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AUSTRALIA’S REGIONAL FACTS, MYTHS & CHALLENGES

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 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 54 CONTENTS

ii AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES PUBLISHED NOVEMBER 2012 THE CHALLENGES 55

CHALLENGES FOR AUSTRALIA’S REGIONAL AIRPORTS 56

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 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 would appreciate any such instance being drawn to its attention. AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 1 ABOUT THE AUSTRALIAN AIRPORTS ASSOCIATION

The Australian Airports Association (AAA) is the There are a further 100 corporate partners national industry voice for airports in Australia. representing aviation stakeholders and The AAA represents the interests of more than organisations that provide goods and services to 260 airports and Australia wide – from the airport sector. The AAA facilitates co-operation local country community strips to major among all member airports and their many and international gateway airports. The AAA’s members varied partners in Australian aviation, whilst include , , , , contributing to an air transport system that is safe, Darwin, Gold Coast, Hobart, , and secure, environmentally responsible and efficient airports. for the benefit of all and visitors.

The AAA serves airports across the entire national If you have any questions regarding this document aviation infrastructure network. This includes: 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 ( operations only) »» Tier 7 Remote Community Aerodromes (exist for community service aviation: medical, emergency flights).

2 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES

EXECUTIVE SUMMARY SUMMARY EXECUTIVE & INTRODUCTION &

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 3 EXECUTIVE SUMMARY – KEY MESSAGES

There are over 2000 landing sites for The report also identified, but did not seek to put a aircraft in Australia. 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 While the majority of these are very small and private enable boosts the performance of other industries and sites not generally available for public use, this paper indeed the overall economy. identifies and discusses over 400 of the most significant While the preponderance of that economic benefit civilian airports in Australia, with particular emphasis on derives from only a handful of airports in the capital regional airports – that is, those other than the principal cities and major tourist destinations, the balance capital city airports. attributable to regional airports is still economically Australia’s airports are fundamentally a community significant and, perhaps more importantly, vital to asset: the social and economic life of Australia’s regional communities. >> Our biggest airports, while leased to and operated by the private sector, remain owned by the This paper identifies the range of aviation and non- Commonwealth Government; aviation activity that occurs at Australia’s regional >> The overwhelming majority of all other airports, and this alone emphasises how vitally Australian airports are owned and operated by important regional airports are to the communities the local government authority for the community they serve. they serve; Despite this importance and these benefits, however, >> Of those airports that are not government Australia’s regional airports face considerable owned, the majority are owned by, and operated challenges in maintaining, let alone growing, the predominantly for the purposes of, resource service they provide to their local communities: extraction corporations; and >> While some airports owned by a local government >> As many as 50% may be operating at a loss each authority may be operated by the private sector on year, and are heavily dependent upon cross- the authority’s behalf, only a handful of Australia’s subsidisation by their local government owners regional airports are both owned and operated by who face multiple and competing demands on the private sector for general public use. their limited finances. In these circumstances, developing non-aeronautical activity on-airport This paper seeks to bring together little known and can be essential in order to maintain future seldom recognised facts about Australia’s regional capacity for aeronautical activity. airports, to dispel various myths that circulate about >> The number of airports serviced by regular public them, and to catalogue the serious challenges that transport (RPT) has declined markedly over the regional airports face in meeting the future needs of years and trends in operations threaten to the communities they serve. further reduce this number in the future, risking A recent study conducted by Deloitte Access Economics increased isolation for many Australians in rural for the Australian Airports Association (AAA) showed and remote communities. that, in 2011, Australia’s airports generated a total >> While total RPT passenger movements at economic contribution of around $17.3 billion - Australia’s regional airports grew at a faster rate equivalent to around 1.2% of Gross Domestic Product. than at airports in the major cities between 2005 and 2010 when measured on a national average National employment at airports was estimated at basis, such figures disguise the volatility and approximately 115,200 full-time equivalent (FTE) unevenness that is apparent when airport-by- workers. airport 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 AS MANY degree of risk that assets may be “stranded”, as give no guarantee to continue to maintain RPT services either at current schedules, by current AS 50% OF size aircraft, or at all. >> While meaningful traffic figures for Australian AUSTRALIA’S 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 REGIONAL social and economic wellbeing of Australia’s regional communities, and yet both the general aviation (GA) industry and regional airports are under significant AIRPORTS pressure to remain operational and efficient. >> Operating an airport calls for specialist expertise that is particularly hard to recruit, train and maintain MAY BE in regional locations. >> Due to the tyranny of distance, the costs of maintaining and expanding regional airport OPERATING 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 AT A LOSS some particular specialist services even more. >> Costs of regulation are proportionately greater in the overall budget of regional airports than for EACH YEAR 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.

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 But the study also made clear that there are important (AAA) launched a major paper setting out the differences and distinctions between airports. Essentially, “no two airports are the same”. Among the results of a study of the economic and social key findings of the study are the following points of contribution of Australia’s airports, prepared particular relevance to Australia’s regional airports: by Deloitte Access Economics. >> Australia’s network of airports, across major urban centres and regional areas, form an integral part of the national economic infrastructure and are critical That study looks at all Australian airports and provides to connecting communities and enhancing broader an important insight into just how important all our economic performance. airports are to the Australian economy and community. >> More than almost any other country, Australia relies Just one finding of the study highlights this value: on an efficient and reliable aviation sector and In 2011, Australia’s airports generated a total airport network for its citizens to remain physically economic contribution of around $17.3 billion, ‘in touch’ with each other and the rest of the world. equivalent to around 1.2% of Gross Domestic >> There are around 250 airports which receive Regular Product. National employment at airports was Public Transport (RPT) services and many more estimated at approximately 115,200 full-time much smaller airfields and landing strips around the equivalent (FTE) workers. country, with reports of some 2000 across Australia.

6 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES >> Airports are capital intensive businesses, underpinned by their principal role as transport REGIONAL infrastructure providers. As such, airports are deeply linked into most economic activities, with these AIRPORTS PLAY A linkages increasingly driven by growth in leisure tourism and the regional expansion of strategic FUNDAMENTAL resource and agricultural activities. >> Airport infrastructure, whether terminal facilities or ROLE IN SERVING works, are among the most expensive forms of commercial and civil construction. BOTH THEIR LOCAL >> Beyond their immediate economic footprint, COMMUNITIES AND airports play an important social role in connecting individuals, families and communities with the rest THE AUSTRALIAN of the country and indeed the world. >> Airports provide vital services to their communities, ECONOMY MORE including the facilitation of mail and time sensitive freight deliveries, the Royal Flying Doctor Service, BROADLY 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 >> There has been a declining trend in the number of continued and sustainable development of a skilled regional airports with RPT services over the last two workforce for the industry. decades. Since 2005, RPT services have ceased at 45 >> Airports recognise their impact on local regional airports (mainly on lower density routes), communities and are increasingly participating while 25 airports have gained new RPT services. On in positive activities such as: environmental the other hand, the overall number of passenger sustainability initiatives; community engagement movements has increased over this period, from 8.5 programs; and the sponsorship of cultural, sporting million passengers to 22.5 million passengers. and charity events, to ensure they are acting as >> Annual growth in passenger movements is expected good corporate citizens within their communities. to average 3.3% for regional airports out to 2025. >> There are significant differences in the business Aircraft movements are expected to grow by 1.7% at orientation of regional and remote airports and that regional airports over this timeframe. of much larger airport operations. In many isolated >> On average, regulatory imposts are higher for parts of Australia, airports remain the only practical regional and remote airports, comprising around means of access to emergency and essential services 12% of total expenses, compared with about 4% for and therefore they tend to focus on principal major and major regional airports. transport infrastructure performance. >> Regional and remote airports generally have low While the 11 largest airports in Australia (all capital profitability, with around half of survey respondents city airports, plus Gold Coast, Cairns and reporting an operating loss in 2011. airports) account for about 87% of overall passenger traffic and make the greatest economic contribution in >> The majority of regional and remote airports (70%) terms of direct and indirect employment, the remaining are served by a single airline. “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 7 At the same time, key facts about our regional In large part the paper draws together data already airports are little known or seldom acknowledged, available from a variety of other sources, but seldom unjustifiable myths prevail and the challenges they available on a collected basis. In assembling this face are seldom recognised. collection, the AAA acknowledges its reliance on a number of important sources and, in particular: The aim of this paper is to establish a significant data source about Australia’s regional airports in the hope >> Deloitte Access Economics – Connecting Australia – that their value will be better recognised within the The economic and social contribution of Australia’s community, that those who directly or indirectly airports, June 2012; regulate airports will be better able to appreciate >> Publications of the Bureau of Infrastructure, and assess the likely impacts of the regulatory Transport and Regional Economics; and requirements they administer or impose, and that >> The Report of the General Aviation Industry Action those who ultimately own our regional airports will Agenda, 6 August 2008. better understand the challenges faced by those who operate their airports on their behalf. 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.

8 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES THE FACTS THE

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 9 AUSTRALIA’S AIRPORTS

There are, according to Airservices Australian airports are far from homogeneous and there Australia, over 2000 airports and are many other ways in which they can conceivably be categorised – for example, by location, ownership, airfields in Australia. operation, use, size or other factors.

The vast majority of the 2000+ are small, private grass They fall into four very broad categories: strips used predominantly by the owner of the land on which they sit and not available for public use – or >> Those generally known as the “privatised airports” at least not used by regular public transport (RPT) or – the major capital city and other significant charter aircraft. airports formerly operated by the Federal Airports Corporation1 but since leased by the Commonwealth It is beyond the capacity of this paper to identify and on a long-term basis to private sector companies describe each of Australia’s 2000+ airfields. Accordingly, which operate them commercially under a purpose- this paper focuses only on those that, because of designed regulatory regime embodied in the their role and importance within the civilian public Airports Act 1996 (Cth); transport network, might be viewed as the most >> State and (very predominantly) local government significant - although it is important to recognise that owned regional airports – while these are generally even the smallest and most remote airfield may be directly operated by their government owner, some vitally important to those whose lives, livelihood and are contracted to be operated by private companies enjoyment depend upon it. on behalf of the government owner and a small number are let on long term leases to private There are some 317 Australian airports which are companies that operate them commercially under certified (190) or registered (127) by the specific State airport regulation; Safety Authority (CASA) as having significant RPT or charter use or potential use. While certification >> Defence owned airports – while the primary or registration is essential for the operation of RPT purpose of Defence air bases is to support the services at an airport, many airports that do not attract generation, sustainment and deployment of RPT services nevertheless choose to incur the effort military capability to meet strategic tasking set by and cost to become registered so that the aircraft the and some of these are using them can have published what are known as operated exclusively for military purposes, there GPS approaches which are particularly important, for are five joint use airports which permit civil aviation example, to assist Royal Flying Doctor Service aircraft use under sub-leases to private sector airport operating in low visibility situations. operator companies - Darwin (NT), Curtin (Derby, WA), Learmonth (Exmouth, WA), Williamtown (Newcastle, NSW) and (Qld) – and where Defence provides , radar facilities and aviation rescue and fire fighting services to both military and civilian users; and >> Completely privately owned airports and airstrips.

1 ACT - Canberra; NSW - Sydney, , Camden; Qld - Brisbane, Gold Coast, Townsville, Cairns, Mackay, Archerfield, Mt. Isa; NT - Darwin, Alice Springs, ; Vic - Melbourne, Essendon, Moorabbin; Tas - Hobart, Launceston; SA - Adelaide, Parafield; WA - Perth, Jandakot

10 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES The following table lists those airports, and also >> Airports highlighted in pink are “privatised airports” indicates which are members of the AAA – - former Federal Airport Corporation airports still owned by the Commonwealth but leased to private >> CASA certified airports are able to be used by RPT or operators in privatisation process undertaken in the charter aircraft with more than 30 passenger seats; 1990s – importantly, these airports are subject to >> CASA registered airports have been checked and detailed and complex regulation under the Airports verified by a qualified person approved by CASA for Act 1996 that does not apply to other airports, use at least once a week by RPT or charter aircraft whether operated by government or commercial with more than 9 but not more than 30 passenger operators; seats; >> Airports highlighted in green are owned by, or >> Airports highlighted in blue are directly or indirectly principally operated to serve, resources companies owned by government or community bodies for the and located to serve their mining or other extraction benefit of the community they serve; 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.

Airport Name Airport Operator CASA CASA AAA Certified Registered Member Adelaide, SA Limited y y Albany, WA City of Albany y y Albury, NSW Albury City Council y y Alice Springs, NT Pty Ltd y y Alpha, Qld Barcaldine Regional Council y y Ararat, Vic Ararat Rural City Council Y Archerfield, Qld Corporation y y Argyle, WA Argyle Diamond Limited Y Armidale, NSW Armidale Dumaresq Council y y Aurukun, Qld Aurukun Shire Council y Avalon, Vic Australia Pty Ltd y y Ayers Rock, NT ILC Tourism Pty Ltd y y , Vic East Gippsland Shire Council y y Balgo Hill, WA Wirramanu Aboriginal Community y Ballarat, Vic City of Ballarat y y Ballera, Qld Santos Limited y Ballina/Byron Gateway, NSW Council y y Balranald, NSW Council y Bankstown, NSW Limited y y

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 11 Airport Name Airport Operator CASA CASA AAA Certified Registered Member Barcaldine, Qld Barcaldine Regional Council y y Barimunya, WA Barimunya Joint Venture y Barrow Island, WA Bristow Helicopters Australia Pty Ltd y Bathurst, NSW Bathurst Regional Council y y Bathurst Island, NT Tiwi Island Local Government y 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 y Blackwater, Qld BM Alliance Coal Operations y Boolgeeda, WA Hamersley Iron Pty Ltd y Boulia, Qld Boulia Shire Council y Bourke, NSW Council y y Bowen, Qld Whitsunday Regional Council y y Brewarrina, NSW Council y Brisbane, Qld Corporation y y Brockman, WA Pilbara Iron (Company Services) Pty Ltd y , NSW Council of the City of Broken Hill y Bronzewing, WA Navigator (Bronzewing) Pty Ltd y Broome, WA Broome Y y Bunbury, WA Bunbury City y Y Bundaberg, Qld Bundaberg Regional Council y y , Qld Burke Shire Council y Busselton, WA Busselton Shire Council y y Cairns, Qld Pty Ltd y y Camden, NSW Camden Airport Ltd y Camooweal, Qld City Council y Canberra, ACT 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

12 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Airport Name Airport Operator CASA CASA AAA Certified Registered Member Charleville, Qld Murweh Shire Council y y 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 y Clermont, Qld Isaac Regional Council y Cleve, SA District Council of Cleve y y Cloncurry, Qld Cloncurry Shire Council y Cobar, NSW Council y y Cocos (Keeling) Island ITNL Holyman Shipping Services Pty Limited y y Coen, Qld Cook Shire Council y y , NSW Coffs Harbour City Council y y Condobolin, NSW Council y Coober Pedy, SA District Council of Coober Pedy y y Cooktown, Qld Cook Shire Council y y Coolah, NSW Coolah Shire Council y y Cooma-Snowy Mountains, NSW Snowy Mountains Airport Corporation Y Coonabarabran, NSW Council y y Coonamble, NSW 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 y Cowra, NSW Council y y 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 y Degrussa, WA Sandfire Resources NL y Deniliquin, NSW Deniliquin Council y y Derby, WA Shire of Derby West Kimberley y y

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 13 Airport Name Airport Operator CASA CASA AAA Certified Registered Member Devonport, Tas Tasmanian Ports Corporation Pty Ltd y 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 y Dysart, Qld BHP Billiton Mitsubishi Alliance Y East Jaurdi, WA Polaris Metals Pty Ltd y Echuca, Vic Shire of Campaspe y 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 Pty Ltd y y Fitzroy Crossing, WA Shire of Derby West Kimberley y y Flinders Island, Tas Flinders Council y y Forbes, NSW Council y Forrest, WA Fayburn Pty Ltd y 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 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 Council y y Gold Coast, Qld Pty Limited y 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 y y Granny Smith, WA Barrick(Granny Smith) Pty Ltd y Griffith, NSW Griffith City Council y y

14 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Airport Name Airport Operator CASA CASA AAA Certified Registered Member Groote Eylandt, NT Groote Eylandt Mining Company Pty Ltd y Gunnedah, NSW Council y y Halls Creek, WA Management Services Pty Ltd y y Hamilton, Vic Southern Grampians Shire Council y y Hamilton Island, Qld Great Barrier Reef Airport Pty Ltd y y Hay, NSW Council y 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 y Innisfail, Qld Johnstone Shire Council y Inverell, NSW Council y y Jabiru, NT Energy Resources of Australia y Jacinth Ambrosia, SA Iluka (Eucla Basin) Pty Ltd y Jandakot, WA Holdings Pty Ltd Y y Julia Creek, Qld McKinlay Shire Council y Kalbarri, WA Shire of Northampton y Kalgoorlie-Boulder, WA City of Kalgoorlie-Boulder y 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 y Karumba, Qld Carpentaria Shire Council y Katanning, WA Shire of Katanning y Kempsey, NSW 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

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 15 Airport Name Airport Operator CASA CASA AAA Certified Registered Member Kowanyama, Qld Kowanyama Community Council y y Kununurra, WA Shire of Wyndham East Kimberley y y Lake Cargelligo, NSW Lachlan Shire Council y y Lake Evella, NT Gapuwiyak Community Inc y Latrobe Valley, Vic Latrobe City Council y 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 y Leinster, WA BHP Billiton Nickel West Pty Ltd y Leongatha, Vic Leongatha Aerodrome Users Pty Ltd y Leonora, WA Shire of Leonora y y Lightning Ridge, NSW Council y y Lismore, NSW Lismore City Council y y Lockhart River, Qld Lockhart River Aerodrome Company Pty Ltd y Longreach, Qld Pty Ltd y y , NSW Lord Howe Island Board y y Loxton, SA District Council of Loxton Waikerie y Mackay, Qld Pty Ltd y y 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 , Qld Tablelands Regional Council y y Maryborough, Qld Fraser Coast Regional Council y y Maryborough, Vic Central Goldfield Shire Council y y 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 , Vic Mildura Rural City Council y y Milingimbi, NT Milingimbi Community Council Inc y

16 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Airport Name Airport Operator CASA CASA AAA Certified Registered Member Moomba, SA Santos Limited y Moorabbin, Vic Corporation Pty Ltd y y Moranbah, Qld BM Alliance Coal Operations y Morawa, WA Shire of Morawa y Moree, NSW Council y y Mornington Island, Qld Mornington Shire Council y Moruya, NSW 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 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 y Murrin Murrin, WA Minara Resources Limited y Naracoorte, SA Naracoorte Lucindale Council y y Narrabri, NSW Council y y Narrandera, NSW Council y y Narromine, NSW Council y y Newman, WA Shire of East Pilbara y y Ngukurr, NT Yugul Mangi Community Government Council y Nifty, WA Birla Nifty Pty Ltd y , NSW Administration of Norfolk Island y Normanton, Qld y y Northern Peninsula, Qld Northern Peninsula Area Regional Council y Nyngan, NSW 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 Communities Authority y Orange, NSW Orange City Council y y Orbost, Vic East Gippsland Shire Council y y Osborne Mine, Qld Ivanhoe (Osborne) Pty Ltd y

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 17 Airport Name Airport Operator CASA CASA AAA Certified Registered Member Palm Island, Qld Palm Island Aboriginal Shire Council y y Paraburdoo, WA Pilbara Iron Pty Ltd y y Parafield, SA Limited y y Parkes, NSW Council y y Perth INTL, WA Pty Ltd y y Plutonic, WA Barrick (Plutonic) Limited y Pooncarie, NSW Council y 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 y 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 y y Prominent Hill, SA Oxiana Prominent Hill Operations Pty Ltd y y Proserpine/Whitsunday Coast, Qld Whitsunday Regional Council y Quilpie, Qld Quilpie Shire Council y Quirindi, NSW Council y y Ramingining, NT Ramingining Community Council Inc y Ravensthorpe, WA Shire of Ravensthorpe y Renmark, SA District Council of Renmark Paringa y Richmond, NSW Richmond Shire Council y Robinvale, Vic Swan Hill Rural Shire Council y y , Qld Rockhampton Shire Council y y Roma, Qld Maranoa Regional Council y , WA Rottnest Island Authority y Saibai Island, Torres Strait Saibai Island Community Council y Saint Arnaud, Vic Northern Grampians Shire Council y y Saint George, Qld Balonne Shire Council y Saint Helens, Tas Break O’Day Council y Scone, NSW Council y y Sea Lake, Vic Buloke Shire Council y Shark Bay, WA Aspen Monkey Mia Pty Ltd y

18 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Airport Name Airport Operator CASA CASA AAA Certified Registered Member Shay Gap, WA BHP Billiton Iron Ore Pty Ltd y Shepparton, Vic Shepparton City Council y y Smithton, Tas Department of Infrastructure Energy and y Resources Snake Bay, NT Tiwi Island Local Government y Solomon, WA Fortescue Metals Group Ltd y 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 y Sunrise Dam, WA Anglogold Ashanti Australia Ltd y Swan Hill, Vic Swan Hill Rural City Council y y Sydney (Kingsford Smith) INTL, NSW 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 Council y y Tennant Creek, NT Pty Ltd y y 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, y Planning and Natural Resources Tocumwal, NSW Council y Toowoomba, Qld Toowoomba Regional Council y y Townsville, Qld 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

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 19 Airport Name Airport Operator CASA CASA AAA Certified Registered Member Tumby Bay, SA District Council of Tumby Bay y Tumut, NSW Tumut Shire Council y y Wagga Wagga, NSW Wagga Wagga City Council y y 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 Council y y Warrnambool, Vic Warrnambool Shire Council y y Warwick, Qld Southern Downs Regional Council y , Qld RTA Weipa Pty Ltd y y Wentworth, NSW Wentworth Shire Council y West Angelas, WA Robe River Mining Co Pty Ltd y West Sale, Vic Shire Council y y West Wyalong, NSW Council y y Wilkins Australian Antarctic Division y Whyalla, SA Corporation of the City of Whyalla y y Wiluna, WA Wiluna Shire Council y Windarling, WA Portman Iron Ore Limited y Windorah, Qld Barcoo Shire Council y 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 Corporation Pty Ltd y y Yarram, Vic Wellington Shire Council y y Yarrawonga, Vic Moira Shire Council y Yorke Island, Torres Strait Yorke Island Community Council y Young, NSW Young Shire Council y

20 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES In addition to the above certified and registered These other airports are listed in the following table, airports, AAA members operate a number of other where again: airports that are not required to be either CASA >> Airports highlighted in blue are directly or indirectly certified or CASA registered - whether because of their owned by government or community bodies for the Defence ownership or because the scope of operations benefit of the community they serve; is below the threshold requiring certification or registration. >> 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 *, 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 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 Airport Airport Operator AAA Member 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 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 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

22 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 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

*  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 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 The ALOP airports are as follows: 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 Albury Gilgandra Nyngan although leased to and operated by private sector Armidale Glen Innes Orange companies, some hundreds of Australia’s regional, Ballina Goodooga Parkes rural and remote airports were originally established by the Commonwealth for its armed forces. When Balranald Goulburn Pooncarie no longer required for those purposes, these airports Baradine Grafton Port Macquarie were gradually transferred to the ownership of the Bathurst Griffith Quirindi relevant local government authority under Aerodrome Bourke Gunnedah Scone Local Ownership Plans (ALOP) or sold to private interests. This is far more than a matter of historical Brewarrina Hay Schofields interest, because the ALOP agreements under which Broken Hill Hillston Tamworth these transfers took place impose obligations on the Burren Junction Inverell Taree recipient local government to maintain and operate Carinda Ivanhoe Temora the airport as an airport. Casino Kempsey Tibooburra Cessnock Lake Cargelligo Tocumwal Cobar Lightning Ridge Tooraweenah Coffs Harbour Lismore Tottenham Collarenebri Lord Howe Island Tumut Condobolin Merimbula Wagga Wagga Coolah Moree Walgett Cooma Moruya Warren Coonabarabran Mudgee Wee Waa Coonamble Mungindi West Wyalong Cootamundra Narrabri White Cliffs Cowra Narrandera Wilcannia Deniliquin Narromine Wollongong Dubbo Newcastle Young Evans Head Norfolk Island

Northern Territory Borroola Groote Eylandt Tindal Gove Jabiru Yulara

24 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Alpha Doomadgee Monto Burnie/Wynyard King Island St Helens Aramac Dysart Moranbah Devonport Queenstown Strahan Atherton Emerald Mornington Flinders Island Smithton Aurukun Eromanga Island Ayr Eulo Mt Coolon /Injoo Gayndah Mt Garnet Ararat Horsham Sea Lake Barcaldine Georgetown Muttaburra Bacchus Marsh Kerang Shepparton Bedourie Goondiwindi Normanton Bairnsdale Latrobe Valley St Arnaud Birdsville Gregory Downs Oakey Ballarat Leinster Stawell Blackall Gympie Pormpuraaw Benalla Leongatha Swan Hill Blackwater Harvey Bay Quilpie Bendigo Mallacoota Wangaratta Bollon Hughenden Redcliffe Birchip Maryborough Warracknabeal Boulia Ingham Richmond Corryong Mildura Warrnambool Bowen Injune Rockhampton Donald Nhill West sale Bundaberg Innisfail Roma Echuca Orbost Wycheproof Burketown Isisford St George Hamilton Portland Yarram Julia Creek Stanthorpe Hopetoun Robinvale Charleville Jundah Stonehenge Charters Towers Karumba Tara Western Australia Chillagoe Kingaroy Taroom Chinchilla Kowanyama Thargomindah Albany Geraldton Newman Clermont Lockhart River Theodore Balgo Hill Halls Creek Norseman Cloncurry Longreach Broome Kalbarri Nullagine Coen Magnetic Island Toowoomba International Kununurra Onslow Collinsville Mareeba Weipa Bunbury Laverton Paraburdoo Cooktown Maroochydore Windorah Carnarvon Learmonth Port Hedland Croydon Maryborough Winton Cue Leonora Rottnest Island Cunnamulla Middlemount Wondai Cunderdin Marble Bar Southern Cross Dajarra Miles Wyandra Curtin Meekatharra Wiluna Dalby Mitchell Derby Mt Magnet Wittenoom Dirranbandi Monto Esperance Mullewa Wyndam Fitzroy Crossing Ceduna Leigh Creek Port Augusta Cleve Loxton Port Pirie Coober Pedy Maria Renmark Cowell Marree Streaky Bay Gawler Millicent Waikerie Kimba Minnipa Whyalla Kingscote Naracoorte Wudinna

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 25 The agreements under which those airports were So, what’s it all mean? transferred to local government ownership include clauses which require, for example, that the local As will be readily apparent from the highlighting in the government body: tables above, Australia’s airports are fundamentally “(a) shall operate and maintain the aerodrome, open a community asset: to the public, in compliance with Civil Aviation >> Our biggest airports, while leased to and operated Regulations … by the private sector, remain owned by the (b) shall be solely responsible for developing, Commonwealth Government; operating and maintaining the aerodrome >> The overwhelming majority of all other Australian including visual aids and associated equipment airports are owned and operated by the local to [CASA] standards ... government authority for the community they serve; (c) shall permit open, unrestricted and non- >> Of those airports that are not government discriminatory access to the aerodrome by owned, the majority are owned by, and operated airline and aircraft operators on reasonable predominantly for the purposes of, resource terms and conditions, consistent with the extraction corporations; and physical limitations of the aerodrome >> While some airports owned by a local government … authority may be operated by the private sector on (e) shall be responsible for the safety of the the authority’s behalf, only a handful of Australia’s aerodrome … regional airports are both owned and operated by the private sector for general public use. (f) shall be responsible for the security of the aerodrome … Because they are a community resource, it is not only (g) shall take such as is within its power to important that the community recognise the value this prevent the restriction of aircraft operations provides but also that all levels of government and all to and from the aerodrome by objects, such government regulators take care that their custody and as buildings, other structures, trees or other regulation of airports do not jeopardise the value that natural objects … they provide to the communities they serve. (h) shall take such action as is within its power to: It is also apparent from the above tables that a (I) create land-use zoning around the resounding majority of the listed airports are members aerodrome which will prevent residential of the AAA: and other incompatible development in >> the Association’s airport members own and/or areas which are, or may be, adversely operate 249 of Australia’s most important airports; affected by aircraft noise; >> AAA members operate 113 of the 190 certified (ii) prevent the introduction of activities likely airports and, of the remaining 77, 44 are operate by to create a hazard to aircraft …”. resource companies and are essentially not part of the public transport network while the balance are Importantly, the agreements as they currently apply understood to carry very low traffic volumes; and allow the local government body to sell, lease or >> registered airports whose operators are not AAA otherwise dispose of the airport only with the consent members are also understood to carry very low of the Secretary of the Department of Infrastructure traffic volumes. and Transport where the alternative use of the airport would result in the closure of the airport or result in it The breadth of the AAA’s membership within the no longer continuing to operate as an airport. Australian airport industry means that it is an invaluable resource for all Governments and government agencies These clauses are essentially the same as those in the with a need to consult within the industry to ensure Airports Act leases for the “privatised airports”, and that their policy and operation decisions are well place heavy and ongoing obligations on affected local informed and do not have unintended or unexpected government bodies. adverse consequences.

26 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES REGIONAL AIRPORTS A QUESTION OF DEFINITION

A threshold question for any review Different industries adopt different definitions of this and related terms – for example, in of regional airports is – what airports telecommunications, “regional” is generally used are “regional”? 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 >> Charter flights by large long-distance aircraft bring airport is associated with work or leisure on a significant numbers of overseas visitors to Australia’s scheduled RPT flight between one of the major capital major leisure destinations, adding to the growth city airports and either an overseas destination, another of a tourism industry already supported through capital city airport or, perhaps, a major Australian domestic and international RPT flights. tourist destination such as the Gold Coast. >> Charter and private flights on smaller aircraft allow But while such travel is statistically predominant, the business and leisure travel of Australians to and there are numerous other forms of aviation activity at from smaller airports where it is not economical for Australian airports that are of vital importance to the commercial airlines to operate RPT services. Australian community and economy. >> Air services keep Australians in touch with one another and the world, because they are frequently It is common for aviation observers to categorise used to deliver the mail and our daily newspapers. aviation activity along such lines as “RPT”, “charter”, >> While they may no longer be defence bases, very “GA” and “sport/recreation”. While these terms are many regional airports support Australia’s defence commonly used, they are not always helpful. The term force activity – in the 12 month period June 2011 “GA”, in particular, fails to convey the great breadth of to May 2012 there were at least 7000 arrivals or activity and community service that Australia’s aviation departures by aircraft at at industry delivers. least 103 civilian Australian airports. The following indicates how diverse aviation activities >> Particularly in regional Australia, airports play an at regional airports can be: essential role in saving lives by facilitating medical >> RPT, charter and private flights from Australia’s evacuations, collection and delivery of organ donations regional, rural and remote airports allow those who and . work and live outside the major cities to access –– For example the Royal Flying Doctor Service the specialist health, education, commercial and (RFDS) is a non-for-profit organisation which recreational facilities that are not economically offers health care to those people who are available where they normally reside, allow travel by unable to access a hospital or basic general health professionals to the regional community, and practices due to their extreme geographic enable regional residents to maintain and enjoy the isolation. Currently, the RFDS has over 60 pleasure of their relationships with distant families aircraft, operating out of 23 bases in all States and friends. and the . The RFDS predicates >> RPT and charter flights allow the more efficient its operations on the availability of airport development of Australia’s natural resources, weekly or airstrip networks in outback locations bringing many thousands of “fly-in, fly-out” (FIFO) throughout Australia. In 2011, the RFDS workers to distant mines and development sites from undertook nearly 76,000 flights, taking over both capital cities and other regional centres. In 2011, 80,000 hours and spanning a distance of close approximately half of the 90,000 people employed in to 27 million kilometres. These services have the Western Australian mining industry participated become of even higher importance in light of in FIFO arrangements, where they live in a city the growing number of mining workers residing and fly in to a remote workplace during their work in rural parts of Queensland and Western roster. It is not only the airports owned and operated Australia. by resources companies that facilitate Australia’s >> Law enforcement bodies, such as the Western participation in the world trade in minerals, but also Australia Police Air Support, and border protection general purpose airports such as those at Karratha in agencies operate out of Australia’s regional airports, Western Australia and Emerald in Queensland. particularly in Northern and Western Australia. >> Regional air services support the attraction of staff >> Australia’s regional airports also play a vital role in to, and their retention in, regional and remote protecting Australia’s physical assets – enabling fire- communities by minimising the isolation that can be fighting in areas where road transport is impossible involved in working away from family and friends. or would be too late.

28 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES >> Australia’s vegetable and animal produce is –– Jandakot Airport, where almost 70% of total significantly enhanced by aerial agriculture services aircraft movements are flying training, is like crop dusting and mustering operated from the training base for pilots for a number of regional airports. international airlines and training schools >> Freight services to and from airports allow many including the Royal Aero Club (Inc), businesses to operate “just-in-time” inventories and Southern West Australian Flying College and access markets for often high-value or time-sensitive Flying College. products. >> Regional airports may be designated for diversion of >> Australia’s regional airports offer facilities for pilot domestic or international flights when their capital training both for those who wish to fly privately city destination becomes unavailable for reasons and for those who wish to earn their living flying such as the onset of severe weather – for example commercially in Australia or overseas. A number of in has regional airports provide flexible training facilities the capacity to handle international passenger and that do not conflict with the flight paths of capital airfreight operations by aircraft. city airports, while minimising the noise impacts in >> Regional airports may also provide a resource to densely populated areas. For example: enable airlines to support their national route –– Tamworth Regional Airport is host to BAE operations – for example, Tamworth Regional Systems Flight Training Australia, which Airport is home to QantasLink’s heavy maintenance conducts flight screening and the first stage of base for Dash-8 aircraft. flight training for all Australian Defence Force >> Aerial survey and aerial photography activity often pilots. It also has flight screening contracts requires access to regional airports. with the Republic of Singapore Airforce and the >> Australian airports generally, and not just those Royal Brunei Airports, under which it provides owned or operated by aero clubs, allow many facilities and aircraft, and it hosts training thousands of Australians to enjoy the pleasures of courses in aircraft mechanics and engineering sport and recreational flying. through the Australasian Pacific Aeronautical The exact mix of these diverse aviation activities at College. each Australian airport varies to meet the needs of the –– The Australian Airline Pilot Academy at Wagga particular community which the airport exists to serve. 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.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 29 OTHER ACTIVITIES AT REGIONAL AIRPORTS

Airports are not passive assets but must >> such as passenger and checked be actively and expertly managed and bag screening may be required by law, or simply demanded by aircraft operators concerned to operated. protect their aircraft on the ground; >> Passenger facilities for check-in, awaiting departure In order to allow core aviation activities to occur at any and collection on arrival must be provided; airport, a range of aeronautical-related facilities and >> Car-parking areas need to be provided and support services may be required: maintained; >> Airport runways and taxiways need to be not >> Facilities may be required to be provided for only established and kept free of debris but also regulatory and community services such as Police, maintained to the requisite standard – and, if traffic Customs, Quarantine, Immigration, CASA and grows, these may need to be enlarged, strengthened ; or replaced, particularly where heavier aircraft seek >> Facilities for refuelling aircraft may be required; to use the airport; >> On-airport aviation-related businesses separate >> Wildlife incursions into aircraft operational areas from the airport operator, such as those providing need to be managed in an environmentally sensitive and repairs, may require either manner; site leases to construct their own premises or the >> Airport lighting and other aids to navigation need provision of airport-owned buildings and other to be operated and maintained to ensure safe air facilities. navigation; Additionally, and increasingly, passengers expect >> Airport rescue and fire-fighting services may be airports to ensure that a range of other non- mandatorily required and an Airport Emergency aeronautical facilities and services are available to Plan is required for all certified airports; facilitate or enhance their travel experience, including: >> A statutory Drug and Alcohol Management Plan >> Cafes, bars and other retail facilities; must be developed and implemented in respect of safety sensitive airport personnel at certified and >> Luggage trolleys; or registered airports; >> 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.

30 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES RUNNING A REGIONAL AIRPORT

As noted before, airports are not passive Moreover, because activity levels at regional airports assets but must be actively and expertly are often at relatively low levels, airports generally have to seek staff who are each skilled in multiple disciplines. managed and operated. 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 They are also extremely expensive to construct and demands they each bear. maintain - this is particularly the case in remote locations.

This means that running a regional airport is demanding, Money both from a commercial perspective and from a technical The cost of just keeping an established airport “ticking perspective. 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 Skills no pressing maintenance issues (like periodic tarmac Shortly stated, running an airport (no matter how overlays) can readily run to $250,000 per annum (and small) requires significant skills and relatively significant even that may not be a full accrual cost that takes amounts of money. account of all the synergies and interdependencies that can occur in an organisational environment where the Some of the required skills are common to many other airport may receive some services from other council businesses – general administration skills, project departments like cleaning). planning and management skills, negotiation skills, etc. – but even so these skills need to be exercised in And if that basic GA airport were to be upgraded so the particular aviation context. This requires a sound that it was capable of receiving Dash 8 RPT services understanding of the dynamics of a complex industry or similar, the new 1600m x 30m runway alone could with numerous and markedly different sub-markets. readily cost $20+million if the airport were reasonably close to a capital city – but, if the airport were in In addition to the need for commercial expertise in remote Australia, this figure could easily rise by 1.5 to managing capital and operational expenditure, airport 3.5 times. management needs high levels of airport specific technical skill – not just to operate the airport’s physical Indeed, for regional airports, the tyranny of distance assets but to meet the diverse requirements of the compounds not only costs but also the complexity many government agencies that regulate airport of project implementation. Needing to undertake activity. engineering works at an airport is one thing, but finding a company with the requisite capability is another. For Airports require skilled staff such as reporting officers, example: works safety officers and aircraft guidance, lighting >> There are no asphalt batching plants available maintenance, wildlife management and pavement outside Perth, so the cost of mobilising a skilled repair staff. Staff with these airport-specific skills are workforce could be in excess of $100k before works often hard to recruit, train and retain – especially in commence; regional airports. >> Bitumen crews are often only available as they And airport safety, security and environmental pass through a series of regional towns and thus regulation is inherently complicated and requires high co-ordination between those crews and other local levels of knowledge and skill in applying complex laws companies involved in the works is critical and does in the context of the individual airport. not always align;

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 31 >> Moreover a premium is always paid - conducting These commercial decisions confronting a regional any works above the 26th Parallel comes with a airport are not only complex but also vitally important significant increase in costs. In the Pilbara this can to the local community. If the airport operator is not be in the order of up to 50% and in the Kimberley prepared to take the inherent risks involved, the local 30%+; community may be left without RPT services that >> Staffing is also a key issue. Overlays and works on might power its broader economic development from runways do not happen often at regional airports tourism, resources development or other industries. compared to capital city airport. In the local Coping with increased traffic brings additional government environment the local engineer is management and financial demands. For example: often assigned this function but is unlikely to have exposure to airfield operations and the differences >> , owned and operated by the Shire in such things as spray rates. A runway is not a road. of East Pilbara has experienced a 35% increase in its It has specific needs and outcomes related to RPT schedule in recent months, with services now aircraft safety that may not be understood; operated by , QantasLink, Virgin and Skywest, >> And finally, the risk of bitumen being transported and also has Alliance, Network, Skippers and 2,500km is also problematic in that it can Karratha Flying Services operating scheduled closed deteriorate over these distances. charter services. As a result it has been required to introduce a slot booking system to reduced Airports are designed and constructed to meet the congestion on its RPT apron and in its terminal (on future use to which they are expected to be put. The which it spent $7.6 million in 2009). Indeed, the high cost of acquiring land and building runways, Shire has spent over $28 million on capital works at taxiways and other infrastructure necessarily dictates the airport since 2008. that great care must be taken in predicting future >> Dubbo Airport, where RPT passenger numbers grew operational requirements so that what are generally by a more modest 13.5% over the five years 2005/6 public funds are not “sunk” in assets that may not to 2010/11 has had to spend over $9 million on be required. Predicting future use is inherently capital works since 2000/01 and has a further $14 difficult and uncertain, because aviation is so strongly million or so forecast for the 2012/13 to 2021/22 influenced by general economic conditions and often period, including over $1 million on security alone. 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.

32 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES REGULATION OF AUSTRALIAN AIRPORTS

Australian airports are subject to a And, even in areas where there is a national regulatory particularly high level of government regime, the requirements of that regime may be quite “granular” so that airports with different characteristics regulation across a diverse range of fields are subject to markedly different regulatory and by a diverse range of regulators. 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 Some of these are common to all Australian airport operations may be comparatively minor. commercial businesses, such as: Ascertaining precisely what laws apply to a particular >> The Corporations Law, administered by airport can also be a complex matter. For example, the Australian Securities and Investments the “privatised airports” remain owned by the Commission; Commonwealth and thus the Commonwealth Places >> Trade practices and consumer protection laws, (Application of Laws) Act 1970 is instrumental in administered by the Australian Competition and determining whether and to what extent local laws Consumer Commission and State and Territory apply to a privatised airport in a particular State. While Offices of Fair Trading; that Act sets out the general proposition that “the >> Occupational Health and Safety laws, provisions of the laws of a State … apply … in accordance administered by various Commonwealth, State with their tenor… in relation to each place in that State and Territory regulators; that is … a Commonwealth place …”, that proposition is subject to a number of important qualifications that can >> Workplace relations laws, administered by make its precise application difficult. various Commonwealth, State and Territory regulators; and The following sets out a brief overview of how various >> Disability discrimination laws. 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.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 33 Civil Aviation Safety Authority >> At certified and registered airports, monitoring of obstacles is the responsibility of the airport operator CASA is the Commonwealth regulator with primary (but while at other airports this is the responsibility of not exclusive) responsibility for aviation safety, including the aircraft operator; and for the operation of airports. It categorises airports by >> Precision instrument approaches are available at reference to the passenger carrying capacity of aircraft certified and registered airports but not at others. that use them: >> A certified airport is one which a) has a runway that Where an Aerodrome Manual is required, it must cover is suitable for use by aircraft having: such matters as: (i) a maximum passenger seating capacity of more >> The airport’s Aerodrome Emergency Plan; than 30 seats; or (ii) a maximum carrying capacity >> Aerodrome lighting; of more than 3400 kilograms; and (b) is available for >> Aerodrome Reporting; use in regular public transport operations or charter operations by such aircraft. >> Unauthorised entry to the airport; >> An airport that does not meet those requirements >> Aerodrome serviceability inspections; may apply to be registered by CASA if it has been >> Aerodrome technical inspections; inspected by a person approved by CASA and found >> Aerodrome works safety; to meet certain prescribed requirements, which >> Aircraft parking control; include various of the requirements that must be met by certified airports. >> Airside vehicle control; >> Other requirements apply to an airport that is not >> Bird and animal hazard control; a certified or registered airport but is used at least >> Obstacle control; once a week by an aircraft that is engaged in regular >> Disabled aircraft removal; public transport operations or charter operations >> Handling of hazardous materials; and has a maximum passenger seating capacity of >> Protection of radar and navigational aids; and more than 9 seats but not more than 30 seats. >> Low visibility operations. >> And finally other requirements apply to an airport when used at least once a week by an aircraft that Certified and registered airports are also required to is engaged in regular public transport operations or have a Drug and Alcohol Management Plan (DAMP) charter operations with a maximum take-off weight and to apply it in respect of any of their employees who (MTOW) not exceeding 8618 kg, and fitted with a undertake specified “safety sensitive aviation activities”, passenger seat configuration of not more than 9. but operators of other airports are not.

Depending upon which category an airport falls into, it Most significantly, CASA is authorised to determine a will be subject to differing regulatory requirements. For Manual of Standards (MOS) that sets out very detailed example: standards that airports must comply with in relation to >> A certified airport is required to have an Aerodrome the operation of their airports. CASA periodically audits Manual, a Safety Management System, and the compliance by airports with the MOS and other an Aerodrome Technical Inspection but other regularity requirements, and can initiate legal action categories are not; where required. >> A registered airport and an airport in the third As will be apparent from the above brief description, category above is required to have an Aerodrome whenever an airline proposes to change the nature Safety Inspection, but an airport in the fourth of the air services it provides to and from a particular category is not; airport, this has the potential to change the CASA >> Airports in the first three categories must have a categorisation of the airport and move it into a more trained Reporting Officer, but not those in the fourth tightly regulated category. There may be considerable category; expense and effort required for an airport to meet >> Details of certified and registered airports must the increased regulatory burden so that it can agree be published in the Airservices Australia En Route to meet the airline’s proposal, and yet the airline will Supplement Australia (ERSA) and Notice To Airman generally not be prepared to undertake to maintain (NOTAM) publications, but not those for the other the new air services that necessitate that expense and two categories; effort on an ongoing basis.

34 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Office of Airspace Regulation The operation of particular aircraft or take-off or landing paths at a particular aerodrome on occasions provokes The Office of Airspace Regulation (OAR) is a distinct complaints about associated noise. While these are operational unit within CASA and is responsible for often directed to or against the airport operator, noise regulating Australian airspace. is seldom generated by or subject to the control of the airport operator. In line with the International Civil Aviation Organization (ICAO) Annex 11 and as described in the Australian The Government has established an Aircraft Noise Airspace Policy Statement (AAPS), Australian airspace Ombudsman (ANO) to: is classified as Class A, C, D, E and G depending on >> Oversee the handling of aircraft noise enquiries the level of service required to manage traffic safely and complaints; and efficiently. Class B and F are not currently used in Australia. The classification determines the category >> Conduct independent reviews of noise of flights permitted and the level of air traffic services complaints handling; and (ATS) that must be provided. >> Make recommendations for improvements where necessary. Within this classification system, airspace and aerodromes are either controlled (i.e. Class A, Class C, While the ANO is independent of Airservices Australia’s Class D or Class E) or non-controlled. Non-controlled executive management structures, it reports directly aerodromes in Australia are subject to Common Traffic to its board on performance in regard to aircraft noise Advisory Frequency (CTAF) procedures. Pilots of aircraft management matters. operating at all registered, certified, Military and CASA The ANO conducts independent administrative reviews designated aerodromes are required to carry and use a of Airservices Australia and how it handles aircraft noise- Very High Frequency (VHF) radio. related activities, such as the handling of complaints/ enquiries, community consultation processes, and the presentation and distribution of aircraft noise-related Airservices Australia and the information. Aircraft Noise Ombudsman Arising out of their various activities, OAR, Airservices Airservices Australia administers the use by aircraft and the ANO can fundamentally affect the aircraft that of airspace classified by OAR. Airservices has can operate to and from any Australian airport, and the approximately 950 air traffic controllers, working from manner in which they do so. two major centres in Melbourne and Brisbane and 28 towers at international and regional airports. It has responsibility for:

>> 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.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 35 Office of Transport Security (c) The technology, equipment and procedures to be used by the participant to maintain aviation The Office of Transport Security (OTS) within the security; Department of Infrastructure and Transport is the Australian Government’s preventive security regulator (d) How the participant will respond to aviation for the aviation and maritime sectors. security incidents;

The Aviation Transport Security Act 2004 and Aviation (e) The practices and procedures to be used by Transport Security Regulations 2005 require aviation the participant to protect security compliance industry participants to operate an approved Transport information; Security Program. The Act allows the Secretary to (f) The other aviation industry participants who are designate airports as security controlled airports, to covered by, or operating under, the program; and assign categories to them, and to establish airside and landside areas, security zones and event zones for (g) The consultation that was undertaken, in those airports. Once established, the areas and zones preparing the program, by the participant with are subject to requirements directed at safeguarding the other aviation industry participants who are against unlawful interference with aviation and the covered by, or operating under, the program. airport operator is required to have and comply with a Transport Security Program approved by the Secretary The designation and categorisation of an airport of the Department. The categorisation of the security under the Act, and the nature of the aviation services controlled airport dictates the nature of the security undertaken by aircraft operators and agents at measures that must be implemented at it. the airport dictate the nature of the particular security measures that must be put in place at the airport. A transport security program for an aviation industry participant must demonstrate that the participant: Preparing a transport security plan and installing and operating security equipment and procedures is (a) Is aware of the participant’s general responsibility inherently challenging and expensive. to contribute to the maintenance of aviation security; Again it is the case that, whenever an airline proposes to change the nature of the air services it provides to (b) Has developed an integrated, responsible and and from a particular airport, this has the potential proactive approach to managing aviation security; to change the security designation/ categorisation of the airport and move it into a more tightly regulated (c) Is aware of, and has the capacity to meet, the situation. There may be considerable expense and specific obligations imposed on the participant effort required for an airport to meet the increased under this Act; and regulatory burden so that it can agree to meet the (d) Has taken into account relevant features of the airline’s proposal, and yet the airline will generally participant’s operation in developing activities and not be prepared to undertake to maintain the new air strategies for managing aviation security. services that necessitate that expense and effort on an ongoing basis. 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;

36 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Australian Transport Safety Bureau Quarantine The Australian Transport Safety Bureau (ATSB) is The Australian Quarantine and Inspection Service responsible for the independent investigation of (AQIS)/DAFF Biosecurity manages quarantine controls accidents and incidents involving civil aircraft in at Australia’s borders to minimise the risk of exotic Australia. The ATSB’s primary focus for its investigations pests and diseases entering the country. AQIS also is fare-paying passenger operations. However, all provides import and export inspection and certification accidents and incidents related to flight safety in to help retain Australia’s highly favourable animal, plant Australia or involving Australian registered aircraft and human health status and wide access to overseas overseas must be reported to the ATSB. While the ATSB export markets. does not investigate all of these, it still needs to be notified so that the data can be recorded for possible Within Australia, State Quarantine authorities control future safety research and analysis. the internal movement of plants or plant products, animals or animal products, soil, agricultural machinery It is not a function of the ATSB to apportion blame and other equipment, and recreational equipment. or provide a means for determining liability and the ATSB does not investigate for the purpose of Quarantine regulation necessarily affects the nature taking administrative, regulatory or criminal action. of the air services that may be provided from and to Nevertheless, the outcome of its investigations may an airport, and thereby the extent to which access have significant implications for an airport operator and facilities for quarantine inspection may need to be where an accident or investigation has involved aviation made available to quarantine authorities by the airport activity to, from or at its airport. operator.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 37 Customs Economic Regulation Where an airline wishes to operate international The Airports Act 1996 contains a range of airport-specific services to or from an airport, either as RPT, charter measures by which the prices charged and services or freight and whether or not as a principal port of offered by the “privatised” airports can be very closely departure and arrival or as an alternative port for regulated. limited use only when the principal port is unavailable, the Australian Customs and Border Protection Service These measures are not applicable to other airports, must be able to undertake its functions at the airport. even though they may be operationally very similar, and State legislation generally does not contain any Indeed, section 19 of the Customs Act 1901 specifically comparable measures. provides that: The Airports Act economic regulation measures have, Every wharf-owner and airport owner shall provide over time, been “fine-tuned” in their application to the satisfaction of the Collector suitable office amongst “privatised” airports, and the present and accommodation on his or her wharf or at his or so-called “light-handed” regime is now much more her airport for the exclusive use of the officer granular as between the various and very different employed at the wharf or airport also such shed airports. Nevertheless, regional airports such as accommodation for the protection of goods as the Archerfield and Jandakot must live with a risk of re- CEO may in writing declare to be requisite. regulation that does not apply at other airports that are operationally much the same. Penalty: 1 penalty unit.

Development Planning and Control Immigration In the area of development planning and control, there Similarly where an airline wishes to operate is another marked diversity in the regulatory regimes to international passenger services to or from an airport, which airport operators are subject. either as a principal port of departure and arrival or as an alternative port for limited use only when The Commonwealth-owned “privatised airports” are the principal port is unavailable, the Department of not subject to the town planning regime of the State Immigration and Citizenship must be able to undertake or Territory in which they are located but instead are its functions at the airport. subject to an airport-specific regulatory regime under the Commonwealth’s Airports Act. AFP and State/Territory Police Civilian airports operated on Defence airports are subject to quite different planning and development An airport may be required in a number of ways to controls established under the sub-leases through provide facilities to the Australian Federal Police or to which they gain the right to operate Commonwealth- State or Territory Police in order to ensure the safety of owned Defence land. operations, generally by parties other than the operator themselves, at the airport. 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.

38 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES But by far the majority of Australia’s airports operate Environmental Control under State, Territory and local government planning regimes that differ from jurisdiction to jurisdiction. Aviation operations at airports necessarily have environmental implications – whether by way of noise As a result, the regulatory burden to which a –generation, the storage and handling of materials particular airport is subject in one location may be such as aviation fuel, or the construction of airport markedly different from that applicable to an airport infrastructure. Except in the latter case, the party in another location that nevertheless shares identical generating the activity in question is generally not the operational characteristics. This can be a significant airport operator. issue for an airport competing with other airports to attract aviation or non-aviation tenants. 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 39 TRAFFIC AT REGIONAL AIRPORTS

There is no data collection that >> Similarly the report says nothing about trends in comprehensively covers all traffic other aviation categories, such as GA, recreational or charter, at any airport; and at Australian airports. >> The report does not disclose the spread of regular scheduled air services across airports and thus does Not surprisingly, quite detailed data on RPT traffic is not indicate whether the principal beneficiaries of quite readily available. But data for charter traffic and growth have been the relatively few fly-in/fly-out all the various forms of general aviation (GA) and sport and leisure ports, leaving the balance languishing aviation traffic is not available in anywhere near the with negative, no or low growth. What it makes same detail. clear, however, is that the growth in traffic to and from regional airports is almost entirely to and Nevertheless, the available data does allow some from major city airports, and not in traffic between insight into traffic at Australia’s regional airports. regional airports.

The Commonwealth Minister for Infrastructure and Having drawn attention to these limitations of the BITRE Transport announced on 19 March 2012 that: report, it is important to stress that it is nevertheless Australia’s regional airports have seen strong a very useful document. Within the limited but very growth over the past few years with total passenger important category of regular scheduled air services, movements at airports in regional areas growing at a it helps to demonstrate the volatile environment for faster rate than airports in major cities. regional airports and the communities they serve. A new BITRE report has found that passenger For example: numbers at regional airports increased from nearly 17 million to over 22 million between 2005 and >> RPT services ceased at 44 airports between 2005 2010. and 2010, and commenced at only 24 airports in that period; Most of the growth was from the increase of passengers travelling on regional air routes between >> The number of airlines serving regional airports major cities and regional areas, which make up more fell from 33 (serving 169 regional airports) in 2005 than 90 per cent of the regional aviation market. to 28 (serving 148 regional airports) in 2010 - this compares to more than 50 airlines in 1984 and …. around 57 in 1993; Strong regional aviation is not just important for >> Of those 28, only 20 had continued to operate since regional communities but is also good for Australia. 2005 while 8 had either resumed or commenced Given this undoubtedly good news, it would be easy to services since 2005; assume that all regional airports must be doing well. >> In the period 2005 to 2010, 128 regional airports recorded regular scheduled air services in both But such an assumption would be unfounded for a years, 41 recorded services in 2005 but not in 2010, number of reasons: and 21 recorded services in 2010 but not in 2005; >> The BITRE report referred to by the Minister deals >> Throughout the period 2005 to 2010 between 60 only with regular scheduled air services – in 2010 and 70 per cent of regional airports were served by only 148 airports were served by such services only a single airline; – 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;

40 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES >> The use of smaller aircraft on regional routes (less Other BITRE data does however provide a graphic than 18 seats and 18-29 seats) has trended heavily illustration of how volatile RPT traffic is when viewed downwards over time, while the use of aircraft with airport-by-airport. For the same period 2005 to 2006 30-100 seats has trended significantly upwards and where on an Australian average basis there was an the use of ever larger aircraft with 100+ seats has average annual rate of growth of 6% across all regional risen and fallen relatively erratically. Similarly, the airports, the following individual regional airports trend has been towards use of aircraft with higher showed exceptionally diverse growth or decline maximum take-off weight (MTOW). These overall patterns in their RPT traffic: 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.

Airport RPT Revenue Passengers RPT Revenue Passengers % change 2005-06 2010-11 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 +26.7 Bathurst Island 0 24076 Biloela 8177 20025 +144.9 Broken Hill 43631 63098 +44.61 Broome 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 Coffs harbour 322206 341116 +5.9 Coober Pedy 8465 10995 +29.9

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 41 Airport RPT Revenue Passengers RPT Revenue Passengers % change 2005-06 2010-11 2010-11/2005-06 Cooktown 15872 11388 -41.5 Derby-Curtin 1610 40700 +1528.9 Devonport 92805 139019 +49.8 Doomadgee 3176 7154 +125.3 Dubbo 155805 176821 +13.5 Elcho Island 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 Gove 105198 108067 +2.7 Grafton 6250 18810 +200.9 Griffith 60066 69266 +15.3 Groote Eylandt 22342 33861 +51.6 Hamilton 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 Mackay 660632 1049172 +58.9 Maningrida 22313 14148 -36.7 Merimbula 57732 51299 -11.2 Mildura 154654 207422 +34.1 Moorabbin 8849 9766 +10.4 Moranbah 8549 41488 +385.3 Moree 20959 32233 +53.8 Mornington Island 5840 10473 +79.3 Moruya 16759 20301 +1.1

42 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Airport RPT Revenue Passengers RPT Revenue Passengers % change 2005-06 2010-11 2010-11/2005-06 Mount Cavenagh 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 Newman 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 Portland 13856 12697 -8.3 Proserpine 222592 205436 -7.7 Rockhampton 588028 719805 +22.4 Roma 16247 59524 +266.4 Sunshine Coast 786178 914175 +16.3 Tamworth 92634 153680 +65.9 Taree 9056 19250 +112.6 Thursday Island 49923 90902 +81.5 Townsville 1161290 1622242 +39.7 Wagga Wagga 171677 213923 +24.6 Weipa 45059 58888 +30.7 Whyalla 64546 66539 +3.1 Williamtown 786651 1211302 +48.3

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 43 The volatility and contrast that these figures disclose >> The 513,000 hours flown in the Sport Aviation sector is remarkable: comprised: –– Gliding – 228,700 hours >> There are extreme differences between RPT traffic volumes airport-by-airport – from just a few –– Ultralight flying – 141,900 hours thousand a year to the millions; –– Hang gliding – 97,900 hours >> There are extreme differences in percentage –– Gyroplanes – 44,400 hours changes from 2005-06 to 2010-11; >> GA activity in 2010 was distributed geographically as >> There are a significant number of airports showing follows: a negative change; and Active aircraft Hours flown >> The locations in which more significant changes occurred, and the apparent significance of FIFO NSW 2620 382,000 operations, are very significant. Vic 1928 257,100

Beyond that, care should be taken in seeking to Qld 2506 492,100 interpret these statistics. They are merely a snapshot WA 1501 393,700 of two years and cannot be viewed as indicative SA 640 117,800 of consistent trends – for example, Doomadgee and Mornington Island, which respectively record Tas 176 26,100 percentage changes of 125.3% and 79.3% when 2010- NT 490 164,600 11 is compared to 2005-06, registered no RPT traffic at ACT 118 14,400 all in 2009/10. >> Regional airline activity in 2010 was geographically Moreover RPT traffic is itself only one indicator of distributed as follows: aviation activity at an airport – low RPT traffic may not be of concern to a local community where charter and Active aircraft Hours flown GA activity meets its needs. NSW 75 117,800 Airport-by airport data is unfortunately not available Vic 6 5,300 for non-RPT air traffic. However, the following figures Qld 56 60,800 clearly demonstrate the significance of charter/GA and sport aviation which predominantly operate from WA 46 21,000 Australia’s regional airports rather than from the capital SA 7 3,800 city airports: Tas 7 2,800 >> While RPT transport recorded 1,338,000 hours flown NT 35 11,100 in 2010 (including the international operations of ACT 6 5.400 Australia’s major airlines), General Aviation recorded 1,848,000 hours and Sport Aviation 513,000 hours. >> Aircraft based in Australia in GA and Regional Airline operations in 2010 comprised: >> The 1,848,000 hours in the GA industry sector –– Fixed wing, single engine - 8,486 in 2010 were flown by 9,979 active aircraft and –– Fixed wing, multi-engine - 1,932 comprised: –– Rotary wing - 1,800 –– Charter – 507,300 hours –– Balloons and airships - 346 –– Training – 436,300 hours >> By comparison, major Australian RPT fleets in 2010 –– Aerial work – 400,300 hours comprised 307 aircraft –– Private – 241,900 hours >> Of the 56 busiest City-Pair routes in Australia in –– Business – 140,000 hours the year ending April 2012, only 19 were Capital –– Agriculture – 103,800 hours City/Capital City routes – 37 were either Capital City/Regional or Regional/Regional routes as –– Test & ferry – 18,200 hours highlighted below:

44 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Passengers carried (000s) — annual activity Passengers carried (000s) — annual activity City-Pair YE Apr YE Apr % City-Pair YE Apr YE Apr % 2011 2012 Change 2011 2012 Change 1 Melbourne - 7 925.4 7 692.7 -2.9 21 Brisbane - 605.4 652.1 7.7 Sydney Rockhampton 2 Brisbane - 4 405.6 4 381.0 -0.6 22 Brisbane - 601.8 633.7 5.3 Sydney Canberra 3 Brisbane - 3 081.8 3 147.9 2.1 23 Brisbane - 572.7 595.0 3.9 Melbourne Newcastle 4 Gold Coast - 2 372.9 2 244.9 -5.4 24 Adelaide - 598.0 594.4 -0.6 Sydney Perth 5 Adelaide - 2 346.9 2 092.4 -10.8 25 Cairns - 478.9 501.7 4.8 Melbourne Melbourne 6 Melbourne - 1 799.4 1 892.2 5.2 26 Hobart - 513.3 461.0 -10.2 Perth Sydney 7 Perth - Sydney 1 656.1 1 766.7 6.7 27 Sunshine 487.8 458.2 -6.1 8 Adelaide - 1 781.3 1 703.1 -4.4 Coast - Sydney Sydney 28 Melbourne - 400.2 426.3 6.5 9 Gold Coast - 1 793.5 1 679.8 -6.3 Newcastle Melbourne 29 Perth - Port 335.0 414.3 23.7 10 Brisbane - 1 151.1 1 132.0 -1.7 Hedland Cairns 30 Brisbane - 363.9 370.6 1.8 11 Hobart - 1 250.9 1 130.0 -9.7 Darwin Melbourne 31 Melbourne - 419.1 350.0 -16.5 12 Canberra - 1 088.1 1 057.6 -2.8 Sunshine Coast Sydney 32 Coffs Harbour 309.4 311.8 0.8 13 Canberra - 1 114.2 1 033.7 -7.2 - Sydney Melbourne 33 Broome - 321.3 311.2 -3.2 14 Brisbane - 947.6 990.3 4.5 Perth Townsville 34 Darwin - 299.4 293.0 -2.1 15 Brisbane - 836.1 947.4 13.3 Melbourne Mackay 35 Newman - 210.3 279.2 32.8 16 Cairns - 890.6 915.0 2.7 Perth Sydney 36 Ballina – 270.4 264.1 -2.3 17 Brisbane - 778.6 908.3 16.7 Sydney Perth 37 Albury - 246.4 244.4 -0.8 18 Launceston - 831.9 788.7 -5.2 Sydney Melbourne 38 Kalgoorlie - 233.8 241.3 3.2 19 Adelaide - 716.6 686.9 -4.2 Perth Brisbane 39 Launceston - 222.4 220.8 -0.7 20 Karratha - 601.3 686.1 14.1 Sydney Perth 40 Brisbane - 206.6 211.4 2.3 Proserpine

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 45 Passengers carried (000s) — annual activity >> Of the 56 busiest City-Pair routes in Australia in April 2012, the strongest growth in passengers City-Pair YE Apr YE Apr % carried compared to April 2011 was recorded on the 2011 2012 Change following routes: 41 Port 214.1 201.4 -6.0 Perth – Port Hedland 39.9% Macquarie - Newman – Perth 39.5% Sydney Brisbane – Mackay 17.9% 42 Melbourne - 200.4 194.2 -3.1 Mildura Brisbane – Proserpine 17.8% 43 Adelaide - 200.1 193.5 -3.3 Hamilton Island – Sydney 14.9% Port Lincoln Karratha – Perth 14.7% 44 Cairns - 184.0 188.9 2.7 Brisbane – Perth 13.2% Townsville 45 Hamilton 182.1 187.3 2.9 By any measure, Australia’s regional airports play a vital Island - Sydney part in connecting Australians across the country! 46 Adelaide - 227.9 183.7 -19.4 Gold Coast 47 Adelaide - 188.0 183.2 -2.5 Canberra 48 Sydney - 175.5 182.2 3.8 Townsville 49 Sydney - 186.6 179.6 -3.8 Wagga Wagga 50 Dubbo - 182.4 173.7 -4.8 Sydney 51 Brisbane - 172.0 164.3 -4.5 Hamilton Island 52 Darwin - 146.6 160.7 9.6 Perth 53 Ayers Rock - 100.7 151.0 NA Sydney 54 Brisbane - .. 149.0 NA Gladstone 55 Geraldton - .. 54.9 NA Perth 56 Brisbane - .. 43.9 NA Emerald

46 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 47 THE ECONOMIC AND COMMUNITY CONTRIBUTION OF REGIONAL AIRPORTS

The study of the economic and social contribution Under this approach, the value added from airport of Australia’s airports, prepared by Deloitte Access precinct activities was estimated to be approximately Economics for the AAA and released in 2012 provides $14.1 billion in 2011, with significant employment of a major insight into the economic and community about 108,300 full-time workers. This component of contribution of Australia’s regional airports. the industry economic contribution has been based on more limited information and, accordingly, should be The following extracts from it provide only a brief viewed as exploratory — representing a potential order summary of the conclusions documented and explained of magnitude for the economic footprint of airport more fully in that report: precincts across the country.

The current economic contribution of Australia’s ‘core’ Bringing the two key aspects of the industry’s activities airport sector in 2011 was estimated at $3.2 billion, together, the total direct industry value added with $2.6 billion in gross operating surplus (GOS) and was estimated to be in the order of $17.3 billion $620 million in wage payments, spread as follows: (this equates to around 1.2% of GDP), with overall employment at airport sites of around 115,200 full-time Economic contribution of the core airport sector, 2011 equivalent workers.

Value- Wages GOS Total economic contribution of added ($m) ($m) Australia’s airports, 2011 ($m) Major airports 2,853 508 2,346 Employment Value (FTE) added ($m) Major regional 255 71 185 airports Core airport operations 6,865 3,183 Regional airports 52 26 25 Airport precinct 108,291 14,083 Remote airports 22 16 6 Total 115, 156 17,266 Total 3,183 621 2,562

The return to capital inputs, at close to 80%, are The wider economic gains generated comparatively high for the core operational functions by airports of the airport sector. This is characteristic of capital intensive industries which rely on large infrastructure These contribution estimates provide a ‘snapshot’ assets to derive income. As a result, the labour share of picture of the current economic gains created by core airport operations is quite low — yielding a total the airport industry at a single point in time. The employment of around 6,900 FTEs. considerable size and complex range of activities undertaken at airports mean that the impacts created However, the operational core of an airport is only today may take time to materialise and permeate one component of its overall economic profile and a through the economy. broad range of associated and ancillary activities also typically occur on airport precincts to support airports In fact, over time, as the employment and income gains in performing their core functions. An estimate of of those employed at airports, or those who rely on these activities, across Australia’s network of airports, airport services spread across the economy, the ongoing was undertaken based on the size of each airport’s contribution of the airport industry can be even higher. core operations and stratified precinct relativities The following discussion around the induced and reflecting inherent differences between the four major catalytic impacts represent economic benefits that have classes of airport (major, major regional, regional and a temporal dimension, that is, they have a time-based remote airports). pattern of development and as a consequence mat not be apparent in a snapshot analysis.

48 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Induced effects Catalytic impacts

Like other economic activities, the activity generated at It is widely recognised that beyond their immediate airports produces further flow-on benefits throughout contributions, the link between airports and access to the economy. These induced effects are generated by air services has helped transform the functioning of successive rounds of spending enabled by the income the Australian economy — in effect, strengthening and and employment supported by the airport industry. accelerating trade and social connections across the country and abroad. The extent to which the existence In essence, airport industry employees use their salaries of airports and the air services they enable boosts the to purchase goods and services from other businesses performance of other industries and indeed the overall in the community. These businesses then make economy, are typically termed ‘catalytic impacts’. 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 >> Inward investment — Airports have become a part positive spillover effects, including: of multi-modal transport hubs. As road and rail >> Global accessibility and trade — One of the most links to airports improve, airports with large areas significant advantages of airports is to facilitate, of available adjacent land are able to capitalise and through delivery of air services, better access to develop as national or regional centres of logistics. larger markets. The wider availability and falling This has been supported by the growth in airfreight, price of air transport over the past few decades where manufacturers of high value, low-density has assisted in making trade with distant markets products trade-off the savings in inventory costs for possible for all types of organisations. This can be costs of using more frequently. Products seen in rising levels of trade intensity, which now such as fashion garments and perishable goods accounts for around 46% of economic activity in are increasingly using air travel as the preferred Australia transport mode. This trend has translated into a International trade is commonly recognised as a greater number of freight-forwarding firms basing key driver of economic growth and rising living operations at airports or in proximity to them. standards. Essentially, trade allows countries to >> Tourism — Airport services facilitate passenger specialise in producing the goods and services entry and exit to the area, generating income and in which they have a comparative advantage in employment in the Australian tourism industry and exchange for products that domestic consumers related sectors of the economy. Segments of the demand, but are produced more efficiently tourism industry in which airports and air travel elsewhere. The net result is an increase in the are of particular significance include: mass tourism, overall value of goods and services available in an short domestic breaks, conventions and exhibitions economy. and long haul tourism. Expenditure by tourists >> Productivity — By facilitating increased mobility, the can form a major part of the economic impact airport sector plays a vital role in supporting other attributable, at least in part, to the existence of an parts of the economy to operate more productively. airport. Mobility is a predicator of economic activity, as it >> Commercial activity — Better connections to satisfies the basic need of moving from one location domestic and international markets have the to another, a need that is shared by passengers, potential to attract businesses to locate at or within freight and information. close proximity to airports. Those industries that Airports enable organisations to exploit geographical need air services to conduct their operations gain comparative advantages and promote the efficiency when located near airport networks. In development of economies and scale and scope addition, sectors with a trade element also benefit through the access to air services. from proximity to airports. These advantages can be seen in the broader ‘off-airport’ precinct around The use of air services has become exceedingly major airport facilities. important in light of the greater economic integration between national and global markets. Australia’s high-value services composition necessitates Airports provide easier access to suppliers, staff the frequent use of air travel to coordinate with and customers, particularly over longer distances, suppliers, and liaise with customers and staff. Air travel increasing business efficiency and thereby enables organisations to be managed more effectively, contributing to stronger productivity performance by making it easier for executives to visit subsidiaries and economic growth. or parent companies in another location. In this way, management expertise can also be transferred across The application of FIFO charters highlights the offices. The propensity for collaboration, innovation and way in which the airport sector, in conjunction networking is also increased. with airline operators have effectively supported new productive resource developments across the The Deloitte Access Economics report did not seek to country. place a dollar value on these catalytic effects and this would be an inherently difficult and uncertain task.

50 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES THE MYTHS THE

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 51 MYTHS ABOUT AUSTRALIAN AIRPORTS

Very few outside the aviation industry have a >> Airports often have to compete with one another, sound understanding of how an airport works, particularly to attract the location of airline maintenance facilities or to secure RPT services and even some within the industry are blind to where there are other airports within a relatively some of the fundamentals. close distance (as, for example, in Tasmania); >> Airport owners are predominantly local government bodies who exert pressure to ensure that airports Accordingly, this section seeks to dispel some of the attract and maintain the air services that their most frequently disseminated myths: communities demand; >> As utility service providers, airports are always Airports are powerful monopolies subject to the threat of regulatory intervention if they seek to abuse market power or set prices at In most cases an airport is in a monopoly position – it is levels that exceed a fair return – history and three usually, but not always, the only airport in the area. Productivity Commission inquiries have conclusively shown that even the largest of Australian airports But even where an airport is the monopoly supplier have not abused their market power. 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 Airports are a licence to print money commercial power often associated with a monopoly business: Airports are often thought to be “big business” because they have large assets and some even suggest that they >> Airlines and other airport users possess marked are a “cash cow” used by their local government owners countervailing power. A regional airport negotiating to cross subsidise other municipal services. with any significant airline has far less capacity to press a commercial outcome than a larger airport The AAA knows of no evidence to support such (and the Productivity Commission has found that contentions. As already noted, around half of Australia’s even the largest Australian airports have not abused regional airports operate at a loss and there are whatever market power they may have). Airline significant constraints on an airport increasing its businesses are themselves so cost sensitive that charges to or beyond a fair return on capital. they will abandon routes if regional airport charges are increased to a point approaching anywhere Indeed, the BITRE publication Avline 2010-11 includes a near a monopoly rent, or simply refuse to pay table that shows that charges at the 10 regional airports even though they may continue to use the airport serviced predominantly by non-jet aircraft and handling 2 – indeed, it seems likely that at around half of the highest number of passengers in 2005-06 generally Australia’s regional airports, airport charges do not remained unchanged in nominal terms and fell by 3.4% even reach cost recovery; 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 and thereby affects how the noise those aircraft generate will affect the community; that happens at their airport, >> It is the Minister for Infrastructure and Transport or especially noise their departmental delegates, and not the airport, that take decisions under the Adelaide Airport Certain actions of airport operators can generate Curfew Act 2000 that affect whether aircraft operate noise (for example, through the choice of terminal during curfew hours at Adelaide Airport; air-conditioning plant, or during the construction of new infrastructure) or affect the impact which noise >> It as Airservices Australia, and not the airport, that is generated by others may have beyond the airport statutorily obliged under the (Aircraft boundaries (for example, by the location of run-up Flight Corridors) Regulations 1994 to monitor and bays, or of premises for on-airport aviation and non- investigate compliance by aircraft with designated aviation businesses). However, while clearly accepting flight corridors at Sydney Airport; responsibility for the noise impacts of such actions, it >> it is the Secretary and Airservices Australia, and is also pertinent to note that the level of noise within not the airport, that take decisions under the Air the control of an airport operator is comparatively Navigation ( Airport Curfew) Regulations negligible. 1999 that affect whether aircraft operate during curfew hours at Coolangatta Airport; It comes as a surprise to many to learn that the airport >> It is the Secretary and Airservices Australia, and operator cannot control the most important source of not the airport, that take decisions under the Air noise generated by operations to, at or from an airport Navigation (Essendon Airport) Regulations 2001 that – that generated by aircraft. affect whether aircraft operate during curfew hours The following points illustrate this fact for the at Essendon Airport; “privatised airports” , which include “regional” airports >> And, of course, it is Airservices Australia, and not like Bankstown, Archerfield and Parafield: airports, that is responsible for the Noise Enquiry Service and the Aircraft Noise Ombudsman. >> It is the Commonwealth, and not the airport, that mandates (through the lease terms it has set for the The detail of these responsibilities at airports other former FAC airports) that an airport cannot refuse than the “privatised airports” differs but the general access to aircraft no matter how much noise they proposition holds true – airport operators cannot really generate; control the noise emitted by aircraft using their airports. >> 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

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 53 Airports are passive assets that run Airports rents should not be set at themselves market rates for airport tenants An airport is not a “set it and forget it” business. While Regional airports value their GA and other airport assets like runways are relatively passive, they do tenants and do appreciate that they face their own need to be actively managed – for example, by regular financial pressures. inspections to ensure that they are free of foreign object debris and to manage wildlife intrusions. 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 Running an airport is just like running has been a necessary and intended consequence of the privatisation process – essentially, the government a camping ground owner invited offers for the right to operate the airport on a fully commercial basis, and used the privatisation Just as at the local camping ground, itinerant travellers proceeds for public purposes. At other airports, this can land their aircraft at an airport and potentially trend has been driven by the need of local government leave before their presence is detected and an airport bodies throughout Australia to moderate their demands fee collected. But there the analogy ends. An airport on ratepayers and optimise the services that they can manager’s job calls for the exercise of a whole range of provide to their community for the rates they pay. specialist skills unique to operating an airport, and the Even so, perhaps as many as 50% of Australia’s regional consequences for failing to exercise them with due care airports are still operating at a loss. and diligence can be significant for all concerned. Arguments that airport tenants should not pay On occasions those who are elected to local market-based rents are essentially a claim for a government office do not have the background or publicly-funded subsidy that, if it is to be granted, experience that allows them to recognise the degree needs to be demonstrated to be in the interest of the to which specialist professional and technical skills are public generally, and not just to the advantage of the required to operate the airport of which their council is individual tenant. 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 THE CHALLENGES THE

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 55 CHALLENGES FOR AUSTRALIA’S REGIONAL AIRPORTS

Australia’s regional airports face multiple Most of the registered airports in Australia are very challenges in their endeavours to continue small; in addition, there are numerous much smaller facilities across the country which are used for (more to meet the needs of the communities irregular) aircraft operations. These facilities, most of they serve. 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 Essentially, regional airports need to operate at the and dispersed facilities face considerable operational elusive intersection between commercial reality and and financial pressures. While the maintenance and community need. This section seeks to briefly highlight operational cost requirements for remote airports are the most significant of them. often modest, they typically lack the scale to ensure they can be financially self-sustaining. Financial capacity to maintain regional As a result, a large share, if not most, have recurrent requirements for financial support by their government airport infrastructure owners, either in a general sense or for specific works Simply maintaining existing airport infrastructure (e.g., to pave runways or install navigational lighting). in a safe and usable condition can be a challenge at This means that funding for most airports needs to many regional airports, and particularly the more compete with pressing demands for other municipal remote. Airport facilities such as runways, lighting services. and navigation aids are not passive assets – they need Under the Aerodrome Local Ownership Plan (ALOP), active ongoing operational attention and periodic through which the Federal Government transferred very renewal, which is particularly expensive especially as many airports to local government ownership, grants the distance from major urban centres increases. For were offered to bring the airports up to good operating example, infrastructure renewal and development costs condition as part of the transfer arrangement. The at in South Australia are around 1.5 alternative was the potential closure of the airports. times higher than those in Adelaide, while at Derby- West Kimberley Airport they can readily be 3 times What is now evident in many cases is that the local higher, or even greater, than in Perth. government airport owners have not made (or not been able to make) adequate provision for future funding of The Deloitte Access Economics report found that there major recurring maintenance projects such as aircraft is a clear pattern between declining profitability and movement area resurfacings. This impost, together with airport size. Key profit and loss statistics indicate: either strong growth or declines in passenger numbers >> Around 95% of major and major regional airports and changing regulations, has required these owners to reported profits. divert investment away from their core infrastructure or >> Only 55% of regional airports reported a profit. to alternatively seek State or Federal Government, or in >> About 45% of remote airports recorded a profit. 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.

56 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Maintaining RPT services to Skilling the regional airport regional airports The aviation industry requires a highly skilled and The regularity, predictability and convenience of RPT diverse workforce. Consisting of nearly 56,500 air services are a major asset to regional communities. transport jobs, the aviation industry supports activity However, there has been a declining trend in the at airports and air service dependent sectors. By nature number of regional airports with RPT services over the industry is heavily reliant on technical occupations the last two decades. Since 2005, RPT services have – not just pilots, air traffic controllers, aircraft ceased at 45 regional airports, while only 25 airports engineers and IT professionals, but also airport specific have gained new RPT services. The majority of these technical professionals such as Work Safety Officers changes in RPT services have been in Queensland and and Aerodrome Reporting Officers. The development the Northern Territory. Some of the RPT-discontinued of a sufficient number of skilled workers is critical to airports are now only serviced by charter flights. ensuring the industry’s continued strategic role in the Australian economy. It is not just passenger numbers on lower density routes that drives the cessation of RPT services. The The training arrangements are sometimes complex development as aviation skills development is pursued at a number of aircraft technology also affects airports. The trend of levels by industry, through higher education, and towards through vocational education and training. In the larger and more fuel-efficient planes impacts on the past, the aviation industry has seen poor recruitment ability numbers, barriers associated with education funding of airports to cater for a larger number of arrivals at and limited access to practical training facilities. In a single time; and may require some infrastructure and addition, the civilian and military components of the runway changes. aviation industry have operated largely independently, with the transfer of skills and personnel between For regional airports, the development of modern these groups hindered by the absence of an integrated turboprop aircraft which are larger (most are over 50 training system. seats), pressurised and more fuel efficient is also having an effect on the delivery of air services. There has been A constant challenge is an ageing workforce and labour a shift towards greater hubbing of regional air routes. shortages in key skill areas and locations, especially Certainly some regional centres (e.g. Wagga Wagga where staff trained at regional airports are enticed to Airport) have experienced strong growth in utilisation move to larger airports in search of perceived career over recent years as they have developed into key progression. regional hubs — particularly on the back of growth in A further challenge is avoiding de-skilling of staff at mining and agricultural services. But other airports and smaller airports where traffic is not sufficient to require their communities have lost RPT services as a result. that they work at the airport on a full-time basis and Modern turboprops are being increasingly deployed on they are deployed part-time to other more generalist regional routes (many are replacing older fleet aircraft). duties. Importantly, to ensure these aircraft are maximally To meet training challenges in the airport industry, the utilised, a regional hub-and-spoke model in regional AAA and the Transport Logistics Industry Skills Council Australia is likely to become further entrenched. Given are coordinating the roll out a national training plan their size and weight, these aircraft will also have longer aimed at training Work Safety Officers and Aerodrome term impacts on the infrastructure and maintenance Reporting Officers as part of the National Workforce requirements for affected regional airports. Development Fund. This program has received encouraging support across the industry. Training was delivered to more than 100 candidates.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 57 Enhancing regional airport And financing development to meet growth demands at regional airports can be a major challenge for a variety infrastructure to meet increasing of reasons, such as: demand >> Because there is no certainty that the increased Growth in traffic to and from regional airports can be air services that drive the need for expansion will a blessing but also generate its own problems in terms continue to use the airport – for example, if an of congestion and demands for expanding airport airlines traffic projections on a new route prove too infrastructure. optimistic, if a local mining project is “mothballed” as overseas mineral demand eases, or if world Airports are capital intensive businesses, underpinned events dampen tourism to Australia; by their principal role as transport infrastructure >> Because the local airport owner may have other providers. Like other forms of economic infrastructure, competing demands on their borrowing capacity these assets are long lived and have few, if any, in order to provide other municipal services to its alternative uses. While airport infrastructure is community; or characterised by extremely long asset lives (sometimes in excess of 50 years), they are also associated with >> Because State legislation may place limitations on long lead in times. This means that expenditures made the borrowing capacity of local government entities. today, often take a period of several years to materialise By way of a practical example of the pressure that into operational facilities. Therefore, in order to ensure growth can bring, the April 2012 Western Australian Air market demands are met, airports are required to Traffic Task Force Report to the Aviation Policy Group identify periodic expansion investments far in advance discloses that: of any forecasted shortfalls. >> Outside Perth, a number of aerodromes in the state Some recent developments have effectively intensified have seen sustained increases in passenger numbers the broader pressures faced within Australia’s airport and aircraft movements over the past five years, network: including Karratha, Broome, Port Hedland, Newman, >> The trend towards larger and heavier aircraft Geraldton, Kununurra and Paraburdoo. on regional routes has increased infrastructure >> However, apron space at some regional aerodromes requirements for both terminal facilities and runway is so limited that aircraft have to get airborne maintenance, adding to the costs for smaller to allow other aircraft to land to facilitate the operators. movement of other aircraft. >> The drive for greater efficiencies by RPT operators >> Perth congestion in relation to surface movements, has also led to consolidation on many regional departures and arrivals is a significant issue which routes. Greater load factors have certainly has effects on traffic to and from regional ports. benefitted some regional airports (and passengers) Increasing the efficiency of the upper airspace may but it has meant that other facilities handle fewer increase the traffic at regional aerodromes, but and more irregular air services. In some cases, RPT additional traffic may cause delays on the ground services have ceased altogether which can have a and congestion in the surrounding airspace. more fundamental effect on sustainability. >> 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.

58 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES >> There are three major aerodromes in the North >> There may be a reluctance by mining companies West which have experienced sustained growth to use hubs. A number of mining companies prefer over the past five years—Broome, Karratha and Port to segregate their staff from workers from other Hedland. companies in an effort to prevent staff being >> The Task Force discussed the introduction of poached. Anecdotal evidence presented to the Task aerodrome hubs to service the resources industry. Force suggests that poaching of staff at aerodromes The hubs would be used as a transfer point for is a concern to mine operators. mining workers and could reduce the burden on >> Hubs may adversely affect mining companies, as it Perth Airport. The hubs would be large enough to could introduce additional costs. accommodate high capacity aircraft ( and ) from Perth and interstate. The costs of establishing major works in the airport sector and more broadly across the economy have >> Due to the volume of mining activities spread been increasing. This is being primarily driven by rising around Western Australia, two or more hubs may construction costs and shortages of skilled labour. be required to meet demand. Infrastructure at the hubs would be upgraded to include an ATC Tower, Cost over-runs and slippage of development schedules Aerodrome Rescue and Fire Fighting Services represent substantial risks to airport projects, especially (ARFFS) and surveillance. A Class C ATC service given the considerable scale of investment. A further would likely need to be introduced. factor is that airport infrastructure, whether terminal >> Possible locations for hubs would be in the Pilbara facilities or runway works, are among the most region (Port Hedland/Karratha/Broome) and in expensive forms of commercial and civil construction. the mid-west region near Geraldton. A hub in the This is particularly the case at the more remote airports Kalgoorlie region may be required to service the where development costs can be a multiple of those in south of the state. capital cities. >> Significant infrastructure investment is required for a hub to be operational. The cost of the investment includes: The risk of “stranded” assets at –– Cost of land (if a greenfield site and not an regional airports established aerodrome); Unlike many other infrastructure sectors, final –– Runway work (Construction, lengthening/ demand from airlines is not underpinned by long term widening/strengthening/lighting); contractual commitments and, accordingly, airports –– Taxiway and apron works; must bear substantial demand risk. This can impede –– Terminal facilities; forward investment decisions, such as on infrastructure –– Navigational aids/instrument landing systems; and terminal facilities. This problem besets all airports, but is particularly an issue at regional airports. –– ATC Tower/data and communication links; –– ARFFS; and Not surprisingly, airlines commencing new regional RPT –– Surveillance. services are not prepared to give an assurance to the airport operator that those services will continue to >> Sourcing specialist equipment for the ATC Tower operate indefinitely, or even for definite periods. They could delay the implementation of ATC at a location, reserve the option to cease services at short notice if if not planned well. The lead-in time to recruit load factors render a route uneconomic for them, or and train ATC staff is considerable. A conservative to maintain the route but substitute smaller aircraft or estimate of 18 months is required to install an reduce frequencies. ATC Tower at an existing aerodrome and have it appropriately staffed. The time to create a hub at There may be a need for a regional airport to expand a greenfield site would be considerable due to the its infrastructure capacity in order to attract new RPT need to locate and purchase a suitable site. services of real potential benefit to the local community – for example, by widening or lengthening runways

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 59 or installing security screening equipment mandated In its 2009 Aviation White Paper the Commonwealth by the Office of Transport Security for aircraft of a Government proposed the development of a national particular size. Airlines generally insist that airport fees land use planning framework that would: recover these costs only through over the full economic life of the new asset – up to 50 years in some cases. >> Improve community amenity by minimising noise- sensitive developments near airports including This means that there is a considerable risk that through the use of additional noise metrics and regional airport investment can become “stranded” and improved noise-disclosure mechanisms; and lie idle many years before its cost has been recovered >> Improve safety outcomes by ensuring aviation safety by the airport operator. requirements are recognised in land use planning decisions through guidelines being adopted by jurisdictions on various safety-related issues. Protecting the operational viability The subsequently established National Airports of regional airports from off-airport Safeguarding Advisory Group (NASAG) comprising encroachment of Commonwealth, State and Territory Government planning and transport officials, the Department The capacity of an airport to operate as an airport of Defence, CASA, Airservices Australia and the is fundamentally dependent on what occurs on the Australian Local Government Association (ALGA) has land surrounding it. The erection of structures that made significant progress in developing a National physically intrude into the flight paths of arriving and Airports Safeguarding Framework but this is not yet departing aircraft can clearly limit or prevent use of the comprehensive or certain in the protection it affords. airport. But so too can other developments that are less obvious. For example:

>> Insensitive residential developments under flight Living with the GA industry at paths may lead to complaints about aircraft noise regional airports and eventually lead to the introduction of curfews or even the closure of an airport; Both airport operators and GA businesses have >> Industrial activities that generate smoke or similar legitimate commercial interests but the way in which hazards may constrain use of an airport; and their relationships have evolved over time has led to difficulties and misunderstandings. The following >> Other activities such as agriculture, animal discussion is drawn from the 2008 Report of the husbandry or wetland developments may attract General Aviation Industry Action Agenda. birds and pose a distinct hazard to aviation. According to IBIS World Business (IBISWorld, 2007), in There is no uniform regime that requires developments 2005‐06 the Australian non‐scheduled air and space around airports to be subjected to scrutiny to assess transport sector comprised 1,192 enterprises employing their potential impact upon an airport. CASA has some 3,788 people. Industry turnover was $923.8 million, limited capacity under Regulations made under the Civil representing a 15.3 per cent increase over the previous Aviation Act 1988 to approve or not approve buildings three years, with export earnings of $65.2 million. 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.

60 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Approximately a quarter of revenue is respectively The commercial tension that has resulted from these generated by each of passenger transport, flight training changes has created difficulties for both tenants and and aerial work. The remaining share is comprised of airport operators. While not a universal view, there is private and business use and test and ferry operations. widespread acceptance that airports should continue Industry concentration is low, indicating a high to operate as efficient commercial operations. However proportion of smaller, locally-based businesses. the privatisation of secondary airports has resulted in GA operators being exposed to a commercial The Australian GA industry is in a state of transition. charging regime never fully experienced under the Some sectors are growing strongly while others are in previous system of government ownership. This has decline with some individual businesses struggling to exposed vulnerabilities in the business models of many remain viable. Changes surrounding the GA industry General Aviation businesses that had not been evident over the past twenty years have been profound: previously.

>> The termination of the two‐airline policy in 1990 In many circumstances, rents levied on hangars, allowing the entrance of new airlines to the commercial premises and land have been increasing, Australian domestic aviation market. This has particularly at the major metropolitan GA airports. resulted in an expansion and restructuring of The leases concerned are commercial agreements the domestic airline industry with the number of between airport lessees and their tenants and are passengers on domestic services almost trebling, therefore a relatively new development in the industry. from 15.6 million in 1990 to 45.8 million in It is likely that these price changes will have led to 2006‐07, driven by lower air fares and more choice a reorganisation of GA activity. Participants in the for consumers. industry who are sensitive to changes in the price of >> In the early 1990s, the transfer of local, council‐ airport access may have moved away from higher operated airports under the Aerodrome Local cost aerodromes, trading off reduced costs for a Ownership Plan (ALOP) to local governments. less convenient location and perhaps more limited >> In the late 1990s/2000s, the privatisation of 22 infrastructure. The costs of relocation can be significant Commonwealth‐owned airports under leasehold as some tenants may lose sunk capital costs, such as arrangements. the buildings situated on the site of their lease, if they choose to relocate. Generally rents at GA airports have >> The transition to user cost recovery arrangements increased significantly since privatisation, reflecting for aviation safety regulation in recent years, though the fact that former FAC rents were unrealistically low. not new, represents an increase in the proportion of Also, commercially driven airport lessees adopted rents activities cost‐recovered by CASA. more commensurate with commercial rates at off‐ Twenty‐two federally owned airports were leased to airport locations. However, this is not uniform or solely private operators since the late 1990s and are now run the result of airport privatisation. Rents vary greatly as fully commercial organisations. Many tenants had between airports and tenants. come to view previous long‐term lease arrangements as a reliable indicator of future costs but have found that Although GA operators understand the need for airport many previous access arrangements were priced below managers to derive a commercial return from their market value and the adjustment has been significant. assets, some stakeholders believed that the drive for This has also occurred at some regional airports under rental increases at some airports has been to such a local government control. 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.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 61 Living with the cost of aviation Living with the cost of security safety regulation regulation Aviation is, by its nature and consistent with Smaller regional and remote airports typically have community expectations, highly regulated. Safety is lower levels of passenger throughput or commercial not negotiable. Achieving the high levels of safety activities, reducing the level of mandated security. rightly expected of the industry while not imposing However, if these airports receive passenger services unnecessary costs is an ongoing challenge. involving aircraft greater than 20,000 kg they need to undertake passenger screening. In this case, relevant Regional and remote airports spend a greater share screening costs are often far higher than those at larger of resources complying with relevant regulations, airports as the costs are effectively amortised over a including mandatory audits and inspections. On smaller passenger base. average major and major regional airports attribute 4% of total expenses for regulation and compliance There have been significant changes since 2001 to the purposes, compared to 12% at regional and remote regulatory regime governing security requirements. airports. That is, the regulatory impost for regional While the industry accepts these changes, there is and remote airports is around three times higher than a common view that security requirements can be that faced by larger airports. 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.

62 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES The resourcing of increasingly busy and complex The cost of implementing the new security regulations regional airports is highlighting the cost of compliance has been significant. Given the fixed level of costs, and the shortage of skilled personnel in many the smaller the airport, the more significant the per communities, particularly those in areas of major passenger cost of compliance. This cost must be passed resource projects. A number of regional airport owners on to the passenger and is additional to the already have been struggling to meet the requirements of relatively high aeronautical charges required because of the new regulations. Aviation security screening and the lack of scale at smaller airports. the development of Transportation Security Plans, for example, are new undertakings for these operators. By way of example, the following illustrates the much In addition screening activities generally require much higher cost per capita required to fund operations greater numbers of staff than were typically required and facilities at four regional airports operated by before the new regulations were prescribed. Longreach Queensland Airports Limited (QAL), at Gold Coast, Airport, for example, was operated by one full-time Townsville, Mount Isa and Longreach. and one part-time staff prior to the introduction of The much higher costs per passenger required to passenger and baggage screening. The airport now operate regional airports reflects a similar position requires one additional full-time staff person and seven for the regional airline operations. The end result is additional part-time staff to handle just one RPT flight significantly higher fares for passengers from smaller per day. communities compared to those travelling to or from Whilst the Federal Government has in many cases our larger centres. 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.

Gold Coast Gold Coast Townsville Mt Isa Longreach Domestic International Pax # FY12 5,315,255 1,693,365 247,281 37,726 Aero Charges 5.59 5.5 4.96 13.3 16.64* Terminal Charges 3.2 3.95 5.77 7.1 13.2** Security Charges 2.75 3.9 2.11 5.8 CUTE (departing only) 0.27 0.27 na na na

*There are no published rates for LRE. This is the adult rate. **FY13 rate as there are no published charges for FY12

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 63 Avoiding unnecessary and And, where existing legislation is applied inconsistently between airports, this too means inconsistent regulation an increased cost for those airports at which It is a well-established principle in Australia that inconsistency imposes a higher burden. government regulation should intrude into the affairs A challenge therefore for all regional airports is to of Australian people and businesses only where it is seek to ensure that airport regulation is sufficiently necessary to do so in the public interest, and then “granular” to treat materially different categories of only to the extent necessary to safeguard that public airports in an appropriate manner and, within each interest. category, in a consistent and predictable manner. Complying with new regulatory requirements necessarily involves cost, and any unnecessary increase in costs is something that regional airports especially have a clear Maintaining regulatory awareness need to avoid – particularly as so many already operate Australia’s airports are subject to a diverse and at a loss. Increases in airport security requirements complex range of regulatory requirements that change such as checked bag screening and front-of terminal and evolve over time. Achieving and maintaining an security and the introduction of other measures such as operational familiarity with all these requirements is a requirements for Drug and Alcohol Management Plans demanding challenge for even a dedicated regulatory constitute a potentially overwhelming burden on the affairs professional. And, at regional airports where all limited budgets of smaller airports and should only be airport operational tasks must be undertaken by only a imposed where the balance between risk and benefit few individuals (and sometimes even just one), this can clearly requires it in the individual circumstances. be a near impossibility.

64 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES Not only airport operators and the AAA as their Airports can also face stiff competition (both from one industry association but also government regulators another and from off-airport developers) in seeking need to be constantly searching for improved ways to advance projects of this nature. Moreover, some in which airports can be consulted in and informed regional airports have the added disadvantage of having about the development of new and changed regulatory to comply with planning and development approval requirements that affect airports whether directly or, processes that are more demanding and time consuming through their impact on airlines or others, indirectly. than those confronted by other potential developers seeking to attract the same tenants. Competition Susceptibility to broader economic Over the past several decades Australian airports have encountered increased competition from alternative conditions transport modes with significant improvements in road There are many challenges facing the industry over infrastructure and motor vehicles. It is now far more the medium to long term, especially in the context of conceivable that regional travellers will avoid travelling a strong currency, areas of weakness in the domestic through their local airport altogether, or use a more tourism market and strong demand for air services from distant airport to achieve speedier overall door-to- the resources sector. door travel. Airports are also fundamentally affected by competition between destinations, and particularly While the Australian economy has performed well tourist destinations, over which they have no control. in aggregate over recent years compared to other For example, Broome competes with Bali every day. advanced economies, there has been considerable variation across both industries and geographic regions: >> Growth has been very strong in the resources sector, Optimising non-aeronautical particularly Western Australia and Queensland; opportunities to support aeronautical >> On the other hand, other non-mining trade exposed operations sectors such as manufacturing and — more critically to airports — tourism have shown weaker Regional and remote airports generate about 25% performance. of their revenue from non-aeronautical sources. This compares to around 44% in major and major regional Airlines are particularly volatile businesses being airports. exposed to a range of largely uncontrollable risks such as terrorism, pandemics and natural disasters. Each of Non-aeronautical developments at various Australian these risks have materialised at some time over the last airports include precincts for office business parks, decade having a disruptive impact on the international hotels, shopping outlets, freight and logistics centres tourism market. and some manufacturing and processing plants. And signs of a recent slowing in Chinese demand for Non-aeronautical revenue can be important as Australia’s mineral resources have potentially major it provides commercial diversification to support implications for the future of very many regional airports through times when aeronautical revenue is airports. 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.

AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 65 Environmental pressures Promoting a better understanding Some of the most frequently cited criticisms of of regional airports airports allude to the impact of the aviation industry Australia’s regional airports are a unique community on local noise, the implications for pollution and the resource of enormous value. However, they are also road-side congestion around airports. In addition, economically fragile. Inappropriate decisions by the airports which are most attractive to airlines tend government owners and government regulators can to be those which are closest to major centres of readily impede the capacity of a regional airport to population and business — these same airports are provide the vital services its community requires. more susceptible to environmental and social costs. Accordingly, an ongoing challenge for all airports is to Avoiding or mitigating the environmental implications ensure that the complexities and sensitivities of this of airport development and operation poses major situation are recognised and understood amongst the cost implications for many airports. government owners and regulators, and amongst the But even at airports well away from residential broader community. developments, other environmental issues can In this endeavour, the breadth of the AAA’s membership have major impacts on the potential for an airport within the Australian airport industry means that to better serve its community – for example, when it is an invaluable resource for regional airports to environmental regulators oppose the lopping of communicate with all governments and government increased vegetation that threatens to render agencies with a need to consult within the industry to current aviation operations unsafe, or the removal ensure that their policy and operation decisions are well of vegetation that is necessary to allow access to an informed and do not have unintended or unexpected airport by larger aircraft seeking to provide better air adverse consequences. services to the local community.

66 AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES AUSTRALIA’S REGIONAL AIRPORTS FACTS, MYTHS & CHALLENGES 67 Australian Airports Association Unit 9/23 Brindabella Circuit I Brindabella Park ACT 2609

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