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Australia's Regional Airports Facts, Myths & Challenges

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Australia's Regional Airports Facts, Myths & Challenges AUSTRALIA’S REGIONAL AIRPORTS 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 AIRPORT 31 REGULATION OF AUSTRALIAN AIRPORTS 33 TRAFFIC AT REGIONAL AIRPORTS 40 THE WIDER ECONOMIC GAINS GENERATED BY AIRPORTS 48 THE MYTHS 51 MYTHS ABOUT AUSTRALIAN AIRPORTS 52 AIRPORTS ARE POWERFUL MONOPOLIES 52 AIRPORTS ARE A LICENCE TO PRINT MONEY 52 AIRPORT OPERATORS CONTROL EVERYTHING THAT HAPPENS AT THEIR AIRPORT, ESPECIALLY NOISE 53 AIRPORTS ARE PASSIVE ASSETS THAT RUN THEMSELVES 54 RUNNING AN AIRPORT IS JUST LIKE RUNNING A CAMPING GROUND 54 AIRPORTS RENTS SHOULD NOT BE SET AT MARKET RATES FOR AIRPORT TENANTS 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 AVIATION SAFETY REGULATION 62 LIVING WITH THE COST OF SECURITY REGULATION 62 AVOIDING UNNECESSARY AND INCONSISTENT REGULATION 64 MAINTAINING REGULATORY AWARENESS 64 COMPETITION 64 OPTIMISING NON-AERONAUTICAL OPPORTUNITIES TO SUPPORT AERONAUTICAL OPERATIONS 64 SUSCEPTIBILITY TO BROADER ECONOMIC CONDITIONS 65 ENVIRONMENTAL PRESSURES 65 PROMOTING A BETTER UNDERSTANDING OF REGIONAL AIRPORTS 65 Care has been taken to ensure the factual accuracy of the material in this paper but time and the lack of readily available public data sources does mean that some data may be inaccurate, out-dated or incomplete. The AAA 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 aerodromes Australia wide – from the airport sector. The AAA facilitates co-operation local country community landing 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 Adelaide, Brisbane, Cairns, Canberra, contributing to an air transport system that is safe, Darwin, Gold Coast, Hobart, Perth, Melbourne and secure, environmentally responsible and efficient Sydney airports. for the benefit of all Australians 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 (general aviation 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 airline 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 airlines 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
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