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Regional Aviation Services LEGISLATIVE COUNCIL Standing Committee on State Development Regional aviation services Ordered to be printed on 23 October 2014. Report 38 - October 2014 i LEGISLATIVE COUNCIL Regional aviation services New South Wales Parliamentary Library cataloguing-in-publication data: New South Wales. Parliament. Legislative Council. Standing Committee on State Development. Regional aviation services / Standing Committee on State Development. [Sydney, N.S.W.] : the Committee, 2014. – [xvi, 159] pages ; 30 cm. (Report / Standing Committee on State Development ; no. 38) Chair: Hon. Rick Colless, MLC. “October 2014”. ISBN 9781920788872 1. Airlines—Cost of operation—New South Wales. 2. Local service airlines—Cost of operation—New South Wales. 3. Aeronautics, Commercial—Passenger traffic—New South Wales. 4. Aeronautics, Commercial—Economic aspects—New South Wales. 5. Airports—Fees—New South Wales—Sydney Region. 6. Transportation—New South Wales. I. Title II. Colless, Rick. III. New South Wales. Parliament. Standing Committee on State Development. Report ; no. 38 387.742 (DDC22) ii Report 38 - October 2014 STANDING COMMITTEE ON STATE DEVELOPMENT How to contact the committee Members of the Standing Committee on State Development can be contacted through the Committee Secretariat. Written correspondence and enquiries should be directed to: The Director Standing Committee on State Development Legislative Council Parliament House, Macquarie Street Sydney New South Wales 2000 Internet www.parliament.nsw.gov.au Email [email protected] Telephone 02 9230 2641 Facsimile 02 9230 2981 Report 38 - October 2014 iii LEGISLATIVE COUNCIL Regional aviation services Terms of reference That the Standing Committee on State Development inquire into and report on the provision of aerial regular passenger transport (RPT) services to regional centres in New South Wales, and in particular: 1. Cost of access to Sydney Airport, regional New South Wales airports and other landing fields including: a) airport operator landing fees imposed at various airports and services and facilities included in those fees; b) methodology for calculating landing fees for different classes of aircraft. 2. Financial management and viability matters impacting on RPT operators, including: a) economics of operating various types of aircraft, including modern single engine turbine compared to older twin engine piston aircraft; b) impacts of compliance costs, including per passenger costs; c) suitability of “hub and spoke” systems for potential routes for smaller passenger numbers; d) the viability of passenger loading for different classes of aircraft. 3. Economic impact on regional communities of gaining or losing RPT services, including: a) the local business community; b) the impact on general aviation and regional airport management of the gain or loss of RPT services to regional centres; c) the potential for future economic development; d) impacts for local, state and Federal governments, including licencing arrangements for services less than 50,000 passengers per annum. 4. Potential for development of future modern RPT aviation including: a) opportunities for regional aviation manufacturing and servicing; b) the development and supply of sufficient numbers of trained and skilled aviation personnel; c) local, state and Federal government arrangements for staff travel; d) opportunities for dual use RPT services to include both freight and passenger legs on the same routes. 5. Any other matter relating to the provision of aerial regular passenger transport services. These terms of reference were referred to the Committee by the Hon Andrew Stoner MP, Deputy Premier, Minister for Trade and Investment, and Minister for Regional Infrastructure and Services on 6 December 2013.1 1 Minutes, Legislative Council, 13 May 2014, p 2495. iv Report 38 - October 2014 STANDING COMMITTEE ON STATE DEVELOPMENT Committee membership The Hon Rick Colless MLC The Nationals Chair The Hon Mick Veitch MLC Australian Labor Party Deputy Chair The Hon Catherine Cusack MLC Liberal Party The Hon Paul Green MLC Christian Democratic Party Mr Scot MacDonald MLC* Liberal Party The Hon Steve Whan MLC Australian Labor Party Committee Secretariat Ms Madeleine Foley, Director Mr John Young, Director Ms Donna Hogan, Principal Council Officer Ms Emma Rogerson, Council Officer Assistant Mr Chris Angus, Council Officer Assistant *Mr Scot MacDonald replaced Hon. Charlie Lynn as a member of the committee as of 14 May 2014. Report 38 - October 2014 v LEGISLATIVE COUNCIL Regional aviation services vi Report 38 - October 2014 STANDING COMMITTEE ON STATE DEVELOPMENT Table of contents Chair’s foreword xi Summary of recommendations xiii Glossary xvi Chapter 1 Introduction 1 Terms of reference 1 Conduct of the inquiry 1 Communication strategy 1 Submissions 1 Public hearings 2 Site visits 2 Report structure 3 Chapter 2 Regulatory framework 5 Federal regulation of aviation 5 Safety 5 Security 6 Pricing 6 Access to Sydney Airport 7 State licensing regime 8 Role of local government 12 Chapter 3 Regional aviation in New South Wales 13 Fluctuations in regular passenger transport services 13 Regular passenger transport providers and routes serviced 16 Charter air services 18 Committee comment 19 Committee comment 22 Trends in passenger numbers 22 Issues challenging airline operators 23 Regulatory and compliance costs 24 Airport charges 26 Access to Kingsford Smith Airport (Sydney Airport) 30 Airport infrastructure and facilities 31 Chapter 4 Sydney airports 33 Kingsford Smith Airport (Sydney Airport) 33 Report 38 - October 2014 vii LEGISLATIVE COUNCIL Regional aviation services Regulation of charges for regional aircraft at Sydney Airport 33 Committee comment 35 Regulation of aircraft movements 36 Committee comment 46 Bankstown Airport 49 Committee comment 53 Badgerys Creek 53 Committee comment 56 Chapter 5 Regional airports 57 Operation and classification of regional airports 57 Issues confronting airport operators 59 Committee comment 63 Innovations of regional airports to support operations 70 Committee comment 71 Airport fees for regular passenger transport 72 Committee comment 80 A regional approach to regular passenger transport services 81 Committee comment 82 Hub and spoke model 82 Committee comment 86 Chapter 6 Communities and regular passenger transport services 89 Community impacts 89 Committee comment 95 Chapter 7 Future directions for regional aviation 97 The changing fleet 97 Committee comment 100 Maintaining skilled aviation personnel 101 Committee comment 103 Freight and passenger services 103 Committee comment 104 Chapter 8 Role of government 105 Social obligation of government 105 Committee comment 106 Current government assistance 107 Issues with current funding models 110 Committee comment 112 Proposals for government assistance 113 Committee comment 117 Regulation and licensing 117 viii Report 38 - October 2014 STANDING COMMITTEE ON STATE DEVELOPMENT Committee comment 122 Strategic planning 123 Committee comment 124 Appendix 1 Submission list 127 Appendix 2 Witnesses at hearings 129 Appendix 3 Answers to questions on notice 134 Appendix 4 Tabled documents 135 Appendix 5 Minutes 136 Report 38 - October 2014 ix LEGISLATIVE COUNCIL Regional aviation services Tables Table 1 Airports served by airlines in New South Wales, 2005 13 Table 2 Examples of New South Wales Regional Airports Activity 14 Table 3 Regional New South Wales routes with regular passenger transport services withdrawn since 2002 15 Table 4 New South Wales regulated regional routes with regular passenger transport service 16 Table 5 New South Wales unregulated regional routes with regular passenger transport services 17 Table 6 Passenger statistics for New South Wales air routes to and from Sydney Airport from 2007-08 – 2012-13 22 Table 7 Sydney Airport Aeronautical Charges from 1 July 2014, inclusive of GST 34 Table 8 Comparison of regional and interstate services – value to Sydney Airport 42 Table 9 Code 3C Aerodrome - Airplane type and airplane characteristics 49 Table 10 Approved projects funded by Regional Airstrip Upgrade Program (RAUP) 108 x Report 38 - October 2014 STANDING COMMITTEE ON STATE DEVELOPMENT Chair’s foreword Australia has a rich and significant history in aeronautical research and aviation, dating back to the 1880’s when Lawrence Hargrave commenced his investigations into the feasibility of human flight. Hargrave developed the concept of the curved aerofoil, which remains as the standard wing shape of all aircraft flying today, and on 12th November 1894 he became the first man to be lifted off the ground utilising the curved aerofoil wing on a system of box kites tethered to the ground. This work was done at Stanwell Park, with the updraft towards Stanwell Tops providing the power to lift his kite and himself. Stanwell Tops is now one of the premier hang gliding sites in Australia, a fitting tribute to the early aeronautical work of Lawrence Hargrave. The first powered and controlled flight in Australia occurred in 1910 and the Australian Flying Corps (later the RAAF) was formed in 1912. In 1916 the AFC commenced service with the first complete squadron, 1 Squadron, engaged in the Middle East in early 1916 and three other squadrons operating on the Western Front later in 1916. Following Hargrave, there is a list of famous aviators and aviatrices that worked tirelessly to advance the cause of commercial aviation across Australia. Ross and Keith Smith, Hudson Fysh, Nancy Bird- Walton, Charles Kingsford-Smith, Charles
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