDING OF REGIONAL AIRPORTS
65
Care has been taken to ensure the factual accuracy of the material in this paper but time and the lack of readily available public data sources does mean that some data may be inaccurate, out-dated or incomplete. The AAA AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES would appreciate any such instance being drawn to its attention.
1
ABOUT THE AUSTRALIAN AIRPORTS ASSOCIATION The Australian Airports Association (AAA) is the national industry voice for airports in Australia. The AAA represents the interests of more than 260 airports and aerodromes Australia wide – from local country community landing strips to major international gateway airports. The AAA’s members include Adelaide, Brisbane, Cairns, Canberra, Darwin, Gold Coast, Hobart, Perth, Melbourne and Sydney airports.
There are a further 100 corporate partners representing aviation stakeholders and organisations that provide goods and services to the airport sector. The AAA facilitates co-operation among all member airports and their many and varied partners in Australian aviation, whilst contributing to an air transport system that is safe, secure, environmentally responsible and efficient for the benefit of all Australians and visitors.
The AAA serves airports across the entire national aviation infrastructure network. This includes:
If you have any questions regarding this document please contact the AAA on 02 6230 1110.
»» Tier 1 Capital City Airports »» Tier 2 Non-Capital International Gateway Airports »» Tier 3 Major Regional Airports with direct interstate services »» Tier 4 Major Regional RPT airports without direct interstate services (with more than 20,000 passengers) »» Tier 5 Regional Airports without direct interstate services (with less than 20,000 passengers) »» Tier 6 Regional Airports without Regular Passenger Transport services (general aviation operations only) »» Tier 7 Remote Community Aerodromes (exist for community service aviation: medical, emergency flights).
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
EXECUTIVE SUMMARY & INTRODUCTION AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
3
EXECUTIVE SUMMARY – KEY MESSAGES There are over 2000 landing sites for aircraft in Australia. While the majority of these are very small and private sites not generally available for public use, this paper identifies and discusses over 400 of the most significant civilian airports in Australia, with particular emphasis on regional airports – that is, those other than the principal capital city airports. Australia’s airports are fundamentally a community asset: >> Our biggest airports, while leased to and operated by the private sector, remain owned by the Commonwealth Government; >> The overwhelming majority of all other Australian airports are owned and operated by the local government authority for the community they serve; >> Of those airports that are not government owned, the majority are owned by, and operated predominantly for the purposes of, resource extraction corporations; and >> While some airports owned by a local government authority may be operated by the private sector on the authority’s behalf, only a handful of Australia’s regional airports are both owned and operated by the private sector for general public use. This paper seeks to bring together little known and seldom recognised facts about Australia’s regional airports, to dispel various myths that circulate about them, and to catalogue the serious challenges that regional airports face in meeting the future needs of the communities they serve. A recent study conducted by Deloitte Access Economics for the Australian Airports Association (AAA) showed that, in 2011, Australia’s airports generated a total economic contribution of around $17.3 billion equivalent to around 1.2% of Gross Domestic Product. National employment at airports was estimated at approximately 115,200 full-time equivalent (FTE) workers.
The report also identified, but did not seek to put a dollar-value on, the other ‘catalytic impacts’ which airports have on the economy – that is, the extent to which the existence of airports and the air services they enable boosts the performance of other industries and indeed the overall economy. While the preponderance of that economic benefit derives from only a handful of airports in the capital cities and major tourist destinations, the balance attributable to regional airports is still economically significant and, perhaps more importantly, vital to the social and economic life of Australia’s regional communities. This paper identifies the range of aviation and nonaviation activity that occurs at Australia’s regional airports, and this alone emphasises how vitally important regional airports are to the communities they serve. Despite this importance and these benefits, however, Australia’s regional airports face considerable challenges in maintaining, let alone growing, the service they provide to their local communities: >> As many as 50% may be operating at a loss each year, and are heavily dependent upon crosssubsidisation by their local government owners who face multiple and competing demands on their limited finances. In these circumstances, developing non-aeronautical activity on-airport can be essential in order to maintain future capacity for aeronautical activity. >> The number of airports serviced by regular public transport (RPT) has declined markedly over the years and trends in airline operations threaten to further reduce this number in the future, risking increased isolation for many Australians in rural and remote communities. >> While total RPT passenger movements at Australia’s regional airports grew at a faster rate than at airports in the major cities between 2005 and 2010 when measured on a national average basis, such figures disguise the volatility and unevenness that is apparent when airport-byairport figures are examined - while some regional airports (and particularly those serving mining sites) did experienced very high growth, a very significant number experienced low, no or negative growth over the same period.
>> Maintaining and developing the capacity of a regional airport so that it is able to be used by RPT aircraft is not only expensive but carries a high degree of risk that assets may be “stranded”, as airlines give no guarantee to continue to maintain RPT services either at current schedules, by current size aircraft, or at all. >> While meaningful traffic figures for Australian non-RPT aviation are not available, it is readily apparent that regional airports accommodate the vast majority of such activities that are vital to the social and economic wellbeing of Australia’s regional communities, and yet both the general aviation (GA) industry and regional airports are under significant pressure to remain operational and efficient. >> Operating an airport calls for specialist expertise that is particularly hard to recruit, train and maintain in regional locations. >> Due to the tyranny of distance, the costs of maintaining and expanding regional airport infrastructure are far, far higher than those incurred by airports in the major population centres – often up to three times in some remote locations, and for some particular specialist services even more. >> Costs of regulation are proportionately greater in the overall budget of regional airports than for capital city airports – often by a factor of three. >> Avoiding safety, security and environmental regulation that is unnecessarily complex or that is not sufficiently sensitive to the circumstances of the individual airport and achieving consistency in the application of regulation across like airports are major challenges not just for airport operators but also for Australia’s many regulators who impact airports.
AS MANY AS 50% OF AUSTRALIA’S REGIONAL AIRPORTS MAY BE OPERATING AT A LOSS EACH YEAR
A resounding majority of Australia’s most important civilian airports available for public use are members of the AAA - the Association’s airport members own and/ or operate 249 such airports. The breadth of the AAA’s membership within the Australian airport industry means that it is an invaluable resource for all Governments and government agencies with a need to consult within the industry to ensure that their policy and operation decisions are well informed and do not have unintended or unexpected adverse consequences.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
5
INTRODUCTION In 2012 the Australian Airports Association (AAA) launched a major paper setting out the results of a study of the economic and social contribution of Australia’s airports, prepared by Deloitte Access Economics. That study looks at all Australian airports and provides an important insight into just how important all our airports are to the Australian economy and community. Just one finding of the study highlights this value: In 2011, Australia’s airports generated a total economic contribution of around $17.3 billion, equivalent to around 1.2% of Gross Domestic Product. National employment at airports was estimated at approximately 115,200 full-time equivalent (FTE) workers.
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
But the study also made clear that there are important differences and distinctions between airports. Essentially, “no two airports are the same”. Among the key findings of the study are the following points of particular relevance to Australia’s regional airports: >> Australia’s network of airports, across major urban centres and regional areas, form an integral part of the national economic infrastructure and are critical to connecting communities and enhancing broader economic performance. >> More than almost any other country, Australia relies on an efficient and reliable aviation sector and airport network for its citizens to remain physically ‘in touch’ with each other and the rest of the world. >> There are around 250 airports which receive Regular Public Transport (RPT) services and many more much smaller airfields and landing strips around the country, with reports of some 2000 across Australia.
>> Airports are capital intensive businesses, underpinned by their principal role as transport infrastructure providers. As such, airports are deeply linked into most economic activities, with these linkages increasingly driven by growth in leisure tourism and the regional expansion of strategic resource and agricultural activities. >> Airport infrastructure, whether terminal facilities or runway works, are among the most expensive forms of commercial and civil construction. >> Beyond their immediate economic footprint, airports play an important social role in connecting individuals, families and communities with the rest of the country and indeed the world. >> Airports provide vital services to their communities, including the facilitation of mail and time sensitive freight deliveries, the Royal Flying Doctor Service, CareFlight, bush taxis, and the transfer of workers to employment centres and job sites. >> Many airports provide training facilities and precincts for high-tech jobs in aviation to ensure the continued and sustainable development of a skilled workforce for the industry. >> Airports recognise their impact on local communities and are increasingly participating in positive activities such as: environmental sustainability initiatives; community engagement programs; and the sponsorship of cultural, sporting and charity events, to ensure they are acting as good corporate citizens within their communities. >> There are significant differences in the business orientation of regional and remote airports and that of much larger airport operations. In many isolated parts of Australia, airports remain the only practical means of access to emergency and essential services and therefore they tend to focus on principal transport infrastructure performance. >> Regional and remote airports generally have low profitability, with around half of survey respondents reporting an operating loss in 2011. >> The majority of regional and remote airports (70%) are served by a single airline.
REGIONAL AIRPORTS PLAY A FUNDAMENTAL ROLE IN SERVING BOTH THEIR LOCAL COMMUNITIES AND THE AUSTRALIAN ECONOMY MORE BROADLY >> There has been a declining trend in the number of regional airports with RPT services over the last two decades. Since 2005, RPT services have ceased at 45 regional airports (mainly on lower density routes), while 25 airports have gained new RPT services. On the other hand, the overall number of passenger movements has increased over this period, from 8.5 million passengers to 22.5 million passengers. >> Annual growth in passenger movements is expected to average 3.3% for regional airports out to 2025. Aircraft movements are expected to grow by 1.7% at regional airports over this timeframe. >> On average, regulatory imposts are higher for regional and remote airports, comprising around 12% of total expenses, compared with about 4% for major and major regional airports. While the 11 largest airports in Australia (all capital city airports, plus Gold Coast, Cairns and Alice Springs airports) account for about 87% of overall passenger traffic and make the greatest economic contribution in terms of direct and indirect employment, the remaining “regional” airports play a fundamental role in serving both their local communities and the Australian economy more broadly.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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At the same time, key facts about our regional airports are little known or seldom acknowledged, unjustifiable myths prevail and the challenges they face are seldom recognised. The aim of this paper is to establish a significant data source about Australia’s regional airports in the hope that their value will be better recognised within the community, that those who directly or indirectly regulate airports will be better able to appreciate and assess the likely impacts of the regulatory requirements they administer or impose, and that those who ultimately own our regional airports will better understand the challenges faced by those who operate their airports on their behalf.
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
In large part the paper draws together data already available from a variety of other sources, but seldom available on a collected basis. In assembling this collection, the AAA acknowledges its reliance on a number of important sources and, in particular: >> Deloitte Access Economics – Connecting Australia – The economic and social contribution of Australia’s airports, June 2012; >> Publications of the Bureau of Infrastructure, Transport and Regional Economics; and >> The Report of the General Aviation Industry Action Agenda, 6 August 2008. In preparation of the paper, the AAA has received valuable input from the operators of many regional airports and wishes to express its appreciation for the time they have taken from their already busy working lives to make that contribution.
THE FACTS AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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AUSTRALIA’S AIRPORTS There are, according to Airservices Australia, over 2000 airports and airfields in Australia. They fall into four very broad categories: >> Those generally known as the “privatised airports” – the major capital city and other significant airports formerly operated by the Federal Airports Corporation1 but since leased by the Commonwealth on a long-term basis to private sector companies which operate them commercially under a purposedesigned regulatory regime embodied in the Airports Act 1996 (Cth); >> State and (very predominantly) local government owned regional airports – while these are generally directly operated by their government owner, some are contracted to be operated by private companies on behalf of the government owner and a small number are let on long term leases to private companies that operate them commercially under specific State airport regulation; >> Defence owned airports – while the primary purpose of Defence air bases is to support the generation, sustainment and deployment of military capability to meet strategic tasking set by the Australian Government and some of these are operated exclusively for military purposes, there are five joint use airports which permit civil aviation use under sub-leases to private sector airport operator companies - Darwin (NT), Curtin (Derby, WA), Learmonth (Exmouth, WA), Williamtown (Newcastle, NSW) and Townsville (Qld) – and where Defence provides air traffic control, radar facilities and aviation rescue and fire fighting services to both military and civilian users; and >> Completely privately owned airports and airstrips.
1
10
Australian airports are far from homogeneous and there are many other ways in which they can conceivably be categorised – for example, by location, ownership, operation, use, size or other factors. The vast majority of the 2000+ are small, private grass strips used predominantly by the owner of the land on which they sit and not available for public use – or at least not used by regular public transport (RPT) or charter aircraft. It is beyond the capacity of this paper to identify and describe each of Australia’s 2000+ airfields. Accordingly, this paper focuses only on those that, because of their role and importance within the civilian public transport network, might be viewed as the most significant - although it is important to recognise that even the smallest and most remote airfield may be vitally important to those whose lives, livelihood and enjoyment depend upon it. There are some 317 Australian airports which are certified (190) or registered (127) by the Civil Aviation Safety Authority (CASA) as having significant RPT or charter use or potential use. While certification or registration is essential for the operation of RPT services at an airport, many airports that do not attract RPT services nevertheless choose to incur the effort and cost to become registered so that the aircraft using them can have published what are known as GPS approaches which are particularly important, for example, to assist Royal Flying Doctor Service aircraft operating in low visibility situations.
ACT - Canberra; NSW - Sydney, Bankstown, Camden; Qld - Brisbane, Gold Coast, Townsville, Cairns, Mackay, Archerfield, Mt. Isa; NT - Darwin, Alice Springs, Tennant Creek; Vic - Melbourne, Essendon, Moorabbin; Tas - Hobart, Launceston; SA - Adelaide, Parafield; WA - Perth, Jandakot
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> Airports highlighted in pink are “privatised airports” - former Federal Airport Corporation airports still owned by the Commonwealth but leased to private operators in privatisation process undertaken in the 1990s – importantly, these airports are subject to detailed and complex regulation under the Airports Act 1996 that does not apply to other airports, whether operated by government or commercial operators; >> Airports highlighted in green are owned by, or principally operated to serve, resources companies and located to serve their mining or other extraction operations; >> Airports highlighted in orange are owned by aero clubs; and >> Airports highlighted in red are understood to be essentially private sector commercial enterprises offering services to the public at large.
The following table lists those airports, and also indicates which are members of the AAA – >> CASA certified airports are able to be used by RPT or charter aircraft with more than 30 passenger seats; >> CASA registered airports have been checked and verified by a qualified person approved by CASA for use at least once a week by RPT or charter aircraft with more than 9 but not more than 30 passenger seats; >> Airports highlighted in blue are directly or indirectly owned by government or community bodies for the benefit of the community they serve;
Airport Name
Airport Operator
CASA CASA AAA Certified Registered Member
Adelaide, SA
Adelaide Airport Limited
y
y
Albany, WA
City of Albany
y
y
Albury, NSW
Albury City Council
y
y
Alice Springs, NT
Alice Springs Airport Pty Ltd
y
y
Alpha, Qld
Barcaldine Regional Council
y
Ararat, Vic
Ararat Rural City Council
Y
Archerfield, Qld
Archerfield Airport Corporation
y
Argyle, WA
Argyle Diamond Limited
Y
Armidale, NSW
Armidale Dumaresq Council
y
Aurukun, Qld
Aurukun Shire Council
y
Avalon, Vic
Avalon Airport Australia Pty Ltd
y
y
Ayers Rock, NT
ILC Tourism Pty Ltd
y
y
Bairnsdale, Vic
East Gippsland Shire Council
y
Balgo Hill, WA
Wirramanu Aboriginal Community
y
Ballarat, Vic
City of Ballarat
y
Ballera, Qld
Santos Limited
y
Ballina/Byron Gateway, NSW
Ballina Shire Council
y
Balranald, NSW
Balranald Shire Council
Bankstown, NSW
Bankstown Airport Limited
y y y
y y y
y y
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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Airport Name
Airport Operator
Barcaldine, Qld
Barcaldine Regional Council
y
Barimunya, WA
Barimunya Joint Venture
y
Barrow Island, WA
Bristow Helicopters Australia Pty Ltd
Bathurst, NSW
Bathurst Regional Council
Bathurst Island, NT
Tiwi Island Local Government
Bedourie, Qld
Diamantina Shire Council
y
Bellevue, WA
XSTRATA Nickel Australasia Operations Pty Ltd
y
Benalla, Vic
Benalla Rural City Council
y
y
Bendigo, Vic
City of Greater Bendigo
y
y
Birchip, Vic
Buloke Shire Council
y
Birdsville, Qld
Diamantina Shire Council
y
Blackall, Qld
Blackall-Tambo Regional Council
y
Blackwater, Qld
BM Alliance Coal Operations
y
Boolgeeda, WA
Hamersley Iron Pty Ltd
y
Boulia, Qld
Boulia Shire Council
y
Bourke, NSW
Bourke Shire Council
y
Bowen, Qld
Whitsunday Regional Council
y
Brewarrina, NSW
Brewarrina Shire Council
y
Brisbane, Qld
Brisbane Airport Corporation
y
Brockman, WA
Pilbara Iron (Company Services) Pty Ltd
y
Broken Hill, NSW
Council of the City of Broken Hill
y
Bronzewing, WA
Navigator (Bronzewing) Pty Ltd
Broome, WA
Broome International Airport
Bunbury, WA
Bunbury City
Bundaberg, Qld
Bundaberg Regional Council
y
Burketown, Qld
Burke Shire Council
y
Busselton, WA
Busselton Shire Council
y
y
Cairns, Qld
Cairns Airport Pty Ltd
y
y
Camden, NSW
Camden Airport Ltd
y
Camooweal, Qld
Mount Isa City Council
y
Canberra, ACT
Canberra Airport Pty Limited
y
y
Carnarvon, WA
Shire of Carnarvon
y
y
Ceduna, SA
District Council of Ceduna
y
y
Century Mine, Qld
MMG Century Mine Limited
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
CASA CASA AAA Certified Registered Member y y y
y y
y
y y y
y Y
y y
Y y
Airport Name
Airport Operator
CASA CASA AAA Certified Registered Member
Charleville, Qld
Murweh Shire Council
Charters Towers, Qld
Charters Towers City Council
y
Chillagoe, Qld
Tablelands Regional Council
y
y
Chinchilla, Qld
Western Downs Regional Council
y
y
Christmas Creek, WA
FMG Chichester Pty Ltd
Y
Christmas Island, WA
Holyman Shipping Services Pty Limited
y
Clermont, Qld
Isaac Regional Council
y
Cleve, SA
District Council of Cleve
Cloncurry, Qld
Cloncurry Shire Council
Cobar, NSW
Cobar Shire Council
Cocos (Keeling) Island ITNL
Holyman Shipping Services Pty Limited
y
y
Coen, Qld
Cook Shire Council
y
y
Coffs Harbour, NSW
Coffs Harbour City Council
y
y
Condobolin, NSW
Lachlan Shire Council
Coober Pedy, SA
District Council of Coober Pedy
y
y
Cooktown, Qld
Cook Shire Council
y
y
Coolah, NSW
Coolah Shire Council
y
y
y y
y
y
y
y
y
Cooma-Snowy Mountains, NSW Snowy Mountains Airport Corporation
y
y
y
y
Y
Coonabarabran, NSW
Warrumbungle Shire Council
Coonamble, NSW
Coonamble Shire Council
y
Coondewanna, WA
BHP Billiton Iron Ore
y
Cootamundra, NSW
Cootamundra Shire Council
y
y
Corowa, NSW
Corowa Shire Council
y
y
Corryong, NSW
Towong Shire Council
y
Cowell, SA
District Council of Franklin Harbour
y
Cowra, NSW
Cowra Shire Council
Croker Island, NT
Minjilang Community Inc
y
Cunderin, WA
Cunderin Shire Council
y
Cunnamulla, Qld
Paroo Shire Council
y
Darlot, WA
Barrick (Darlot) Ltd
y
Darwin, NT
Darwin International Airport Pty Ltd
y
Degrussa, WA
Sandfire Resources NL
y
Deniliquin, NSW
Deniliquin Council
Derby, WA
Shire of Derby West Kimberley
y
y
y y
y
y
y y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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Airport Name
Airport Operator
Devonport, Tas
Tasmanian Ports Corporation Pty Ltd
Dirranbandi, Qld
Balonne Shire Council
y
Donald, Vic
Buloke Shire Council
y
Doomadgee, Qld
Doomadgee Aboriginal Shire Council
Y
Dubbo, NSW
Dubbo City Council
Y
Dysart, Qld
BHP Billiton Mitsubishi Alliance
Y
East Jaurdi, WA
Polaris Metals Pty Ltd
y
Echuca, Vic
Shire of Campaspe
y
Elcho Island, NT
Marthakal Yolngu Airline Pty Ltd
y
Elrose, Qld
FMR Investments Pty Limited (Eloise Copper Mine)
y
Emerald, Qld
Central Highlands Regional Council
y
y
Esperance, WA
Esperance Shire Council
y
y
Essendon, Vic
Essendon Airport Pty Ltd
y
y
Fitzroy Crossing, WA
Shire of Derby West Kimberley
y
y
Flinders Island, Tas
Flinders Council
y
y
Forbes, NSW
Forbes Shire Council
Forrest, WA
Fayburn Pty Ltd
y
Forrestania, WA
Western Area NL
y
Fortescue Dave Forrest, WA
FMG Chichester Pty Ltd
y
Garden Point, NT
Tiwi Island Local Government
y
Gayndah, Qld
North Burnett Regional Council
y
Georgetown, Qld
Etheridge Shire Council
y
Geraldton, WA
City of Greater Geraldton
y
y
Gladstone, Qld
Gladstone Regional Council
y
y
Glen Innes, NSW
Glen Innes Severn Council
Gold Coast, Qld
Gold Coast Airport Pty Limited
y
Golden Grove, SA
Oxiana Golden Grove Pty Ltd
y
Goodooga, NSW
Brewarrina Shire Council
y
Goondiwindi, QLD
Goondiwindi Regional Council
y
Goulburn, NSW
Goulburn City Council
y
Gove, NT
Nhulunbuy Corporation
y
y
Grafton, NSW
Clarence Valley Council
y
y
Granny Smith, WA
Barrick(Granny Smith) Pty Ltd
y
Griffith, NSW
Griffith City Council
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
CASA CASA AAA Certified Registered Member y
y
y
y y
y
y
y y
y
Airport Name
Airport Operator
CASA CASA AAA Certified Registered Member
Groote Eylandt, NT
Groote Eylandt Mining Company Pty Ltd
Gunnedah, NSW
Gunnedah Shire Council
Halls Creek, WA
Aerodrome Management Services Pty Ltd
Hamilton, Vic
Southern Grampians Shire Council
Hamilton Island, Qld
Great Barrier Reef Airport Pty Ltd
Hay, NSW
Hay Shire Council
Hervey Bay, Qld
Fraser Coast Regional Council
y
y
Hobart, Tas
Hobart International Airport Pty Ltd
y
y
Horn Island, Qld
Torres Shire Council
y
y
Hooker Creek, NT
Lajamanu Community Council Inc
y
Hopetoun, Vic
Yarriambiack Shire Council
y
y
Horsham, Vic
Horsham City Council
y
y
Hughenden, Qld
Flinders Shire Council
Innisfail, Qld
Johnstone Shire Council
y
Inverell, NSW
Inverell Shire Council
y
Jabiru, NT
Energy Resources of Australia
y
Jacinth Ambrosia, SA
Iluka (Eucla Basin) Pty Ltd
y
Jandakot, WA
Jandakot Airport Holdings Pty Ltd
Y
Julia Creek, Qld
McKinlay Shire Council
y
Kalbarri, WA
Shire of Northampton
y
Kalgoorlie-Boulder, WA
City of Kalgoorlie-Boulder
y
Kalkgurung, NT
Dagurau Community Council Inc
y
Kalumburu, WA
Kalumburu Mission
y
Kambalda, WA
St Ives Mining Company Pty Ltd
y
Karara, Qld
Karara Mining Limited
y
Karratha, WA
Shire of Roebourne
y
Karumba, Qld
Carpentaria Shire Council
y
Katanning, WA
Shire of Katanning
y
Kempsey, NSW
Kempsey Shire Council
y
y
Kerang, Vic
Gannawarra Shire Council
y
y
Kimba, SA
Kimba District Council
y
y
King Island, Tas
King Island Council
y
y
Kingaroy, Qld
South Burnett Regional Council
y
y
Kingscote, SA
Kangaroo Island Council
y
y
y y y
y y
y y
y y
y
y y
y
y
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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Airport Name
Airport Operator
Kowanyama, Qld
Kowanyama Community Council
y
y
Kununurra, WA
Shire of Wyndham East Kimberley
y
y
Lake Cargelligo, NSW
Lachlan Shire Council
y
Lake Evella, NT
Gapuwiyak Community Inc
y
Latrobe Valley, Vic
Latrobe City Council
y
Launceston, Tas
Australian Pacific Airports (Launceston) Pty Ltd
y
y
Laverton, Vic
Laverton Shire Council
y
y
Lawlers, WA
Barrick (Lawlers) NL
y
Leigh Creek, SA
Flinders Operating Services Pty Ltd
Leinster, WA
BHP Billiton Nickel West Pty Ltd
Leongatha, Vic
Leongatha Aerodrome Users Pty Ltd
Leonora, WA
Shire of Leonora
Lightning Ridge, NSW
Walgett Shire Council
Lismore, NSW
Lismore City Council
y
Lockhart River, Qld
Lockhart River Aerodrome Company Pty Ltd
y
Longreach, Qld
Longreach Airport Pty Ltd
y
y
Lord Howe Island, NSW
Lord Howe Island Board
y
y
Loxton, SA
District Council of Loxton Waikerie
Mackay, Qld
Mackay Airport Pty Ltd
Maitland, NSW
Royal Newcastle Aero Club
y
Mallacoota, Vic
East Gippsland Shire Council
y
y
Mangalore, Vic
Mangalore Airport Pty Ltd
y
y
Maningrida, NT
Maningrida Council Inc
y
Manjimup, WA
Shire of Manjimup
y
Mareeba, Qld
Tablelands Regional Council
y
y
Maryborough, Qld
Fraser Coast Regional Council
y
y
Maryborough, Vic
Central Goldfield Shire Council
McArthur River Mine, NT
McArthur River Mining Pty Ltd
y
Meekatharra, WA
Shire of Meekatharra
y
y
Melbourne, Vic
Australian Pacific Airports (Melbourne) Pty Ltd
y
y
Merimbula, Vic
Airport Agencies Pty Ltd
y
y
Middlemount, Qld
Anglo Coal (Capcoal Management) Pty Ltd
y
Mildura, Vic
Mildura Rural City Council
y
Milingimbi, NT
Milingimbi Community Council Inc
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
CASA CASA AAA Certified Registered Member
y y
y y y y
y y
y y
y y
y
y
y
y y
Airport Name
Airport Operator
CASA CASA AAA Certified Registered Member
Moomba, SA
Santos Limited
y
Moorabbin, Vic
Moorabbin Airport Corporation Pty Ltd
y
Moranbah, Qld
BM Alliance Coal Operations
y
Morawa, WA
Shire of Morawa
Moree, NSW
Moree Plains Shire Council
y
Mornington Island, Qld
Mornington Shire Council
y
Moruya, NSW
Eurobodalla Shire Council
y
y
Mount Gambier, SA
District Council of Grant
y
y
Mount Gordon, Qld
Birla Mt Gordon Pty Ltd
y
Mount Hotham, Vic
MHSC Transportation Services Pty Ltd
y
y
Mount Isa, Qld
Mount Isa Airport Pty Ltd
y
y
Mount Keith, WA
BHP Billiton Nickel West Pty Ltd
y
y
Mount Magnet, WA
Mount Magnet Shire Council
y
y
Mudgee, NSW
Mudgee Shire Council
y
y
Murray Field, WA
Royal Aero Club Of Western Australia
Murrin Murrin, WA
Minara Resources Limited
Naracoorte, SA
Naracoorte Lucindale Council
Narrabri, NSW
Narrabri Shire Council
y
y
Narrandera, NSW
Narrandera Shire Council
y
y
Narromine, NSW
Narromine Shire Council
Newman, WA
Shire of East Pilbara
Ngukurr, NT
Yugul Mangi Community Government Council
Nifty, WA
Birla Nifty Pty Ltd
y
Norfolk Island, NSW
Administration of Norfolk Island
y
Normanton, Qld
Shire of Carpentaria
y
Northern Peninsula, Qld
Northern Peninsula Area Regional Council
y
Nyngan, NSW
Bogan Shire Council
y
Oenpelli, NT
Kunbarlianjnja Community Government
y
Olympic Dam, SA
WMC (Olympic Dam Corporation) Pty Ltd
y
y
Onslow, WA
Shire of Ashburton
y
y
Oodnadatta, SA
Outback Communities Authority
Orange, NSW
Orange City Council
Orbost, Vic
East Gippsland Shire Council
Osborne Mine, Qld
Ivanhoe (Osborne) Pty Ltd
y y y
y y y
y y
y
y y
y
y
y y
y y
y
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
17
18
Airport Name
Airport Operator
CASA CASA AAA Certified Registered Member
Palm Island, Qld
Palm Island Aboriginal Shire Council
Paraburdoo, WA
Pilbara Iron Pty Ltd
y
y
Parafield, SA
Parafield Airport Limited
y
y
Parkes, NSW
Parkes Shire Council
y
y
Perth INTL, WA
Perth Airport Pty Ltd
y
y
Plutonic, WA
Barrick (Plutonic) Limited
y
Pooncarie, NSW
Wentworth Shire Council
Pormpuraaw, Qld
Pormpuraaw Aboriginal Shire Council
y
Port Augusta, SA
Corporation of the City of Port Augusta
y
y
Portland, Vic
Glenelg Shire Council
y
y
Port Hedland, WA
Town of Port Hedland
y
y
Port Keats, NT
Thamarrurr Regional Council
Port Lincoln, SA
District Council of Lower Eyre Peninsula
y
y
Port Macquarie, NSW
Port Macquarie-Hastings Council
y
y
Port Pirie, SA
Port Pirie Regional Council
Prominent Hill, SA
Oxiana Prominent Hill Operations Pty Ltd
y
y
y
y y
y y
Proserpine/Whitsunday Coast, Qld Whitsunday Regional Council
y
Quilpie, Qld
Quilpie Shire Council
y
Quirindi, NSW
Liverpool Plains Shire Council
y
Ramingining, NT
Ramingining Community Council Inc
y
Ravensthorpe, WA
Shire of Ravensthorpe
Renmark, SA
District Council of Renmark Paringa
Richmond, NSW
Richmond Shire Council
Robinvale, Vic
Swan Hill Rural Shire Council
Rockhampton, Qld
Rockhampton Shire Council
y
Roma, Qld
Maranoa Regional Council
y
Rottnest Island, WA
Rottnest Island Authority
y
Saibai Island, Torres Strait
Saibai Island Community Council
y
Saint Arnaud, Vic
Northern Grampians Shire Council
y
Saint George, Qld
Balonne Shire Council
Saint Helens, Tas
Break O’Day Council
y
Scone, NSW
Upper Hunter Shire Council
y
Sea Lake, Vic
Buloke Shire Council
y
Shark Bay, WA
Aspen Monkey Mia Pty Ltd
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
y
y
y y y y
y y
y
y
y
y
Airport Name
Airport Operator
CASA CASA AAA Certified Registered Member
Shay Gap, WA
BHP Billiton Iron Ore Pty Ltd
Shepparton, Vic
Shepparton City Council
y
Smithton, Tas
Department of Infrastructure Energy and Resources
y
Snake Bay, NT
Tiwi Island Local Government
y
Solomon, WA
Fortescue Metals Group Ltd
Southern Cross, WA
Shire of Yilgarn
y
South Goulburn Island, NT
Warruwi Community Inc
y
Southport, Qld
Southport Flying Club
y
Stanthorpe, Qld
Stanthorpe Downs Regional Council
y
Stawell, Vic
Northern Grampians Shire Council
y
y
Strahan, Tas
West Coast Council
y
y
Streaky Bay, SA
District Council of Streaky Bay
y
y
Sunshine Coast, Qld
Sunshine Coast Regional Council
y
Sunrise Dam, WA
Anglogold Ashanti Australia Ltd
y
Swan Hill, Vic
Swan Hill Rural City Council
y y
y
y y
y
Sydney (Kingsford Smith) INTL, NSW Sydney Airport Corporation
y
y
Tamworth, NSW
Tamworth Regional Council
Y
y
Taree, NSW
Greater Taree City Council
y
y
Taroom, Qld
Banana Shire Council
y
y
Telfer, WA
Newcrest Mining Limited
y
y
Temora, NSW
Temora Shire Council
y
y
Tennant Creek, NT
Tennant Creek Airport Pty Ltd
Thangool, Qld
Banana Shire Council
y
y
Thargomindah, Qld
Bulloo Shire Council
y
y
The Granites, NT
Newmont Tanami Pty Ltd
y
The Monument, Qld
Southern Cross Fertilisers Pty Ltd
y
Tibooburra, NSW
NSW Department if Infrastructure, Planning and Natural Resources
y
Tocumwal, NSW
Berrigan Shire Council
y
Toowoomba, Qld
Toowoomba Regional Council
y
y
Townsville, Qld
Townsville Airport Pty Ltd
Y
y
Trepell, Qld
BHP Billiton Minerals Pty Ltd
y
Troughton Island, WA
ShoreAir Pty Ltd
y
Truscott-Mungalalu, WA
ShoreAir Pty Ltd
y
y
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
19
20
Airport Name
Airport Operator
Tumby Bay, SA
District Council of Tumby Bay
y
Tumut, NSW
Tumut Shire Council
y
Wagga Wagga, NSW
Wagga Wagga City Council
Waikerie, SA
District Council of Loxton Waikerie
y
Walgett, NSW
Walgett Shire Council
y
Wangaratta, Vic
Rural City of Wangaratta
y
Warburton, WA
Warburton Community
y
Warracknabeal, Vic
Yarriambiack Shire Council
y
y
Warren, NSW
Warren Shire Council
y
y
Warrnambool, Vic
Warrnambool Shire Council
y
y
Warwick, Qld
Southern Downs Regional Council
y
Weipa, Qld
RTA Weipa Pty Ltd
Wentworth, NSW
Wentworth Shire Council
West Angelas, WA
Robe River Mining Co Pty Ltd
West Sale, Vic
Wellington Shire Council
West Wyalong, NSW
Bland Shire Council
y
Wilkins
Australian Antarctic Division
y
Whyalla, SA
Corporation of the City of Whyalla
y
Wiluna, WA
Wiluna Shire Council
y
Windarling, WA
Portman Iron Ore Limited
y
Windorah, Qld
Barcoo Shire Council
y
Winton, Qld
Winton Shire Council
y
Wollongong, NSW
Shellharbour City Council
y
Woodie Woodie, WA
Pilbara Manganese Pty Ltd
y
Wudinna, SA
District Council of Le Hunte
y
Wycheproof, Vic
Buloke Shire Council
y
Wynyard, Tas
Burnie Airport Corporation Pty Ltd
Yarram, Vic
Wellington Shire Council
y
Yarrawonga, Vic
Moira Shire Council
y
Yorke Island, Torres Strait
Yorke Island Community Council
y
Young, NSW
Young Shire Council
y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
CASA CASA AAA Certified Registered Member
y
y y
y
y y
y y
y y y
y
y
y y
In addition to the above certified and registered airports, AAA members operate a number of other airports that are not required to be either CASA certified or CASA registered - whether because of their Defence ownership or because the scope of operations is below the threshold requiring certification or registration.
These other airports are listed in the following table, where again: >> Airports highlighted in blue are directly or indirectly owned by government or community bodies for the benefit of the community they serve; >> Airports highlighted in orange are owned by aero clubs; and >> Airports highlighted in red are understood to be essentially private sector commercial enterprises offering services to the public at large.
Airport
Airport Operator
AAA Member
Apollo Bay (Marengo), Vic
Colac-Otway Shire Council
y
Ashford, NSW
Inverell Shire Council
y
Augathella, Qld
Murweh Shire Council
y
Bacchus Marsh*, Vic
Bacchus Marsh Aerodrome Management Inc
y
Baradine, NSW
Warrumbungle Shire Council
Y
Barcoo, Qld
Barcoo Shire Council
Y
Barraba, NSW
Tamworth Regional Council
Y
Biggenden, Qld
North Burnett Regional Council
Y
Boggabri, NSW
Narrabri Shire Council
Y
Booleroo Centre Community Airstrip, SA
District Council of Mount Remarkable
Y
Boomi, NSW
Moree Plains Shire Council
Y
Burren Junction, NSW
Walgett Shire Council
Y
Byrock, NSW
Bourke Shire Council
Y
Cambridge, Tas
Cambridge Airport
Y
Cessnock, NSW
Aviation and Leisure Corporation Pty Ltd
Y
Coffin Bay, SA
District Council of Lower Eyre Peninsula
Y
Cohuna, Vic
Gannawarra Shire Council
Y
Colac, Vic
Colac-Otway Shire Council
Y
Collinsville, NSW
Bourke Shire Council
Y
Collinsville, Qld
Whitsunday Coast Airport
Y
Cummins, SA
District Council of Lower Eyre Peninsula
Y
Curtin, WA
Derby West Kimberley Shire Council
Y
Dalby, Qld
Western Downs Regional Council
Y
Delungra, NSW
Inverell Shire Council
Y
Dimbulah, Qld
Tablelands Regional Council
Y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
21
22
Airport
Airport Operator
Dulacca, Qld
Western Downs Regional Council
Y
Eidsvold, Qld
North Burnett Regional Council
Y
Elliston, SA
Elliston District Council
Y
Emu Park, Qld
Rockhampton Regional Council
Y
Engonnia, NSW
Bourke Shire Council
Y
Exmouth (Learmonth), WA
Shire of Exmouth
Y
Eubalong, NSW
Cobar Shire Council
Y
Fords Bridge, NSW
Bourke Shire Council
Y
Goolgowi, NSW
Carrathool Shire Council
Y
Hawker, WA
Emerald Oak Pty Ltd – Forte Airport Management
Y
Hillston, NSW
Carrathool Shire Council
Y
Hungerford, Qld
Bulloo Shire Council
Y
Jundah, Qld
Barcoo Shire Council
Y
Karumba, Qld
Carpentaria Shire Council
Y
Kingston SE, SA
Kingston District Council
Y
Lake Cullulleraine, Vic
Mildura Airport Pty Ltd
Y
Lakeland, Qld
Cook Shire Council
Y
Laura, Qld
Cook Shire Council
Y
Lethbridge Airpark, Vic
G&P Baum Superannuation Fund
Y
Lock, SA
Elliston District Council
Y
Lucindale, SA
Narracoorte Lucindale Shire Council
Y
Miles, Qld
Western Downs Regional Council
Y
Millmerran, Qld
Toowoomba Regional Council
Y
Monto, Qld
North Burnett Regional Council
Y
Morven, Qld
Murweh Shire Council
Y
Moura, Qld
Banana Shire Council
Y
Mount Garnet, Qld
Tablelands Regional Council
Y
Mt Hope, NSW
Cobar Shire Council
Y
Mungindi, NSW
Moree Plains Shire Council
Y
Nanango, Qld
South Burnett Regional Council
Y
Newcastle, NSW
Newcastle Airport Limited
Y
Nhill, Vic
Hindmarsh Shire Council
Y
Nullagine, WA
East Pilbara Shire Council
Y
Nymagee, NSW
Cobar Shire Council
Y
Ouyen, Vic
Mildura Airport Pty Ltd
Y
Parkside, Vic
Wellington Shire Council
Y
Patchewollock, Vic
Yarriambiack Shire Council
Y
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
AAA Member
Airport
Airport Operator
AAA Member
Peak Hill, NSW
Parkes Shire Council
Y
Pinnaroo, SA
South Mallee District Council
Y
Pittsworth, Qld
Toowoomba Regional Council
Y
Point Cook, Qld
Rehbein Airport Consulting
Y
Quorn, SA
Flinders Ranges Council
Y
Roebourne, WA
Shire of Roebourne Council
Y
Rollerston, Qld
Central Highlands Regional Council
Y
Springsure, Qld
Central Highlands Regional Council
Y
Stonehenge, Qld
Barcoo Shire Council
Y
Tambo, Qld
Blackall-Tambo Regional Council
y
Tara, Qld
Western Downs Regional Council
y
Theodore, Qld
Banana Shire Council
y
Tottenham, NSW
Lachlan Shire Council
Y
Trangie, NSW
Narromine Shire Council
Y
Trundle, NSW
Parkes Shire Council
Y
Tullamore, NSW
Parkes Shire Council
Y
Wee Waa, NSW
Narrabri Shire Council
Y
Whim Creek, WA
Shire of Roebourne Council
Y
* Bacchus Marsh Airfield is owned by the Shire of Moorabool, but is operated by the Bacchus Marsh Airfield Management (BMAM). BMAM comprises representatives of the shire, the three resident gliding clubs (the Geelong Gliding Club, Victorian Motorless Flight Group and he Beaufort Gliding Club[4]), and the Tarago Valley School of Aviation (a power flying school).
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
23
A very large number of Australia’s airports were originally established by the Commonwealth Government, generally for military use. In addition to the major “privatised” airports highlighted above in pink that are still owned by the Commonwealth although leased to and operated by private sector companies, some hundreds of Australia’s regional, rural and remote airports were originally established by the Commonwealth for its armed forces. When no longer required for those purposes, these airports were gradually transferred to the ownership of the relevant local government authority under Aerodrome Local Ownership Plans (ALOP) or sold to private interests. This is far more than a matter of historical interest, because the ALOP agreements under which these transfers took place impose obligations on the recipient local government to maintain and operate the airport as an airport.
The ALOP airports are as follows:
New South Wales Albury Armidale Ballina Balranald Baradine Bathurst Bourke Brewarrina Broken Hill Burren Junction Carinda Casino Cessnock Cobar Coffs Harbour Collarenebri Condobolin Coolah Cooma Coonabarabran Coonamble Cootamundra Cowra Deniliquin Dubbo Evans Head
Gilgandra Glen Innes Goodooga Goulburn Grafton Griffith Gunnedah Hay Hillston Inverell Ivanhoe Kempsey Lake Cargelligo Lightning Ridge Lismore Lord Howe Island Merimbula Moree Moruya Mudgee Mungindi Narrabri Narrandera Narromine Newcastle Norfolk Island
Nyngan Orange Parkes Pooncarie Port Macquarie Quirindi Scone Schofields Tamworth Taree Temora Tibooburra Tocumwal Tooraweenah Tottenham Tumut Wagga Wagga Walgett Warren Wee Waa West Wyalong White Cliffs Wilcannia Wollongong Young
Northern Territory Borroola Gove
24
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
Groote Eylandt Jabiru
Tindal Yulara
Queensland Alpha Aramac Atherton Aurukun Ayr Bamaga/Injoo Barcaldine Bedourie Birdsville Blackall Blackwater Bollon Boulia Bowen Bundaberg Burketown Caloundra Charleville Charters Towers Chillagoe Chinchilla Clermont Cloncurry Coen Collinsville Cooktown Croydon Cunnamulla Dajarra Dalby Dirranbandi
Tasmania Doomadgee Dysart Emerald Eromanga Eulo Gayndah Georgetown Goondiwindi Gregory Downs Gympie Harvey Bay Hughenden Ingham Injune Innisfail Isisford Julia Creek Jundah Karumba Kingaroy Kowanyama Lockhart River Longreach Magnetic Island Mareeba Maroochydore Maryborough Middlemount Miles Mitchell Monto
Monto Moranbah Mornington Island Mt Coolon Mt Garnet Muttaburra Normanton Oakey Pormpuraaw Quilpie Redcliffe Richmond Rockhampton Roma St George Stanthorpe Stonehenge Tara Taroom Thargomindah Theodore Thursday Island Toowoomba Weipa Windorah Winton Wondai Wyandra
Burnie/Wynyard Devonport Flinders Island
King Island Queenstown Smithton
St Helens Strahan
Horsham Kerang Latrobe Valley Leinster Leongatha Mallacoota Maryborough Mildura Nhill Orbost Portland Robinvale
Sea Lake Shepparton St Arnaud Stawell Swan Hill Wangaratta Warracknabeal Warrnambool West sale Wycheproof Yarram
Victoria Ararat Bacchus Marsh Bairnsdale Ballarat Benalla Bendigo Birchip Corryong Donald Echuca Hamilton Hopetoun
Western Australia Albany Balgo Hill Broome International Bunbury Carnarvon Cue Cunderdin Curtin Derby Esperance Fitzroy Crossing
Geraldton Halls Creek Kalbarri Kununurra Laverton Learmonth Leonora Marble Bar Meekatharra Mt Magnet Mullewa
Newman Norseman Nullagine Onslow Paraburdoo Port Hedland Rottnest Island Southern Cross Wiluna Wittenoom Wyndam
South Australia Ceduna Cleve Coober Pedy Cowell Gawler Kimba Kingscote
Leigh Creek Loxton Maria Marree Millicent Minnipa Naracoorte
Port Augusta Port Pirie Renmark Streaky Bay Waikerie Whyalla Wudinna
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
25
The agreements under which those airports were transferred to local government ownership include clauses which require, for example, that the local government body: “(a) shall operate and maintain the aerodrome, open to the public, in compliance with Civil Aviation Regulations … (b) shall be solely responsible for developing, operating and maintaining the aerodrome including visual aids and associated equipment to [CASA] standards ... (c) shall permit open, unrestricted and nondiscriminatory access to the aerodrome by airline and aircraft operators on reasonable terms and conditions, consistent with the physical limitations of the aerodrome … (e) shall be responsible for the safety of the aerodrome … (f) shall be responsible for the security of the aerodrome … (g) shall take such action as is within its power to prevent the restriction of aircraft operations to and from the aerodrome by objects, such as buildings, other structures, trees or other natural objects … (h) shall take such action as is within its power to: (I) create land-use zoning around the aerodrome which will prevent residential and other incompatible development in areas which are, or may be, adversely affected by aircraft noise; (ii) prevent the introduction of activities likely to create a hazard to aircraft …”. Importantly, the agreements as they currently apply allow the local government body to sell, lease or otherwise dispose of the airport only with the consent of the Secretary of the Department of Infrastructure and Transport where the alternative use of the airport would result in the closure of the airport or result in it no longer continuing to operate as an airport. These clauses are essentially the same as those in the Airports Act leases for the “privatised airports”, and place heavy and ongoing obligations on affected local government bodies.
26
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
So, what’s it all mean? As will be readily apparent from the highlighting in the tables above, Australia’s airports are fundamentally a community asset: >> Our biggest airports, while leased to and operated by the private sector, remain owned by the Commonwealth Government; >> The overwhelming majority of all other Australian airports are owned and operated by the local government authority for the community they serve; >> Of those airports that are not government owned, the majority are owned by, and operated predominantly for the purposes of, resource extraction corporations; and >> While some airports owned by a local government authority may be operated by the private sector on the authority’s behalf, only a handful of Australia’s regional airports are both owned and operated by the private sector for general public use. Because they are a community resource, it is not only important that the community recognise the value this provides but also that all levels of government and all government regulators take care that their custody and regulation of airports do not jeopardise the value that they provide to the communities they serve. It is also apparent from the above tables that a resounding majority of the listed airports are members of the AAA: >> the Association’s airport members own and/or operate 249 of Australia’s most important airports; >> AAA members operate 113 of the 190 certified airports and, of the remaining 77, 44 are operate by resource companies and are essentially not part of the public transport network while the balance are understood to carry very low traffic volumes; and >> registered airports whose operators are not AAA members are also understood to carry very low traffic volumes. The breadth of the AAA’s membership within the Australian airport industry means that it is an invaluable resource for all Governments and government agencies with a need to consult within the industry to ensure that their policy and operation decisions are well informed and do not have unintended or unexpected adverse consequences.
REGIONAL AIRPORTS A QUESTION OF DEFINITION A threshold question for any review of regional airports is – what airports are “regional”?
Different industries adopt different definitions of this and related terms – for example, in telecommunications, “regional” is generally used in contradistinction to “rural” and “remote”. And the Australian Standard Geographical Classification Remoteness Structure from the Australian Bureau of Statistics recognises “major cities”, “inner regional Australia”, “outer regional Australia”, “remote Australia” and “very remote Australia”, with the “major cities” category accounting for 23 airports as diverse as Brisbane and Rose Bay. In this paper the term “regional” is used to cover essentially all Australian airports other than the principal airports of the State and Territory capitals. That is, Archerfield, Bankstown and Parafield for example can in many respects be as “regional” as Aurukun, Birdsville and Port Lincoln. At times, the paper also refers to “rural” and “remote” airports to indicate sub-categories of the broader genus of “regional” airports.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
27
AVIATION ACTIVITY AT AUSTRALIA’S REGIONAL AIRPORTS. For most Australians, their contact with an Australian airport is associated with work or leisure travel on a scheduled RPT flight between one of the major capital city airports and either an overseas destination, another capital city airport or, perhaps, a major Australian tourist destination such as the Gold Coast. But while such travel is statistically predominant, there are numerous other forms of aviation activity at Australian airports that are of vital importance to the Australian community and economy. It is common for aviation observers to categorise aviation activity along such lines as “RPT”, “charter”, “GA” and “sport/recreation”. While these terms are commonly used, they are not always helpful. The term “GA”, in particular, fails to convey the great breadth of activity and community service that Australia’s aviation industry delivers. The following indicates how diverse aviation activities at regional airports can be: >> RPT, charter and private flights from Australia’s regional, rural and remote airports allow those who work and live outside the major cities to access the specialist health, education, commercial and recreational facilities that are not economically available where they normally reside, allow travel by health professionals to the regional community, and enable regional residents to maintain and enjoy the pleasure of their relationships with distant families and friends. >> RPT and charter flights allow the more efficient development of Australia’s natural resources, weekly bringing many thousands of “fly-in, fly-out” (FIFO) workers to distant mines and development sites from both capital cities and other regional centres. In 2011, approximately half of the 90,000 people employed in the Western Australian mining industry participated in FIFO arrangements, where they live in a city and fly in to a remote workplace during their work roster. It is not only the airports owned and operated by resources companies that facilitate Australia’s participation in the world trade in minerals, but also general purpose airports such as those at Karratha in Western Australia and Emerald in Queensland. >> Regional air services support the attraction of staff to, and their retention in, regional and remote communities by minimising the isolation that can be involved in working away from family and friends.
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> Charter flights by large long-distance aircraft bring significant numbers of overseas visitors to Australia’s major leisure destinations, adding to the growth of a tourism industry already supported through domestic and international RPT flights. >> Charter and private flights on smaller aircraft allow the business and leisure travel of Australians to and from smaller airports where it is not economical for commercial airlines to operate RPT services. >> Air services keep Australians in touch with one another and the world, because they are frequently used to deliver the mail and our daily newspapers. >> While they may no longer be defence bases, very many regional airports support Australia’s defence force activity – in the 12 month period June 2011 to May 2012 there were at least 7000 arrivals or departures by Australian Defence Force aircraft at at least 103 civilian Australian airports. >> Particularly in regional Australia, airports play an essential role in saving lives by facilitating medical evacuations, collection and delivery of organ donations and search and rescue. –– For example the Royal Flying Doctor Service (RFDS) is a non-for-profit organisation which offers health care to those people who are unable to access a hospital or basic general practices due to their extreme geographic isolation. Currently, the RFDS has over 60 aircraft, operating out of 23 bases in all States and the Northern Territory. The RFDS predicates its operations on the availability of airport or airstrip networks in outback locations throughout Australia. In 2011, the RFDS undertook nearly 76,000 flights, taking over 80,000 hours and spanning a distance of close to 27 million kilometres. These services have become of even higher importance in light of the growing number of mining workers residing in rural parts of Queensland and Western Australia. >> Law enforcement bodies, such as the Western Australia Police Air Support, and border protection agencies operate out of Australia’s regional airports, particularly in Northern and Western Australia. >> Australia’s regional airports also play a vital role in protecting Australia’s physical assets – enabling firefighting in areas where road transport is impossible or would be too late.
>> Australia’s vegetable and animal produce is significantly enhanced by aerial agriculture services like crop dusting and mustering operated from regional airports. >> Freight services to and from airports allow many businesses to operate “just-in-time” inventories and access markets for often high-value or time-sensitive products. >> Australia’s regional airports offer facilities for pilot training both for those who wish to fly privately and for those who wish to earn their living flying commercially in Australia or overseas. A number of regional airports provide flexible training facilities that do not conflict with the flight paths of capital city airports, while minimising the noise impacts in densely populated areas. For example: –– Tamworth Regional Airport is host to BAE Systems Flight Training Australia, which conducts flight screening and the first stage of flight training for all Australian Defence Force pilots. It also has flight screening contracts with the Republic of Singapore Airforce and the Royal Brunei Airports, under which it provides facilities and aircraft, and it hosts training courses in aircraft mechanics and engineering through the Australasian Pacific Aeronautical College. –– The Australian Airline Pilot Academy at Wagga Wagga Airport provides a 32 week full-time course for ab-initio trainee pilots to meet the current and future demand for Regional Express pilots, as well as development courses for current Rex pilots, and in 2011 AAPA commenced training international students, offering Multi Crew Pilot Licence (MCPL) training for UAE trainee pilots. AAPA’s training programme is residential, with world class equipment and facilities, and boasts a fleet of 20 new Piper aircraft and 3 flight simulators. The total capital outlay on these facilities over 2009-2014 is expected to exceed $25 million, representing a significant investment in the regional economy.
–– Jandakot Airport, where almost 70% of total aircraft movements are flying training, is the training base for pilots for a number of international airlines and training schools including the Royal Aero Club (Inc), China Southern West Australian Flying College and Singapore Flying College. >> Regional airports may be designated for diversion of domestic or international flights when their capital city destination becomes unavailable for reasons such as the onset of severe weather – for example Rockhampton Airport in Central Queensland has the capacity to handle international passenger and airfreight operations by Boeing 747 aircraft. >> Regional airports may also provide a resource to enable airlines to support their national route operations – for example, Tamworth Regional Airport is home to QantasLink’s heavy maintenance base for Dash-8 aircraft. >> Aerial survey and aerial photography activity often requires access to regional airports. >> Australian airports generally, and not just those owned or operated by aero clubs, allow many thousands of Australians to enjoy the pleasures of sport and recreational flying. The exact mix of these diverse aviation activities at each Australian airport varies to meet the needs of the particular community which the airport exists to serve.
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OTHER ACTIVITIES AT REGIONAL AIRPORTS Airports are not passive assets but must be actively and expertly managed and operated. In order to allow core aviation activities to occur at any airport, a range of aeronautical-related facilities and support services may be required: >> Airport runways and taxiways need to be not only established and kept free of debris but also maintained to the requisite standard – and, if traffic grows, these may need to be enlarged, strengthened or replaced, particularly where heavier aircraft seek to use the airport; >> Wildlife incursions into aircraft operational areas need to be managed in an environmentally sensitive manner; >> Airport lighting and other aids to navigation need to be operated and maintained to ensure safe air navigation; >> Airport rescue and fire-fighting services may be mandatorily required and an Airport Emergency Plan is required for all certified airports; >> A statutory Drug and Alcohol Management Plan must be developed and implemented in respect of safety sensitive airport personnel at certified and registered airports;
>> Airport security such as passenger and checked bag screening may be required by law, or simply demanded by aircraft operators concerned to protect their aircraft on the ground; >> Passenger facilities for check-in, awaiting departure and baggage collection on arrival must be provided; >> Car-parking areas need to be provided and maintained; >> Facilities may be required to be provided for regulatory and community services such as Police, Customs, Quarantine, Immigration, CASA and Airservices Australia; >> Facilities for refuelling aircraft may be required; >> On-airport aviation-related businesses separate from the airport operator, such as those providing aircraft maintenance and repairs, may require either site leases to construct their own premises or the provision of airport-owned buildings and other facilities. Additionally, and increasingly, passengers expect airports to ensure that a range of other nonaeronautical facilities and services are available to facilitate or enhance their travel experience, including: >> Cafes, bars and other retail facilities; >> Luggage trolleys; or >> Taxi, shuttle, limousine and car hire services. And increasingly, in order to generate the financial resource necessary to keep their aviation facilities at a level that meets the demands of their community, airports find that maintenance of their aeronautical assets requires them to diversify their activities into other non-aeronautical businesses, such as business parks providing on-airport commercial, retail and industrial accommodation for non-core aviation businesses. Exactly who provides all of these diverse services and facilities at an individual airport depends upon a mix of regulatory and commercial factors. For example, at some airports, the airport operator provides and operates all passenger facilities; at others, the airport operator may provide passenger facilities that are staffed by airline personnel; and in some cases an airline may construct and operate passenger facilities under a site lease of land from the airport owner.
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
RUNNING A REGIONAL AIRPORT As noted before, airports are not passive assets but must be actively and expertly managed and operated. They are also extremely expensive to construct and maintain - this is particularly the case in remote locations. This means that running a regional airport is demanding, both from a commercial perspective and from a technical perspective.
Skills Shortly stated, running an airport (no matter how small) requires significant skills and relatively significant amounts of money. Some of the required skills are common to many other businesses – general administration skills, project planning and management skills, negotiation skills, etc. – but even so these skills need to be exercised in the particular aviation context. This requires a sound understanding of the dynamics of a complex industry with numerous and markedly different sub-markets. In addition to the need for commercial expertise in managing capital and operational expenditure, airport management needs high levels of airport specific technical skill – not just to operate the airport’s physical assets but to meet the diverse requirements of the many government agencies that regulate airport activity. Airports require skilled staff such as reporting officers, works safety officers and aircraft guidance, lighting maintenance, wildlife management and pavement repair staff. Staff with these airport-specific skills are often hard to recruit, train and retain – especially in regional airports. And airport safety, security and environmental regulation is inherently complicated and requires high levels of knowledge and skill in applying complex laws in the context of the individual airport.
Moreover, because activity levels at regional airports are often at relatively low levels, airports generally have to seek staff who are each skilled in multiple disciplines. Indeed, at many regional airports, staff are assigned to duties not only at the airport but also at other local government facilities, thus increasing the technical demands they each bear.
Money The cost of just keeping an established airport “ticking over” is not inconsiderable, especially when viewed in the context of a local government budget. Simply staffing a basic GA airport with no RPT services and with no pressing maintenance issues (like periodic tarmac overlays) can readily run to $250,000 per annum (and even that may not be a full accrual cost that takes account of all the synergies and interdependencies that can occur in an organisational environment where the airport may receive some services from other council departments like cleaning). And if that basic GA airport were to be upgraded so that it was capable of receiving Dash 8 RPT services or similar, the new 1600m x 30m runway alone could readily cost $20+million if the airport were reasonably close to a capital city – but, if the airport were in remote Australia, this figure could easily rise by 1.5 to 3.5 times. Indeed, for regional airports, the tyranny of distance compounds not only costs but also the complexity of project implementation. Needing to undertake engineering works at an airport is one thing, but finding a company with the requisite capability is another. For example: >> There are no asphalt batching plants available outside Perth, so the cost of mobilising a skilled workforce could be in excess of $100k before works commence; >> Bitumen crews are often only available as they pass through a series of regional towns and thus co-ordination between those crews and other local companies involved in the works is critical and does not always align;
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>> Moreover a premium is always paid - conducting any works above the 26th Parallel comes with a significant increase in costs. In the Pilbara this can be in the order of up to 50% and in the Kimberley 30%+; >> Staffing is also a key issue. Overlays and works on runways do not happen often at regional airports compared to capital city airport. In the local government environment the local engineer is often assigned this function but is unlikely to have exposure to airfield operations and the differences in such things as spray rates. A runway is not a road. It has specific needs and outcomes related to aircraft safety that may not be understood; >> And finally, the risk of bitumen being transported 2,500km is also problematic in that it can deteriorate over these distances. Airports are designed and constructed to meet the future use to which they are expected to be put. The high cost of acquiring land and building runways, taxiways and other infrastructure necessarily dictates that great care must be taken in predicting future operational requirements so that what are generally public funds are not “sunk” in assets that may not be required. Predicting future use is inherently difficult and uncertain, because aviation is so strongly influenced by general economic conditions and often unforeseen events such as the discovery of nearby mineral resources. Airport users almost always do not commit to particular activity levels – particularly at regional airports. An airline may decide to initiate a new route to a regional airport that will require airport facilities to be upgraded at considerable expense in order to accommodate the aircraft size proposed to be used, but will not guarantee to continue to operate that aircraft or even that route. Moreover, while airport users generally accept that they need to pay airport fees that reflect the airport’s capital investment, an airline’s own commercial imperatives generally necessitate that they insist that capital costs be recovered over an extended period commensurate with the life of the asset. This means that airport assets can become “stranded” long before their cost has been recovered.
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
These commercial decisions confronting a regional airport are not only complex but also vitally important to the local community. If the airport operator is not prepared to take the inherent risks involved, the local community may be left without RPT services that might power its broader economic development from tourism, resources development or other industries. Coping with increased traffic brings additional management and financial demands. For example: >> Newman Airport, owned and operated by the Shire of East Pilbara has experienced a 35% increase in its RPT schedule in recent months, with services now operated by Qantas, QantasLink, Virgin and Skywest, and also has Alliance, Network, Skippers and Karratha Flying Services operating scheduled closed charter services. As a result it has been required to introduce a slot booking system to reduced congestion on its RPT apron and in its terminal (on which it spent $7.6 million in 2009). Indeed, the Shire has spent over $28 million on capital works at the airport since 2008. >> Dubbo Airport, where RPT passenger numbers grew by a more modest 13.5% over the five years 2005/6 to 2010/11 has had to spend over $9 million on capital works since 2000/01 and has a further $14 million or so forecast for the 2012/13 to 2021/22 period, including over $1 million on security alone.
REGULATION OF AUSTRALIAN AIRPORTS Australian airports are subject to a particularly high level of government regulation across a diverse range of fields and by a diverse range of regulators. Some of these are common to all Australian commercial businesses, such as: >> The Corporations Law, administered by the Australian Securities and Investments Commission; >> Trade practices and consumer protection laws, administered by the Australian Competition and Consumer Commission and State and Territory Offices of Fair Trading; >> Occupational Health and Safety laws, administered by various Commonwealth, State and Territory regulators; >> Workplace relations laws, administered by various Commonwealth, State and Territory regulators; and >> Disability discrimination laws.
And, even in areas where there is a national regulatory regime, the requirements of that regime may be quite “granular” so that airports with different characteristics are subject to markedly different regulatory requirements. This means that, as an airport evolves (or is forced to evolve) over time, the regulatory impact on it may become heightened even though the change in airport operations may be comparatively minor. Ascertaining precisely what laws apply to a particular airport can also be a complex matter. For example, the “privatised airports” remain owned by the Commonwealth and thus the Commonwealth Places (Application of Laws) Act 1970 is instrumental in determining whether and to what extent local laws apply to a privatised airport in a particular State. While that Act sets out the general proposition that “the provisions of the laws of a State … apply … in accordance with their tenor… in relation to each place in that State that is … a Commonwealth place …”, that proposition is subject to a number of important qualifications that can make its precise application difficult. The following sets out a brief overview of how various regulators impact on airports.
But there are significant other regulatory regimes that are particular to airports – the most obvious of course is air safety, but there is also a variety of other airport-specific areas of commercial and technical regulation that impact on the airport operator. Significantly, in many of these areas of regulation, there is no national standard or common practice and procedure across Australia. Accordingly, on some matters like planning and development, an airport in one location may be subject to markedly different regulation to an airport in another location, notwithstanding that their operational characteristics may be identical.
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Civil Aviation Safety Authority CASA is the Commonwealth regulator with primary (but not exclusive) responsibility for aviation safety, including for the operation of airports. It categorises airports by reference to the passenger carrying capacity of aircraft that use them: >> A certified airport is one which a) has a runway that is suitable for use by aircraft having: (i) a maximum passenger seating capacity of more than 30 seats; or (ii) a maximum carrying capacity of more than 3400 kilograms; and (b) is available for use in regular public transport operations or charter operations by such aircraft. >> An airport that does not meet those requirements may apply to be registered by CASA if it has been inspected by a person approved by CASA and found to meet certain prescribed requirements, which include various of the requirements that must be met by certified airports. >> Other requirements apply to an airport that is not a certified or registered airport but is used at least once a week by an aircraft that is engaged in regular public transport operations or charter operations and has a maximum passenger seating capacity of more than 9 seats but not more than 30 seats. >> And finally other requirements apply to an airport when used at least once a week by an aircraft that is engaged in regular public transport operations or charter operations with a maximum take-off weight (MTOW) not exceeding 8618 kg, and fitted with a passenger seat configuration of not more than 9.
Where an Aerodrome Manual is required, it must cover such matters as:
Depending upon which category an airport falls into, it will be subject to differing regulatory requirements. For example:
Most significantly, CASA is authorised to determine a Manual of Standards (MOS) that sets out very detailed standards that airports must comply with in relation to the operation of their airports. CASA periodically audits the compliance by airports with the MOS and other regularity requirements, and can initiate legal action where required.
>> A certified airport is required to have an Aerodrome Manual, a Safety Management System, and an Aerodrome Technical Inspection but other categories are not; >> A registered airport and an airport in the third category above is required to have an Aerodrome Safety Inspection, but an airport in the fourth category is not; >> Airports in the first three categories must have a trained Reporting Officer, but not those in the fourth category; >> Details of certified and registered airports must be published in the Airservices Australia En Route Supplement Australia (ERSA) and Notice To Airman (NOTAM) publications, but not those for the other two categories; 34
>> At certified and registered airports, monitoring of obstacles is the responsibility of the airport operator while at other airports this is the responsibility of the aircraft operator; and >> Precision instrument approaches are available at certified and registered airports but not at others.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> >> >> >> >> >> >> >> >> >> >> >> >> >> >>
The airport’s Aerodrome Emergency Plan; Aerodrome lighting; Aerodrome Reporting; Unauthorised entry to the airport; Aerodrome serviceability inspections; Aerodrome technical inspections; Aerodrome works safety; Aircraft parking control; Airside vehicle control; Bird and animal hazard control; Obstacle control; Disabled aircraft removal; Handling of hazardous materials; Protection of radar and navigational aids; and Low visibility operations.
Certified and registered airports are also required to have a Drug and Alcohol Management Plan (DAMP) and to apply it in respect of any of their employees who undertake specified “safety sensitive aviation activities”, but operators of other airports are not.
As will be apparent from the above brief description, whenever an airline proposes to change the nature of the air services it provides to and from a particular airport, this has the potential to change the CASA categorisation of the airport and move it into a more tightly regulated category. There may be considerable expense and effort required for an airport to meet the increased regulatory burden so that it can agree to meet the airline’s proposal, and yet the airline will generally not be prepared to undertake to maintain the new air services that necessitate that expense and effort on an ongoing basis.
Office of Airspace Regulation The Office of Airspace Regulation (OAR) is a distinct operational unit within CASA and is responsible for regulating Australian airspace. In line with the International Civil Aviation Organization (ICAO) Annex 11 and as described in the Australian Airspace Policy Statement (AAPS), Australian airspace is classified as Class A, C, D, E and G depending on the level of service required to manage traffic safely and efficiently. Class B and F are not currently used in Australia. The classification determines the category of flights permitted and the level of air traffic services (ATS) that must be provided. Within this classification system, airspace and aerodromes are either controlled (i.e. Class A, Class C, Class D or Class E) or non-controlled. Non-controlled aerodromes in Australia are subject to Common Traffic Advisory Frequency (CTAF) procedures. Pilots of aircraft operating at all registered, certified, Military and CASA designated aerodromes are required to carry and use a Very High Frequency (VHF) radio.
Airservices Australia and the Aircraft Noise Ombudsman Airservices Australia administers the use by aircraft of airspace classified by OAR. Airservices has approximately 950 air traffic controllers, working from two major centres in Melbourne and Brisbane and 28 towers at international and regional airports. It has responsibility for: >> >> >> >> >>
The operation of particular aircraft or take-off or landing paths at a particular aerodrome on occasions provokes complaints about associated noise. While these are often directed to or against the airport operator, noise is seldom generated by or subject to the control of the airport operator. The Government has established an Aircraft Noise Ombudsman (ANO) to: >> Oversee the handling of aircraft noise enquiries and complaints; >> Conduct independent reviews of noise complaints handling; and >> Make recommendations for improvements where necessary. While the ANO is independent of Airservices Australia’s executive management structures, it reports directly to its board on performance in regard to aircraft noise management matters. The ANO conducts independent administrative reviews of Airservices Australia and how it handles aircraft noiserelated activities, such as the handling of complaints/ enquiries, community consultation processes, and the presentation and distribution of aircraft noise-related information. Arising out of their various activities, OAR, Airservices and the ANO can fundamentally affect the aircraft that can operate to and from any Australian airport, and the manner in which they do so.
Airspace management Aeronautical information Aviation communications Radio navigation aids Aviation rescue and fire fighting services.
Airservices and OAR continually monitor the aircraft movements and passenger numbers at 1,575 aerodromes in Australia and OAR conducts Aeronautical Studies to determine the appropriateness of the surrounding airspace classification and whether or not there is a need for re-assessment of the risk at a particular airport.
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Office of Transport Security The Office of Transport Security (OTS) within the Department of Infrastructure and Transport is the Australian Government’s preventive security regulator for the aviation and maritime sectors. The Aviation Transport Security Act 2004 and Aviation Transport Security Regulations 2005 require aviation industry participants to operate an approved Transport Security Program. The Act allows the Secretary to designate airports as security controlled airports, to assign categories to them, and to establish airside and landside areas, security zones and event zones for those airports. Once established, the areas and zones are subject to requirements directed at safeguarding against unlawful interference with aviation and the airport operator is required to have and comply with a Transport Security Program approved by the Secretary of the Department. The categorisation of the security controlled airport dictates the nature of the security measures that must be implemented at it. A transport security program for an aviation industry participant must demonstrate that the participant: (a) Is aware of the participant’s general responsibility to contribute to the maintenance of aviation security; (b) Has developed an integrated, responsible and proactive approach to managing aviation security; (c) Is aware of, and has the capacity to meet, the specific obligations imposed on the participant under this Act; and (d) Has taken into account relevant features of the participant’s operation in developing activities and strategies for managing aviation security. A transport security program for an aviation industry participant must set out the following: (a) How the participant will manage and co-ordinate aviation security activities within the participant’s operation; (b) How the participant will co-ordinate the management of aviation security with other parties (including Commonwealth agencies) who have responsibilities for, or are connected with, aviation;
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
(c) The technology, equipment and procedures to be used by the participant to maintain aviation security; (d) How the participant will respond to aviation security incidents; (e) The practices and procedures to be used by the participant to protect security compliance information; (f) The other aviation industry participants who are covered by, or operating under, the program; and (g) The consultation that was undertaken, in preparing the program, by the participant with the other aviation industry participants who are covered by, or operating under, the program. The designation and categorisation of an airport under the Act, and the nature of the aviation services undertaken by aircraft operators and air cargo agents at the airport dictate the nature of the particular security measures that must be put in place at the airport. Preparing a transport security plan and installing and operating security equipment and procedures is inherently challenging and expensive. Again it is the case that, whenever an airline proposes to change the nature of the air services it provides to and from a particular airport, this has the potential to change the security designation/ categorisation of the airport and move it into a more tightly regulated situation. There may be considerable expense and effort required for an airport to meet the increased regulatory burden so that it can agree to meet the airline’s proposal, and yet the airline will generally not be prepared to undertake to maintain the new air services that necessitate that expense and effort on an ongoing basis.
Australian Transport Safety Bureau
Quarantine
The Australian Transport Safety Bureau (ATSB) is responsible for the independent investigation of accidents and incidents involving civil aircraft in Australia. The ATSB’s primary focus for its investigations is fare-paying passenger operations. However, all accidents and incidents related to flight safety in Australia or involving Australian registered aircraft overseas must be reported to the ATSB. While the ATSB does not investigate all of these, it still needs to be notified so that the data can be recorded for possible future safety research and analysis.
The Australian Quarantine and Inspection Service (AQIS)/DAFF Biosecurity manages quarantine controls at Australia’s borders to minimise the risk of exotic pests and diseases entering the country. AQIS also provides import and export inspection and certification to help retain Australia’s highly favourable animal, plant and human health status and wide access to overseas export markets.
It is not a function of the ATSB to apportion blame or provide a means for determining liability and the ATSB does not investigate for the purpose of taking administrative, regulatory or criminal action. Nevertheless, the outcome of its investigations may have significant implications for an airport operator where an accident or investigation has involved aviation activity to, from or at its airport.
Within Australia, State Quarantine authorities control the internal movement of plants or plant products, animals or animal products, soil, agricultural machinery and other equipment, and recreational equipment. Quarantine regulation necessarily affects the nature of the air services that may be provided from and to an airport, and thereby the extent to which access and facilities for quarantine inspection may need to be made available to quarantine authorities by the airport operator.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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Customs
Economic Regulation
Where an airline wishes to operate international services to or from an airport, either as RPT, charter or freight and whether or not as a principal port of departure and arrival or as an alternative port for limited use only when the principal port is unavailable, the Australian Customs and Border Protection Service must be able to undertake its functions at the airport.
The Airports Act 1996 contains a range of airport-specific measures by which the prices charged and services offered by the “privatised” airports can be very closely regulated.
Indeed, section 19 of the Customs Act 1901 specifically provides that: Every wharf-owner and airport owner shall provide to the satisfaction of the Collector suitable office accommodation on his or her wharf or at his or her airport for the exclusive use of the officer employed at the wharf or airport also such shed accommodation for the protection of goods as the CEO may in writing declare to be requisite. Penalty: 1 penalty unit.
Immigration Similarly where an airline wishes to operate international passenger services to or from an airport, either as a principal port of departure and arrival or as an alternative port for limited use only when the principal port is unavailable, the Department of Immigration and Citizenship must be able to undertake its functions at the airport.
AFP and State/Territory Police An airport may be required in a number of ways to provide facilities to the Australian Federal Police or to State or Territory Police in order to ensure the safety of operations, generally by parties other than the operator themselves, at the airport.
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These measures are not applicable to other airports, even though they may be operationally very similar, and State legislation generally does not contain any comparable measures. The Airports Act economic regulation measures have, over time, been “fine-tuned” in their application amongst “privatised” airports, and the present and so-called “light-handed” regime is now much more granular as between the various and very different airports. Nevertheless, regional airports such as Archerfield and Jandakot must live with a risk of reregulation that does not apply at other airports that are operationally much the same.
Development Planning and Control In the area of development planning and control, there is another marked diversity in the regulatory regimes to which airport operators are subject. The Commonwealth-owned “privatised airports” are not subject to the town planning regime of the State or Territory in which they are located but instead are subject to an airport-specific regulatory regime under the Commonwealth’s Airports Act. Civilian airports operated on Defence airports are subject to quite different planning and development controls established under the sub-leases through which they gain the right to operate Commonwealthowned Defence land. A few airports that have been “privatised” by their State Government owner, such as Cairns Airport, operate under an airport-specific planning and development regime such as the Airports Assets (Restructuring and Disposal) Act 2008 (Qld) that may bear some similarity to that under the Commonwealth’s Airports Act, but may also be quite different in many respects.
But by far the majority of Australia’s airports operate under State, Territory and local government planning regimes that differ from jurisdiction to jurisdiction. As a result, the regulatory burden to which a particular airport is subject in one location may be markedly different from that applicable to an airport in another location that nevertheless shares identical operational characteristics. This can be a significant issue for an airport competing with other airports to attract aviation or non-aviation tenants.
Environmental Control Aviation operations at airports necessarily have environmental implications – whether by way of noise –generation, the storage and handling of materials such as aviation fuel, or the construction of airport infrastructure. Except in the latter case, the party generating the activity in question is generally not the airport operator. Environmental regulation may be at the Commonwealth, State or Territory, or local government level. It is possible that the same activity or development may be subject to different and even inconsistent regulation depending on the location of the airport at which it is to be undertaken.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
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TRAFFIC AT REGIONAL AIRPORTS There is no data collection that comprehensively covers all traffic at Australian airports. Not surprisingly, quite detailed data on RPT traffic is quite readily available. But data for charter traffic and all the various forms of general aviation (GA) and sport aviation traffic is not available in anywhere near the same detail. Nevertheless, the available data does allow some insight into traffic at Australia’s regional airports. The Commonwealth Minister for Infrastructure and Transport announced on 19 March 2012 that: Australia’s regional airports have seen strong growth over the past few years with total passenger movements at airports in regional areas growing at a faster rate than airports in major cities. A new BITRE report has found that passenger numbers at regional airports increased from nearly 17 million to over 22 million between 2005 and 2010. Most of the growth was from the increase of passengers travelling on regional air routes between major cities and regional areas, which make up more than 90 per cent of the regional aviation market. …. Strong regional aviation is not just important for regional communities but is also good for Australia. Given this undoubtedly good news, it would be easy to assume that all regional airports must be doing well. But such an assumption would be unfounded for a number of reasons: >> The BITRE report referred to by the Minister deals only with regular scheduled air services – in 2010 only 148 airports were served by such services – down from more than 270 in 1984 and 169 as recently as 2005; >> The report therefore does not provide any indication of the health or otherwise of the remaining regional airports that were not served by regular scheduled airports;
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AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> Similarly the report says nothing about trends in other aviation categories, such as GA, recreational or charter, at any airport; and >> The report does not disclose the spread of regular scheduled air services across airports and thus does not indicate whether the principal beneficiaries of growth have been the relatively few fly-in/fly-out and leisure ports, leaving the balance languishing with negative, no or low growth. What it makes clear, however, is that the growth in traffic to and from regional airports is almost entirely to and from major city airports, and not in traffic between regional airports. Having drawn attention to these limitations of the BITRE report, it is important to stress that it is nevertheless a very useful document. Within the limited but very important category of regular scheduled air services, it helps to demonstrate the volatile environment for regional airports and the communities they serve. For example: >> RPT services ceased at 44 airports between 2005 and 2010, and commenced at only 24 airports in that period; >> The number of airlines serving regional airports fell from 33 (serving 169 regional airports) in 2005 to 28 (serving 148 regional airports) in 2010 - this compares to more than 50 airlines in 1984 and around 57 in 1993; >> Of those 28, only 20 had continued to operate since 2005 while 8 had either resumed or commenced services since 2005; >> In the period 2005 to 2010, 128 regional airports recorded regular scheduled air services in both years, 41 recorded services in 2005 but not in 2010, and 21 recorded services in 2010 but not in 2005; >> Throughout the period 2005 to 2010 between 60 and 70 per cent of regional airports were served by only a single airline;
>> The use of smaller aircraft on regional routes (less than 18 seats and 18-29 seats) has trended heavily downwards over time, while the use of aircraft with 30-100 seats has trended significantly upwards and the use of ever larger aircraft with 100+ seats has risen and fallen relatively erratically. Similarly, the trend has been towards use of aircraft with higher maximum take-off weight (MTOW). These overall trends to using heavier, larger capacity aircraft on regional routes have significant implications for regional airport capital expenditure on airside pavements, terminals and security equipment, and lack of consistency in the ongoing use of such aircraft at any one location can render sunk costs irrecoverable.
Other BITRE data does however provide a graphic illustration of how volatile RPT traffic is when viewed airport-by-airport. For the same period 2005 to 2006 where on an Australian average basis there was an average annual rate of growth of 6% across all regional airports, the following individual regional airports showed exceptionally diverse growth or decline patterns in their RPT traffic:
Airport
RPT Revenue Passengers 2005-06
RPT Revenue Passengers 2010-11
% change 2010-11/2005-06
Albany
49824
56002
+12.4
Albury
198020
284535
+43.7
Alice Springs
605073
640519
+5.9
Armidale
100984
104888
+3.9
Ayers Rock
377812
309089
-18.2
Ballina
269886
291322
+7.9
Bamaga
0
14395
Bathurst
21137
26815
0
24076
8177
20025
+144.9
43631
63098
+44.61
302061
239239
-20.8
Bundaberg
98276
132731
+35.1
Burnie
93381
70402
-24.6
Cairns
3731178
3859339
+3.4
Carnarvon
18670
26735
+43.2
Ceduna
17287
24962
+44.4
Charleville
9851
14999
+52.3
Christmas Island
8093
27286
+237.2
Cloncurry
3714
17675
+375.9
Cocos Island
5632
15712
+178.9
322206
341116
+5.9
8465
10995
+29.9
Bathurst Island Biloela Broken Hill Broome
Coffs harbour Coober Pedy
+26.7
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
41
Airport
RPT Revenue Passengers 2005-06
RPT Revenue Passengers 2010-11
% change 2010-11/2005-06
15872
11388
-41.5
1610
40700
+1528.9
Devonport
92805
139019
+49.8
Doomadgee
3176
7154
+125.3
155805
176821
+13.5
8720
8212
-5.9
Emerald
78651
166785
+110.9
Esperance
37100
46590
+25.6
Essendon
6883
20539
+198.4
Flinders Island
17834
19050
+6.8
Geraldton
88610
104051
+17.4
Gladstone
159950
240275
+50.2
Gold Coast
3304526
4707783
+42.7
105198
108067
+2.7
Grafton
6250
18810
+200.9
Griffith
60066
69266
+15.3
Groote Eylandt
22342
33861
+51.6
3347
7317
+118.6
Hamilton Island
432051
457641
+5.9
Hervey Bay
140863
158590
+12.6
Kalgoorlie
192891
259958
+34.8
Karratha
261825
675207
+157.9
King Island
28098
31087
+10.6
Kingscote
60252
51021
-15.3
Kununurra
50901
86955
+70.8
Launceston
925637
1156356
+24.9
Learmonth
30292
55759
+84.1
Leonora
4649
20817
+347.8
Lismore
66880
49365
-26.2
Longreach
18078
32630
+80.5
Lord Howe Island
30736
31569
+2.7
660632
1049172
+58.9
Maningrida
22313
14148
-36.7
Merimbula
57732
51299
-11.2
154654
207422
+34.1
Moorabbin
8849
9766
+10.4
Moranbah
8549
41488
+385.3
20959
32233
+53.8
5840
10473
+79.3
16759
20301
+1.1
Cooktown Derby-Curtin
Dubbo Elcho Island
Gove
Hamilton
Mackay
Mildura
Moree Mornington Island Moruya
42
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
Airport
RPT Revenue Passengers 2005-06
RPT Revenue Passengers 2010-11
0
14256
Mount Gambier
102121
92261
-9.7
Mount Isa
132475
217525
+64.2
Mudgee
4391
10126
+130.6
Narrabri
11949
15318
+28.2
Narrandera
16235
12315
-24.1
100516
221104
+119.9
Norfolk Island
42957
47627
+10.9
Olympic Dam
37112
72215
+94.6
Orange
56576
59840
+5.8
Palm Island
40151
27514
-31.5
Paraburdoo
87798
204671
+133.7
Parkes
28660
32311
+12.7
Port Augusta
3953
11290
+185.6
Port Hedland
110516
363165
+228.6
Port Lincoln
138547
199546
+44.0
Port Macquarie
108969
137534
+100.9
13856
12697
-8.3
Proserpine
222592
205436
-7.7
Rockhampton
588028
719805
+22.4
16247
59524
+266.4
786178
914175
+16.3
92634
153680
+65.9
9056
19250
+112.6
49923
90902
+81.5
1161290
1622242
+39.7
171677
213923
+24.6
Weipa
45059
58888
+30.7
Whyalla
64546
66539
+3.1
786651
1211302
+48.3
Mount Cavenagh
Newman
Portland
Roma Sunshine Coast Tamworth Taree Thursday Island Townsville Wagga Wagga
Williamtown
% change 2010-11/2005-06
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
43
The volatility and contrast that these figures disclose is remarkable: >> There are extreme differences between RPT traffic volumes airport-by-airport – from just a few thousand a year to the millions; >> There are extreme differences in percentage changes from 2005-06 to 2010-11; >> There are a significant number of airports showing a negative change; and >> The locations in which more significant changes occurred, and the apparent significance of FIFO operations, are very significant. Beyond that, care should be taken in seeking to interpret these statistics. They are merely a snapshot of two years and cannot be viewed as indicative of consistent trends – for example, Doomadgee and Mornington Island, which respectively record percentage changes of 125.3% and 79.3% when 201011 is compared to 2005-06, registered no RPT traffic at all in 2009/10. Moreover RPT traffic is itself only one indicator of aviation activity at an airport – low RPT traffic may not be of concern to a local community where charter and GA activity meets its needs.
Active aircraft
Hours flown
NSW
2620
382,000
Vic
1928
257,100
Qld
2506
492,100
WA
1501
393,700
SA
640
117,800
Tas
176
26,100
NT
490
164,600
ACT
118
14,400
>> Regional airline activity in 2010 was geographically distributed as follows: Active aircraft
Hours flown
NSW
75
117,800
Airport-by airport data is unfortunately not available for non-RPT air traffic. However, the following figures clearly demonstrate the significance of charter/GA and sport aviation which predominantly operate from Australia’s regional airports rather than from the capital city airports:
Vic
6
5,300
Qld
56
60,800
WA
46
21,000
SA
7
3,800
Tas
7
2,800
>> While RPT transport recorded 1,338,000 hours flown in 2010 (including the international operations of Australia’s major airlines), General Aviation recorded 1,848,000 hours and Sport Aviation 513,000 hours.
NT
35
11,100
ACT
6
5.400
>> The 1,848,000 hours in the GA industry sector in 2010 were flown by 9,979 active aircraft and comprised: –– Charter – 507,300 hours –– Training – 436,300 hours –– Aerial work – 400,300 hours –– Private – 241,900 hours –– Business – 140,000 hours –– Agriculture – 103,800 hours –– Test & ferry – 18,200 hours
44
>> The 513,000 hours flown in the Sport Aviation sector comprised: –– Gliding – 228,700 hours –– Ultralight flying – 141,900 hours –– Hang gliding – 97,900 hours –– Gyroplanes – 44,400 hours >> GA activity in 2010 was distributed geographically as follows:
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> Aircraft based in Australia in GA and Regional Airline operations in 2010 comprised: –– Fixed wing, single engine - 8,486 –– Fixed wing, multi-engine - 1,932 –– Rotary wing - 1,800 –– Balloons and airships - 346 >> By comparison, major Australian RPT fleets in 2010 comprised 307 aircraft >> Of the 56 busiest City-Pair routes in Australia in the year ending April 2012, only 19 were Capital City/Capital City routes – 37 were either Capital City/Regional or Regional/Regional routes as highlighted below:
Passengers carried (000s) — annual activity
Passengers carried (000s) — annual activity
City-Pair
YE Apr 2011
YE Apr 2012
% Change
City-Pair
1 Melbourne Sydney
7 925.4
7 692.7
-2.9
2 Brisbane Sydney
4 405.6
4 381.0
3 Brisbane Melbourne
3 081.8
4 Gold Coast Sydney
YE Apr 2011
YE Apr 2012
% Change
21 Brisbane Rockhampton
605.4
652.1
7.7
-0.6
22 Brisbane Canberra
601.8
633.7
5.3
3 147.9
2.1
23 Brisbane Newcastle
572.7
595.0
3.9
2 372.9
2 244.9
-5.4
24 Adelaide Perth
598.0
594.4
-0.6
5 Adelaide Melbourne
2 346.9
2 092.4
-10.8
25 Cairns Melbourne
478.9
501.7
4.8
6 Melbourne Perth
1 799.4
1 892.2
5.2
26 Hobart Sydney
513.3
461.0
-10.2
7 Perth - Sydney
1 656.1
1 766.7
6.7
487.8
458.2
-6.1
8 Adelaide Sydney
1 781.3
1 703.1
-4.4
27 Sunshine Coast - Sydney
400.2
426.3
6.5
9 Gold Coast Melbourne
1 793.5
1 679.8
-6.3
28 Melbourne Newcastle
335.0
414.3
23.7
10 Brisbane Cairns
1 151.1
1 132.0
-1.7
29 Perth - Port Hedland
363.9
370.6
1.8
11 Hobart Melbourne
1 250.9
1 130.0
-9.7
30 Brisbane Darwin
419.1
350.0
-16.5
12 Canberra Sydney
1 088.1
1 057.6
-2.8
31 Melbourne Sunshine Coast
309.4
311.8
0.8
13 Canberra Melbourne
1 114.2
1 033.7
-7.2
32 Coffs Harbour - Sydney
321.3
311.2
-3.2
14 Brisbane Townsville
947.6
990.3
4.5
33 Broome Perth
299.4
293.0
-2.1
15 Brisbane Mackay
836.1
947.4
13.3
34 Darwin Melbourne
210.3
279.2
32.8
16 Cairns Sydney
890.6
915.0
2.7
35 Newman Perth
270.4
264.1
-2.3
17 Brisbane Perth
778.6
908.3
16.7
36 Ballina – Sydney
246.4
244.4
-0.8
18 Launceston Melbourne
831.9
788.7
-5.2
37 Albury Sydney
233.8
241.3
3.2
19 Adelaide Brisbane
716.6
686.9
-4.2
38 Kalgoorlie Perth
222.4
220.8
-0.7
20 Karratha Perth
601.3
686.1
14.1
39 Launceston Sydney 40 Brisbane Proserpine
206.6
211.4
2.3
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
45
Passengers carried (000s) — annual activity City-Pair
46
YE Apr 2011
YE Apr 2012
% Change
41 Port Macquarie Sydney
214.1
201.4
-6.0
42 Melbourne Mildura
200.4
194.2
-3.1
43 Adelaide Port Lincoln
200.1
193.5
-3.3
44 Cairns Townsville
184.0
188.9
2.7
45 Hamilton Island - Sydney
182.1
187.3
2.9
46 Adelaide Gold Coast
227.9
183.7
-19.4
47 Adelaide Canberra
188.0
183.2
-2.5
48 Sydney Townsville
175.5
182.2
3.8
49 Sydney Wagga Wagga
186.6
179.6
-3.8
50 Dubbo Sydney
182.4
173.7
-4.8
51 Brisbane Hamilton Island
172.0
164.3
-4.5
52 Darwin Perth
146.6
160.7
9.6
53 Ayers Rock Sydney
100.7
151.0
NA
54 Brisbane Gladstone
..
149.0
NA
55 Geraldton Perth
..
54.9
NA
56 Brisbane Emerald
..
43.9
NA
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> Of the 56 busiest City-Pair routes in Australia in April 2012, the strongest growth in passengers carried compared to April 2011 was recorded on the following routes: Perth – Port Hedland 39.9% Newman – Perth
39.5%
Brisbane – Mackay
17.9%
Brisbane – Proserpine
17.8%
Hamilton Island – Sydney
14.9%
Karratha – Perth
14.7%
Brisbane – Perth
13.2%
By any measure, Australia’s regional airports play a vital part in connecting Australians across the country!
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
47
THE ECONOMIC AND COMMUNITY CONTRIBUTION OF REGIONAL AIRPORTS The study of the economic and social contribution of Australia’s airports, prepared by Deloitte Access Economics for the AAA and released in 2012 provides a major insight into the economic and community contribution of Australia’s regional airports. The following extracts from it provide only a brief summary of the conclusions documented and explained more fully in that report: The current economic contribution of Australia’s ‘core’ airport sector in 2011 was estimated at $3.2 billion, with $2.6 billion in gross operating surplus (GOS) and $620 million in wage payments, spread as follows: Economic contribution of the core airport sector, 2011 Valueadded ($m)
Wages ($m)
GOS ($m)
Major airports
2,853
508
2,346
Major regional airports
255
71
185
Regional airports
52
26
25
Remote airports
22
16
6
3,183
621
2,562
Total
The return to capital inputs, at close to 80%, are comparatively high for the core operational functions of the airport sector. This is characteristic of capital intensive industries which rely on large infrastructure assets to derive income. As a result, the labour share of core airport operations is quite low — yielding a total employment of around 6,900 FTEs. However, the operational core of an airport is only one component of its overall economic profile and a broad range of associated and ancillary activities also typically occur on airport precincts to support airports in performing their core functions. An estimate of these activities, across Australia’s network of airports, was undertaken based on the size of each airport’s core operations and stratified precinct relativities reflecting inherent differences between the four major classes of airport (major, major regional, regional and remote airports).
48
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
Under this approach, the value added from airport precinct activities was estimated to be approximately $14.1 billion in 2011, with significant employment of about 108,300 full-time workers. This component of the industry economic contribution has been based on more limited information and, accordingly, should be viewed as exploratory — representing a potential order of magnitude for the economic footprint of airport precincts across the country. Bringing the two key aspects of the industry’s activities together, the total direct industry value added was estimated to be in the order of $17.3 billion (this equates to around 1.2% of GDP), with overall employment at airport sites of around 115,200 full-time equivalent workers. Total economic contribution of Australia’s airports, 2011 Employment Value (FTE) added ($m) Core airport operations
6,865
3,183
Airport precinct
108,291
14,083
Total
115, 156
17,266
The wider economic gains generated by airports These contribution estimates provide a ‘snapshot’ picture of the current economic gains created by the airport industry at a single point in time. The considerable size and complex range of activities undertaken at airports mean that the impacts created today may take time to materialise and permeate through the economy. In fact, over time, as the employment and income gains of those employed at airports, or those who rely on airport services spread across the economy, the ongoing contribution of the airport industry can be even higher. The following discussion around the induced and catalytic impacts represent economic benefits that have a temporal dimension, that is, they have a time-based pattern of development and as a consequence mat not be apparent in a snapshot analysis.
Induced effects
Catalytic impacts
Like other economic activities, the activity generated at airports produces further flow-on benefits throughout the economy. These induced effects are generated by successive rounds of spending enabled by the income and employment supported by the airport industry.
It is widely recognised that beyond their immediate contributions, the link between airports and access to air services has helped transform the functioning of the Australian economy — in effect, strengthening and accelerating trade and social connections across the country and abroad. The extent to which the existence of airports and the air services they enable boosts the performance of other industries and indeed the overall economy, are typically termed ‘catalytic impacts’.
In essence, airport industry employees use their salaries to purchase goods and services from other businesses in the community. These businesses then make additional purchases or hire employees which induce further spending across local and national economies. The successive ripples of spending within the economy mean that induced impacts tend to manifest incrementally over time, rather than be observed as an immediate stimulus effect.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
49
More specifically, catalytic impacts involve a range of positive spillover effects, including: >> Global accessibility and trade — One of the most significant advantages of airports is to facilitate, through delivery of air services, better access to larger markets. The wider availability and falling price of air transport over the past few decades has assisted in making trade with distant markets possible for all types of organisations. This can be seen in rising levels of trade intensity, which now accounts for around 46% of economic activity in Australia International trade is commonly recognised as a key driver of economic growth and rising living standards. Essentially, trade allows countries to specialise in producing the goods and services in which they have a comparative advantage in exchange for products that domestic consumers demand, but are produced more efficiently elsewhere. The net result is an increase in the overall value of goods and services available in an economy. >> Productivity — By facilitating increased mobility, the airport sector plays a vital role in supporting other parts of the economy to operate more productively. Mobility is a predicator of economic activity, as it satisfies the basic need of moving from one location to another, a need that is shared by passengers, freight and information. Airports enable organisations to exploit geographical comparative advantages and promote the development of economies and scale and scope through the access to air services. The use of air services has become exceedingly important in light of the greater economic integration between national and global markets. Airports provide easier access to suppliers, staff and customers, particularly over longer distances, increasing business efficiency and thereby contributing to stronger productivity performance and economic growth. The application of FIFO charters highlights the way in which the airport sector, in conjunction with airline operators have effectively supported new productive resource developments across the country.
50
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
>> Inward investment — Airports have become a part of multi-modal transport hubs. As road and rail links to airports improve, airports with large areas of available adjacent land are able to capitalise and develop as national or regional centres of logistics. This has been supported by the growth in airfreight, where manufacturers of high value, low-density products trade-off the savings in inventory costs for costs of using air travel more frequently. Products such as fashion garments and perishable goods are increasingly using air travel as the preferred transport mode. This trend has translated into a greater number of freight-forwarding firms basing operations at airports or in proximity to them. >> Tourism — Airport services facilitate passenger entry and exit to the area, generating income and employment in the Australian tourism industry and related sectors of the economy. Segments of the tourism industry in which airports and air travel are of particular significance include: mass tourism, short domestic breaks, conventions and exhibitions and long haul tourism. Expenditure by tourists can form a major part of the economic impact attributable, at least in part, to the existence of an airport. >> Commercial activity — Better connections to domestic and international markets have the potential to attract businesses to locate at or within close proximity to airports. Those industries that need air services to conduct their operations gain efficiency when located near airport networks. In addition, sectors with a trade element also benefit from proximity to airports. These advantages can be seen in the broader ‘off-airport’ precinct around major airport facilities. Australia’s high-value services composition necessitates the frequent use of air travel to coordinate with suppliers, and liaise with customers and staff. Air travel enables organisations to be managed more effectively, by making it easier for executives to visit subsidiaries or parent companies in another location. In this way, management expertise can also be transferred across offices. The propensity for collaboration, innovation and networking is also increased. The Deloitte Access Economics report did not seek to place a dollar value on these catalytic effects and this would be an inherently difficult and uncertain task.
THE MYTHS AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
51
MYTHS ABOUT AUSTRALIAN AIRPORTS Very few outside the aviation industry have a sound understanding of how an airport works, and even some within the industry are blind to some of the fundamentals. Accordingly, this section seeks to dispel some of the most frequently disseminated myths:
Airports are powerful monopolies In most cases an airport is in a monopoly position – it is usually, but not always, the only airport in the area. But even where an airport is the monopoly supplier of airport services in its area, it is far from powerful. There are many constraints on the extent to which an airport, and particularly a regional airport, can flex the commercial power often associated with a monopoly business: >> Airlines and other airport users possess marked countervailing power. A regional airport negotiating with any significant airline has far less capacity to press a commercial outcome than a larger airport (and the Productivity Commission has found that even the largest Australian airports have not abused whatever market power they may have). Airline businesses are themselves so cost sensitive that they will abandon routes if regional airport charges are increased to a point approaching anywhere near a monopoly rent, or simply refuse to pay even though they may continue to use the airport – indeed, it seems likely that at around half of Australia’s regional airports, airport charges do not even reach cost recovery;
>> Airports often have to compete with one another, particularly to attract the location of airline maintenance facilities or to secure RPT services where there are other airports within a relatively close distance (as, for example, in Tasmania); >> Airport owners are predominantly local government bodies who exert pressure to ensure that airports attract and maintain the air services that their communities demand; >> As utility service providers, airports are always subject to the threat of regulatory intervention if they seek to abuse market power or set prices at levels that exceed a fair return – history and three Productivity Commission inquiries have conclusively shown that even the largest of Australian airports have not abused their market power.
Airports are a licence to print money Airports are often thought to be “big business” because they have large assets and some even suggest that they are a “cash cow” used by their local government owners to cross subsidise other municipal services. The AAA knows of no evidence to support such contentions. As already noted, around half of Australia’s regional airports operate at a loss and there are significant constraints on an airport increasing its charges to or beyond a fair return on capital. Indeed, the BITRE publication Avline 2010-11 includes a table that shows that charges at the 10 regional airports serviced predominantly by non-jet aircraft and handling the highest number of passengers in 2005-062 generally remained unchanged in nominal terms and fell by 3.4% in real terms between July 2010 and July 2011. At the two exceptions, charges increased in real terms at one airport by 0.5%3 and reduced in real terms by 6.1% at the other4. This is not the behaviour pattern expected of the price gouger!
1 Albury, Armidale, Burnie, Dubbo, Gladstone, Mildura, Port Lincoln, Port Macquarie, Tamworth and Wagga Wagga 2 Dubbo 3 Wagga Wagga
52
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
Airport operators control everything that happens at their airport, especially noise Certain actions of airport operators can generate noise (for example, through the choice of terminal air-conditioning plant, or during the construction of new infrastructure) or affect the impact which noise generated by others may have beyond the airport boundaries (for example, by the location of run-up bays, or of premises for on-airport aviation and nonaviation businesses). However, while clearly accepting responsibility for the noise impacts of such actions, it is also pertinent to note that the level of noise within the control of an airport operator is comparatively negligible. It comes as a surprise to many to learn that the airport operator cannot control the most important source of noise generated by operations to, at or from an airport – that generated by aircraft. The following points illustrate this fact for the “privatised airports” , which include “regional” airports like Bankstown, Archerfield and Parafield: >> It is the Commonwealth, and not the airport, that mandates (through the lease terms it has set for the former FAC airports) that an airport cannot refuse access to aircraft no matter how much noise they generate; >> It is the Office of Airspace Regulation in CASA, and not the airport, that designate airspace in which aircraft may permissibly operate; >> It is CASA, and not the airport, that permits aircraft types to operate in Australia; >> It is the Secretary of the Department of Infrastructure and Transport or their delegates in the Department, in CASA or in Airservices Australia, and not the airport, that issues noise certificates for aircraft under the Air Navigation (Aircraft Noise) Regulations 1984; >> It is airlines, and not the airport, that choose what permissible aircraft they will operate, and on what schedules, when flying between, landing at and departing from airports; >> It is Airservices Australia, and not the airport, that determines under the Air Services Regulations 1995 what flightpaths those aircraft will use when flying between, landing at and departing from airports
>>
>>
>>
>>
>>
and thereby affects how the noise those aircraft generate will affect the community; It is the Minister for Infrastructure and Transport or their departmental delegates, and not the airport, that take decisions under the Adelaide Airport Curfew Act 2000 that affect whether aircraft operate during curfew hours at Adelaide Airport; It as Airservices Australia, and not the airport, that is statutorily obliged under the Air Navigation (Aircraft Flight Corridors) Regulations 1994 to monitor and investigate compliance by aircraft with designated flight corridors at Sydney Airport; it is the Secretary and Airservices Australia, and not the airport, that take decisions under the Air Navigation (Coolangatta Airport Curfew) Regulations 1999 that affect whether aircraft operate during curfew hours at Coolangatta Airport; It is the Secretary and Airservices Australia, and not the airport, that take decisions under the Air Navigation (Essendon Airport) Regulations 2001 that affect whether aircraft operate during curfew hours at Essendon Airport; And, of course, it is Airservices Australia, and not airports, that is responsible for the Noise Enquiry Service and the Aircraft Noise Ombudsman.
The detail of these responsibilities at airports other than the “privatised airports” differs but the general proposition holds true – airport operators cannot really control the noise emitted by aircraft using their airports.
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
53
Airports are passive assets that run themselves
Airports rents should not be set at market rates for airport tenants
An airport is not a “set it and forget it” business. While assets like runways are relatively passive, they do need to be actively managed – for example, by regular inspections to ensure that they are free of foreign object debris and to manage wildlife intrusions.
Regional airports value their GA and other airport tenants and do appreciate that they face their own financial pressures.
Running an airport is just like running a camping ground Just as at the local camping ground, itinerant travellers can land their aircraft at an airport and potentially leave before their presence is detected and an airport fee collected. But there the analogy ends. An airport manager’s job calls for the exercise of a whole range of specialist skills unique to operating an airport, and the consequences for failing to exercise them with due care and diligence can be significant for all concerned. On occasions those who are elected to local government office do not have the background or experience that allows them to recognise the degree to which specialist professional and technical skills are required to operate the airport of which their council is the custodian for the community. The risks to a council and its community if an airport is not operated at the requisite standard could be catastrophic not only financially, but also in terms of loss of life. These factors make airports somewhat unique among local government operations.
54
AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
Over time, however, there has been an increasing trend to set airport rents at an economically justifiable basis, by reference to market value. At privatised airports this has been a necessary and intended consequence of the privatisation process – essentially, the government owner invited offers for the right to operate the airport on a fully commercial basis, and used the privatisation proceeds for public purposes. At other airports, this trend has been driven by the need of local government bodies throughout Australia to moderate their demands on ratepayers and optimise the services that they can provide to their community for the rates they pay. Even so, perhaps as many as 50% of Australia’s regional airports are still operating at a loss. Arguments that airport tenants should not pay market-based rents are essentially a claim for a publicly-funded subsidy that, if it is to be granted, needs to be demonstrated to be in the interest of the public generally, and not just to the advantage of the individual tenant.
THE CHALLENGES AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES
55
CHALLENGES FOR AUSTRALIA’S REGIONAL AIRPORTS Australia’s regional airports face multiple challenges in their endeavours to continue to meet the needs of the communities they serve. Essentially, regional airports need to operate at the elusive intersection between commercial reality and community need. This section seeks to briefly highlight the most significant of them.
Financial capacity to maintain regional airport infrastructure Simply maintaining existing airport infrastructure in a safe and usable condition can be a challenge at many regional airports, and particularly the more remote. Airport facilities such as runways, lighting and navigation aids are not passive assets – they need active ongoing operational attention and periodic renewal, which is particularly expensive especially as the distance from major urban centres increases. For example, infrastructure renewal and development costs at Ceduna airport in South Australia are around 1.5 times higher than those in Adelaide, while at DerbyWest Kimberley Airport they can readily be 3 times higher, or even greater, than in Perth. The Deloitte Access Economics report found that there is a clear pattern between declining profitability and airport size. Key profit and loss statistics indicate: >> Around 95% of major and major regional airports reported profits. >> Only 55% of regional airports reported a profit. >> About 45% of remote airports recorded a profit.
Most of the registered airports in Australia are very small; in addition, there are numerous much smaller facilities across the country which are used for (more irregular) aircraft operations. These facilities, most of which are owned and operated by local councils, have little broader industry profile yet provide vital services to their communities. The majority of these smaller and dispersed facilities face considerable operational and financial pressures. While the maintenance and operational cost requirements for remote airports are often modest, they typically lack the scale to ensure they can be financially self-sustaining. As a result, a large share, if not most, have recurrent requirements for financial support by their government owners, either in a general sense or for specific works (e.g., to pave runways or install navigational lighting). This means that funding for most airports needs to compete with pressing demands for other municipal services. Under the Aerodrome Local Ownership Plan (ALOP), through which the Federal Government transferred very many airports to local government ownership, grants were offered to bring the airports up to good operating condition as part of the transfer arrangement. The alternative was the potential closure of the airports. What is now evident in many cases is that the local government airport owners have not made (or not been able to make) adequate provision for future funding of major recurring maintenance projects such as aircraft movement area resurfacings. This impost, together with either strong growth or declines in passenger numbers and changing regulations, has required these owners to divert investment away from their core infrastructure or to alternatively seek State or Federal Government, or in some cases private, funding. Conceivably, at some of these airports, these funding pressures may make continued operation of a regional airport uneconomic. In such a situation, the local government owner would need to seek to negotiate with the Commonwealth for variation of the terms of the ALOP agreement under which ownership of the airport was transferred to it, as these agreements require the airport to continue to be operated as an airport.
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Maintaining RPT services to regional airports The regularity, predictability and convenience of RPT services are a major asset to regional communities. However, there has been a declining trend in the number of regional airports with RPT services over the last two decades. Since 2005, RPT services have ceased at 45 regional airports, while only 25 airports have gained new RPT services. The majority of these changes in RPT services have been in Queensland and the Northern Territory. Some of the RPT-discontinued airports are now only serviced by charter flights. It is not just passenger numbers on lower density routes that drives the cessation of RPT services. The development of aircraft technology also affects airports. The trend towards larger and more fuel-efficient planes impacts on the ability of airports to cater for a larger number of arrivals at a single time; and may require some infrastructure and runway changes. For regional airports, the development of modern turboprop aircraft which are larger (most are over 50 seats), pressurised and more fuel efficient is also having an effect on the delivery of air services. There has been a shift towards greater hubbing of regional air routes. Certainly some regional centres (e.g. Wagga Wagga Airport) have experienced strong growth in utilisation over recent years as they have developed into key regional hubs — particularly on the back of growth in mining and agricultural services. But other airports and their communities have lost RPT services as a result. Modern turboprops are being increasingly deployed on regional routes (many are replacing older fleet aircraft). Importantly, to ensure these aircraft are maximally utilised, a regional hub-and-spoke model in regional Australia is likely to become further entrenched. Given their size and weight, these aircraft will also have longer term impacts on the infrastructure and maintenance requirements for affected regional airports.
Skilling the regional airport The aviation industry requires a highly skilled and diverse workforce. Consisting of nearly 56,500 air transport jobs, the aviation industry supports activity at airports and air service dependent sectors. By nature the industry is heavily reliant on technical occupations – not just pilots, air traffic controllers, aircraft engineers and IT professionals, but also airport specific technical professionals such as Work Safety Officers and Aerodrome Reporting Officers. The development of a sufficient number of skilled workers is critical to ensuring the industry’s continued strategic role in the Australian economy. The training arrangements are sometimes complex as aviation skills development is pursued at a number of levels by industry, through higher education, and through vocational education and training. In the past, the aviation industry has seen poor recruitment numbers, barriers associated with education funding and limited access to practical training facilities. In addition, the civilian and military components of the aviation industry have operated largely independently, with the transfer of skills and personnel between these groups hindered by the absence of an integrated training system. A constant challenge is an ageing workforce and labour shortages in key skill areas and locations, especially where staff trained at regional airports are enticed to move to larger airports in search of perceived career progression. A further challenge is avoiding de-skilling of staff at smaller airports where traffic is not sufficient to require that they work at the airport on a full-time basis and they are deployed part-time to other more generalist duties. To meet training challenges in the airport industry, the AAA and the Transport Logistics Industry Skills Council are coordinating the roll out a national training plan aimed at training Work Safety Officers and Aerodrome Reporting Officers as part of the National Workforce Development Fund. This program has received encouraging support across the industry. Training was delivered to more than 100 candidates.
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Enhancing regional airport infrastructure to meet increasing demand Growth in traffic to and from regional airports can be a blessing but also generate its own problems in terms of congestion and demands for expanding airport infrastructure. Airports are capital intensive businesses, underpinned by their principal role as transport infrastructure providers. Like other forms of economic infrastructure, these assets are long lived and have few, if any, alternative uses. While airport infrastructure is characterised by extremely long asset lives (sometimes in excess of 50 years), they are also associated with long lead in times. This means that expenditures made today, often take a period of several years to materialise into operational facilities. Therefore, in order to ensure market demands are met, airports are required to identify periodic expansion investments far in advance of any forecasted shortfalls. Some recent developments have effectively intensified the broader pressures faced within Australia’s airport network: >> The trend towards larger and heavier aircraft on regional routes has increased infrastructure requirements for both terminal facilities and runway maintenance, adding to the costs for smaller operators. >> The drive for greater efficiencies by RPT operators has also led to consolidation on many regional routes. Greater load factors have certainly benefitted some regional airports (and passengers) but it has meant that other facilities handle fewer and more irregular air services. In some cases, RPT services have ceased altogether which can have a more fundamental effect on sustainability.
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And financing development to meet growth demands at regional airports can be a major challenge for a variety of reasons, such as: >> Because there is no certainty that the increased air services that drive the need for expansion will continue to use the airport – for example, if an airlines traffic projections on a new route prove too optimistic, if a local mining project is “mothballed” as overseas mineral demand eases, or if world events dampen tourism to Australia; >> Because the local airport owner may have other competing demands on their borrowing capacity in order to provide other municipal services to its community; or >> Because State legislation may place limitations on the borrowing capacity of local government entities. By way of a practical example of the pressure that growth can bring, the April 2012 Western Australian Air Traffic Task Force Report to the Aviation Policy Group discloses that: >> Outside Perth, a number of aerodromes in the state have seen sustained increases in passenger numbers and aircraft movements over the past five years, including Karratha, Broome, Port Hedland, Newman, Geraldton, Kununurra and Paraburdoo. >> However, apron space at some regional aerodromes is so limited that aircraft have to get airborne to allow other aircraft to land to facilitate the movement of other aircraft. >> Perth congestion in relation to surface movements, departures and arrivals is a significant issue which has effects on traffic to and from regional ports. Increasing the efficiency of the upper airspace may increase the traffic at regional aerodromes, but additional traffic may cause delays on the ground and congestion in the surrounding airspace. >> Potentially, encouragement of airport owners and operators to invest in additional capacity at their airports, e.g. in hubs, runways, taxiways and additional parking facilities may enhance air traffic movement within the region by removing ground based traffic choke points. >> However uncoordinated airport planning (including the potential opening of new airport sites) in North West Western Australia raises a number of issues for airspace and air traffic management.
>> There are three major aerodromes in the North West which have experienced sustained growth over the past five years—Broome, Karratha and Port Hedland. >> The Task Force discussed the introduction of aerodrome hubs to service the resources industry. The hubs would be used as a transfer point for mining workers and could reduce the burden on Perth Airport. The hubs would be large enough to accommodate high capacity aircraft (Boeing 767 and Airbus A330) from Perth and interstate. >> Due to the volume of mining activities spread around Western Australia, two or more hubs may be required to meet demand. Infrastructure at the hubs would be upgraded to include an ATC Tower, Aerodrome Rescue and Fire Fighting Services (ARFFS) and surveillance. A Class C ATC service would likely need to be introduced. >> Possible locations for hubs would be in the Pilbara region (Port Hedland/Karratha/Broome) and in the mid-west region near Geraldton. A hub in the Kalgoorlie region may be required to service the south of the state. >> Significant infrastructure investment is required for a hub to be operational. The cost of the investment includes: –– Cost of land (if a greenfield site and not an established aerodrome); –– Runway work (Construction, lengthening/ widening/strengthening/lighting); –– Taxiway and apron works; –– Terminal facilities; –– Navigational aids/instrument landing systems; –– ATC Tower/data and communication links; –– ARFFS; and –– Surveillance. >> Sourcing specialist equipment for the ATC Tower could delay the implementation of ATC at a location, if not planned well. The lead-in time to recruit and train ATC staff is considerable. A conservative estimate of 18 months is required to install an ATC Tower at an existing aerodrome and have it appropriately staffed. The time to create a hub at a greenfield site would be considerable due to the need to locate and purchase a suitable site.
>> There may be a reluctance by mining companies to use hubs. A number of mining companies prefer to segregate their staff from workers from other companies in an effort to prevent staff being poached. Anecdotal evidence presented to the Task Force suggests that poaching of staff at aerodromes is a concern to mine operators. >> Hubs may adversely affect mining companies, as it could introduce additional costs. The costs of establishing major works in the airport sector and more broadly across the economy have been increasing. This is being primarily driven by rising construction costs and shortages of skilled labour. Cost over-runs and slippage of development schedules represent substantial risks to airport projects, especially given the considerable scale of investment. A further factor is that airport infrastructure, whether terminal facilities or runway works, are among the most expensive forms of commercial and civil construction. This is particularly the case at the more remote airports where development costs can be a multiple of those in capital cities.
The risk of “stranded” assets at regional airports Unlike many other infrastructure sectors, final demand from airlines is not underpinned by long term contractual commitments and, accordingly, airports must bear substantial demand risk. This can impede forward investment decisions, such as on infrastructure and terminal facilities. This problem besets all airports, but is particularly an issue at regional airports. Not surprisingly, airlines commencing new regional RPT services are not prepared to give an assurance to the airport operator that those services will continue to operate indefinitely, or even for definite periods. They reserve the option to cease services at short notice if load factors render a route uneconomic for them, or to maintain the route but substitute smaller aircraft or reduce frequencies. There may be a need for a regional airport to expand its infrastructure capacity in order to attract new RPT services of real potential benefit to the local community – for example, by widening or lengthening runways
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or installing security screening equipment mandated by the Office of Transport Security for aircraft of a particular size. Airlines generally insist that airport fees recover these costs only through over the full economic life of the new asset – up to 50 years in some cases. This means that there is a considerable risk that regional airport investment can become “stranded” and lie idle many years before its cost has been recovered by the airport operator.
Protecting the operational viability of regional airports from off-airport encroachment The capacity of an airport to operate as an airport is fundamentally dependent on what occurs on the land surrounding it. The erection of structures that physically intrude into the flight paths of arriving and departing aircraft can clearly limit or prevent use of the airport. But so too can other developments that are less obvious. For example: >> Insensitive residential developments under flight paths may lead to complaints about aircraft noise and eventually lead to the introduction of curfews or even the closure of an airport; >> Industrial activities that generate smoke or similar hazards may constrain use of an airport; and >> Other activities such as agriculture, animal husbandry or wetland developments may attract birds and pose a distinct hazard to aviation. There is no uniform regime that requires developments around airports to be subjected to scrutiny to assess their potential impact upon an airport. CASA has some limited capacity under Regulations made under the Civil Aviation Act 1988 to approve or not approve buildings or structures in limited areas around airports, but only in respect of Sydney, Bankstown, Moorabbin, Adelaide, Melbourne and Essendon airports. And the Secretary of the Commonwealth Department of Infrastructure and Transport has some capacity to act to protect airspace around airports under the Airports (Protection of Airspace) Regulations 1996. But none of this legislation provides any comprehensive protection for Australia’s airports.
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In its 2009 Aviation White Paper the Commonwealth Government proposed the development of a national land use planning framework that would: >> Improve community amenity by minimising noisesensitive developments near airports including through the use of additional noise metrics and improved noise-disclosure mechanisms; and >> Improve safety outcomes by ensuring aviation safety requirements are recognised in land use planning decisions through guidelines being adopted by jurisdictions on various safety-related issues. The subsequently established National Airports Safeguarding Advisory Group (NASAG) comprising of Commonwealth, State and Territory Government planning and transport officials, the Department of Defence, CASA, Airservices Australia and the Australian Local Government Association (ALGA) has made significant progress in developing a National Airports Safeguarding Framework but this is not yet comprehensive or certain in the protection it affords.
Living with the GA industry at regional airports Both airport operators and GA businesses have legitimate commercial interests but the way in which their relationships have evolved over time has led to difficulties and misunderstandings. The following discussion is drawn from the 2008 Report of the General Aviation Industry Action Agenda. According to IBIS World Business (IBISWorld, 2007), in 2005‐06 the Australian non‐scheduled air and space transport sector comprised 1,192 enterprises employing 3,788 people. Industry turnover was $923.8 million, representing a 15.3 per cent increase over the previous three years, with export earnings of $65.2 million.
Approximately a quarter of revenue is respectively generated by each of passenger transport, flight training and aerial work. The remaining share is comprised of private and business use and test and ferry operations. Industry concentration is low, indicating a high proportion of smaller, locally-based businesses. The Australian GA industry is in a state of transition. Some sectors are growing strongly while others are in decline with some individual businesses struggling to remain viable. Changes surrounding the GA industry over the past twenty years have been profound: >> The termination of the two‐airline policy in 1990 allowing the entrance of new airlines to the Australian domestic aviation market. This has resulted in an expansion and restructuring of the domestic airline industry with the number of passengers on domestic services almost trebling, from 15.6 million in 1990 to 45.8 million in 2006‐07, driven by lower air fares and more choice for consumers. >> In the early 1990s, the transfer of local, council‐ operated airports under the Aerodrome Local Ownership Plan (ALOP) to local governments. >> In the late 1990s/2000s, the privatisation of 22 Commonwealth‐owned airports under leasehold arrangements. >> The transition to user cost recovery arrangements for aviation safety regulation in recent years, though not new, represents an increase in the proportion of activities cost‐recovered by CASA. Twenty‐two federally owned airports were leased to private operators since the late 1990s and are now run as fully commercial organisations. Many tenants had come to view previous long‐term lease arrangements as a reliable indicator of future costs but have found that many previous access arrangements were priced below market value and the adjustment has been significant. This has also occurred at some regional airports under local government control.
The commercial tension that has resulted from these changes has created difficulties for both tenants and airport operators. While not a universal view, there is widespread acceptance that airports should continue to operate as efficient commercial operations. However the privatisation of secondary airports has resulted in GA operators being exposed to a commercial charging regime never fully experienced under the previous system of government ownership. This has exposed vulnerabilities in the business models of many General Aviation businesses that had not been evident previously. In many circumstances, rents levied on hangars, commercial premises and land have been increasing, particularly at the major metropolitan GA airports. The leases concerned are commercial agreements between airport lessees and their tenants and are therefore a relatively new development in the industry. It is likely that these price changes will have led to a reorganisation of GA activity. Participants in the industry who are sensitive to changes in the price of airport access may have moved away from higher cost aerodromes, trading off reduced costs for a less convenient location and perhaps more limited infrastructure. The costs of relocation can be significant as some tenants may lose sunk capital costs, such as the buildings situated on the site of their lease, if they choose to relocate. Generally rents at GA airports have increased significantly since privatisation, reflecting the fact that former FAC rents were unrealistically low. Also, commercially driven airport lessees adopted rents more commensurate with commercial rates at off‐ airport locations. However, this is not uniform or solely the result of airport privatisation. Rents vary greatly between airports and tenants. Although GA operators understand the need for airport managers to derive a commercial return from their assets, some stakeholders believed that the drive for rental increases at some airports has been to such a degree that animosity has been generated. Airport tenants often focus on comparisons between the old FAC rents and current rents with little regard to movements in general capital city real estate prices. Airport lessees have pointed out that the value of real estate in capital cities has increased markedly over the last decade and airport values will to some extent reflect that.
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Living with the cost of aviation safety regulation
Living with the cost of security regulation
Aviation is, by its nature and consistent with community expectations, highly regulated. Safety is not negotiable. Achieving the high levels of safety rightly expected of the industry while not imposing unnecessary costs is an ongoing challenge.
Smaller regional and remote airports typically have lower levels of passenger throughput or commercial activities, reducing the level of mandated security. However, if these airports receive passenger services involving aircraft greater than 20,000 kg they need to undertake passenger screening. In this case, relevant screening costs are often far higher than those at larger airports as the costs are effectively amortised over a smaller passenger base.
Regional and remote airports spend a greater share of resources complying with relevant regulations, including mandatory audits and inspections. On average major and major regional airports attribute 4% of total expenses for regulation and compliance purposes, compared to 12% at regional and remote airports. That is, the regulatory impost for regional and remote airports is around three times higher than that faced by larger airports.
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There have been significant changes since 2001 to the regulatory regime governing security requirements. While the industry accepts these changes, there is a common view that security requirements can be disproportionate to the risks involved and need periodic review across the various categories of airport to determine that regulatory measures are compatible with current risks and threats.
The resourcing of increasingly busy and complex regional airports is highlighting the cost of compliance and the shortage of skilled personnel in many communities, particularly those in areas of major resource projects. A number of regional airport owners have been struggling to meet the requirements of the new regulations. Aviation security screening and the development of Transportation Security Plans, for example, are new undertakings for these operators. In addition screening activities generally require much greater numbers of staff than were typically required before the new regulations were prescribed. Longreach Airport, for example, was operated by one full-time and one part-time staff prior to the introduction of passenger and baggage screening. The airport now requires one additional full-time staff person and seven additional part-time staff to handle just one RPT flight per day. Whilst the Federal Government has in many cases funded the screening equipment it has required to be installed, airport owners are required to meet all other capital and operating costs. These changed regulatory requirements also require significantly more sophisticated airport management skills. Compliance is mandatory and in many cases requires skills, experience and qualifications not available locally.
Pax # FY12 Aero Charges
Gold Coast Domestic
The cost of implementing the new security regulations has been significant. Given the fixed level of costs, the smaller the airport, the more significant the per passenger cost of compliance. This cost must be passed on to the passenger and is additional to the already relatively high aeronautical charges required because of the lack of scale at smaller airports. By way of example, the following illustrates the much higher cost per capita required to fund operations and facilities at four regional airports operated by Queensland Airports Limited (QAL), at Gold Coast, Townsville, Mount Isa and Longreach. The much higher costs per passenger required to operate regional airports reflects a similar position for the regional airline operations. The end result is significantly higher fares for passengers from smaller communities compared to those travelling to or from our larger centres.
Gold Coast International
5,315,255
Townsville
Mt Isa
Longreach
1,693,365
247,281
37,726 16.64*
5.59
5.5
4.96
13.3
Terminal Charges
3.2
3.95
5.77
7.1
Security Charges
2.75
3.9
2.11
5.8
CUTE (departing only)
0.27
0.27
na
na
13.2** na
*There are no published rates for LRE. This is the adult rate. **FY13 rate as there are no published charges for FY12
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Avoiding unnecessary and inconsistent regulation It is a well-established principle in Australia that government regulation should intrude into the affairs of Australian people and businesses only where it is necessary to do so in the public interest, and then only to the extent necessary to safeguard that public interest. Complying with new regulatory requirements necessarily involves cost, and any unnecessary increase in costs is something that regional airports especially have a clear need to avoid – particularly as so many already operate at a loss. Increases in airport security requirements such as checked bag screening and front-of terminal security and the introduction of other measures such as requirements for Drug and Alcohol Management Plans constitute a potentially overwhelming burden on the limited budgets of smaller airports and should only be imposed where the balance between risk and benefit clearly requires it in the individual circumstances.
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And, where existing legislation is applied inconsistently between airports, this too means an increased cost for those airports at which inconsistency imposes a higher burden. A challenge therefore for all regional airports is to seek to ensure that airport regulation is sufficiently “granular” to treat materially different categories of airports in an appropriate manner and, within each category, in a consistent and predictable manner.
Maintaining regulatory awareness Australia’s airports are subject to a diverse and complex range of regulatory requirements that change and evolve over time. Achieving and maintaining an operational familiarity with all these requirements is a demanding challenge for even a dedicated regulatory affairs professional. And, at regional airports where all airport operational tasks must be undertaken by only a few individuals (and sometimes even just one), this can be a near impossibility.
Not only airport operators and the AAA as their industry association but also government regulators need to be constantly searching for improved ways in which airports can be consulted in and informed about the development of new and changed regulatory requirements that affect airports whether directly or, through their impact on airlines or others, indirectly.
Competition Over the past several decades Australian airports have encountered increased competition from alternative transport modes with significant improvements in road infrastructure and motor vehicles. It is now far more conceivable that regional travellers will avoid travelling through their local airport altogether, or use a more distant airport to achieve speedier overall door-todoor travel. Airports are also fundamentally affected by competition between destinations, and particularly tourist destinations, over which they have no control. For example, Broome competes with Bali every day.
Optimising non-aeronautical opportunities to support aeronautical operations Regional and remote airports generate about 25% of their revenue from non-aeronautical sources. This compares to around 44% in major and major regional airports. Non-aeronautical developments at various Australian airports include precincts for office business parks, hotels, shopping outlets, freight and logistics centres and some manufacturing and processing plants. Non-aeronautical revenue can be important as it provides commercial diversification to support airports through times when aeronautical revenue is less stable. Solely relying on aeronautical revenues may add to the challenges of financially supporting long term infrastructure and maintenance functions. And yet regional airports do not enjoy many of the benefits of capital city airports (such as shortages of alternative urban land) that can make non-aeronautical developments such as business and industrial parks particularly attractive.
Airports can also face stiff competition (both from one another and from off-airport developers) in seeking to advance projects of this nature. Moreover, some regional airports have the added disadvantage of having to comply with planning and development approval processes that are more demanding and time consuming than those confronted by other potential developers seeking to attract the same tenants.
Susceptibility to broader economic conditions There are many challenges facing the industry over the medium to long term, especially in the context of a strong currency, areas of weakness in the domestic tourism market and strong demand for air services from the resources sector. While the Australian economy has performed well in aggregate over recent years compared to other advanced economies, there has been considerable variation across both industries and geographic regions: >> Growth has been very strong in the resources sector, particularly Western Australia and Queensland; >> On the other hand, other non-mining trade exposed sectors such as manufacturing and — more critically to airports — tourism have shown weaker performance. Airlines are particularly volatile businesses being exposed to a range of largely uncontrollable risks such as terrorism, pandemics and natural disasters. Each of these risks have materialised at some time over the last decade having a disruptive impact on the international tourism market. And signs of a recent slowing in Chinese demand for Australia’s mineral resources have potentially major implications for the future of very many regional airports.
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Environmental pressures Some of the most frequently cited criticisms of airports allude to the impact of the aviation industry on local noise, the implications for pollution and the road-side congestion around airports. In addition, the airports which are most attractive to airlines tend to be those which are closest to major centres of population and business — these same airports are more susceptible to environmental and social costs. Avoiding or mitigating the environmental implications of airport development and operation poses major cost implications for many airports. But even at airports well away from residential developments, other environmental issues can have major impacts on the potential for an airport to better serve its community – for example, when environmental regulators oppose the lopping of increased vegetation that threatens to render current aviation operations unsafe, or the removal of vegetation that is necessary to allow access to an airport by larger aircraft seeking to provide better air services to the local community.
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Promoting a better understanding of regional airports Australia’s regional airports are a unique community resource of enormous value. However, they are also economically fragile. Inappropriate decisions by government owners and government regulators can readily impede the capacity of a regional airport to provide the vital services its community requires. Accordingly, an ongoing challenge for all airports is to ensure that the complexities and sensitivities of this situation are recognised and understood amongst the government owners and regulators, and amongst the broader community. In this endeavour, the breadth of the AAA’s membership within the Australian airport industry means that it is an invaluable resource for regional airports to communicate with all governments and government agencies with a need to consult within the industry to ensure that their policy and operation decisions are well informed and do not have unintended or unexpected adverse consequences.
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Australian Airports Association Unit 9/23 Brindabella Circuit I Brindabella Park ACT 2609 P: 02 6230 1110 F: 02 6230 1367 E:
[email protected]
www.airports.asn.au
