Committee Secretary Senate Standing Committees on Rural and Regional Affairs and Transport PO Box 6100 Parliament House Canberra ACT 2600 Phone: +61 2 6277 3511 Fax: +61 2 6277 5811 [email protected] Dear Sir/Madam, RE: The operation, regulation and funding of air route service delivery to rural, regional and remote communities SOCIAL AND ECONOMIC IMPACTS OF AIR ROUTE SUPPLY AND AIRFARE PRICING; Mount Isa Businesses, Schools, Hospital and most organisations have significant trouble attracting and retaining a skilled workforce. Below are examples of just some of the reasons that expensive airfares impact on Mount Isa and North West Queensland residents; Lifestyle/Cost of Living 1. Impacts on being able to regularly catch up with family and friends who live on the coast. Which often makes residents feel isolated especially after long periods of time of not seeing loved ones. 2. Emergency unplanned trips (needing to support someone sick, injured or dying) and the fear of not being able to afford the flight costs. 3. Puts enormous limitations on taking holidays/trips away. 4. Costs limit travel to Concerts, Museums, Conferences, Sporting Events, Shows, which is extremely disappointing for residents. 5. Missing out of significant events in your families and friends lives; weddings, special birthdays, births, special occasions is absolutely devastating for residents. 6. Limits participation in training and higher education. 7. Isolates the disadvantaged; families, retirees, single and low income households, pensioners (of all kinds). 8. Limits opportunities to participate in representative sport or opportunities with the Arts etc. 9. Can’t plan an event as sales are so far ahead and for such a short time, you could never co-ordinate an event with a sale. 10. Makes it hard for families to access support from family on the coast (ie. Grandparents helping with grandchildren). 11. Limited alternatives to flying (please see Page 5). 12. Missing important occasions, events and appointments due to unreliable aircraft. 2 Business 1. Attracting and retaining a skilled workforce. 2. Bringing in professional expertise and maintenance personnel for particular contracts/jobs. 3. Can impact on tendering for jobs due to workforce or cost of getting specialist personnel on site. 4. Access to training and conferences etc. for personnel. Education and Training 1. Keeping and retaining teachers who don’t earn the same pay as people employed in the Mining Industry, for all the reasons I have listed under lifestyle/cost of living. 2. Training of apprentices 3. Accreditation for courses 4. Participating in courses, conference etc. Sport 1. Limits opportunities to participate in representative sport. 2. Restricts participation in specialized trainings and coaching. 3. Limits opportunities to be selected to state and national teams. 4. Hampers development of local talent. Tourism 1. Tourism is extremely important to Mount Isa and the North West, there is a lot of resources, especially financial put into this sector. 2. Tourists can’t afford to fly to Mount Isa. 3. Events are not well supported by our neighboring cities due to airfares prices. 4. Mount Isa Rodeo airfares are just not affordable to the average tourist or ex Mt Isan. 5. Can’t hold reunions, special occasion parties and expect family, friends, ex Mount Isan’s to travel to attend. 6. Businesses who rely on tourism miss out on the traveller who is time poor and chooses to fly for their holidays. Health Failure to attract and retain health professionals, which impacts on residents for; 1. Access to local health professionals for residents. 2. Long waiting periods for specialist care. 3. Not receiving consistent care from the same specialist, which has led to miss- diagnosis or no diagnosis. 4. Families having to travel to different cities for medical assistance. 5. Not getting a timely diagnosis, over 16 months in one case. 6. With early intervention being key for children, miss-diagnosis or no diagnosis over 16 months is not acceptable. 7. All these factors are leading to mistakes. Case examples on request. 3 DIFFERENT LEGAL, REGULATORY, POLICY AND PRICING FRAMEWORKS AND PRACTICES ACROSS THE COMMONWEALTH, STATES AND TERRITORIES; Is there a possibility to benchmark with a country that has a business model that gives all their states and territories, metropolitan and country areas access to affordable airfares? There must be a country that has figured this out. Otherwise the following could be worth consideration. Standard set price for security screenings, airport passenger fees, price per kilometre for airlines, aviation fuel etc. etc. across Australia. Rural Airports who become non profitable or low profitable could be purchased back by local councils and government to offer compensation. It’s clear that self-regulation isn’t working with airlines, airports and other major players. HOW AIRLINES DETERMINE FARE PRICING; There is no clear or transparent information on how airfares are determined that I have seen. Airlines and airports appear to be targeting the corporate traveller from the mining industry and the government sectors and local residents are getting caught in the cross fire. Sale airfares are so far in advance, you often book a trip on a sale when it’s not convenient to travel and there is no reason to take the trip other than you will plan your holiday around it. School holidays and events are often expensive to travel to, even when booking 5 to 6 months in advance. Qantas using an external party, Alliance, who uses smaller and older unreliable aircraft, is definitely part of the problem for Mount Isa. THE DETERMINATION OF AIRPORT CHARGES FOR LANDING AND SECURITY FEES, AIRCRAFT TYPE AND CUSTOMER DEMAND; A standard set price per passenger could be set. Mount Isa Airport is one of the dearest airports in Queensland. We need to ensure that we get airports to decrease their charges as these charges are passed back on to the passengers through their airline tickets. Airlines pay airport charges for departing and arriving at a destination. Going by QAL’s websites, it cost approx. $18 to depart Townsville and approx. $36 to arrive in Mount Isa, that is approx $54 that QAL take out of your ONEWAY airfare. So a return airfare you are looking at approx $109 that QAL take out of your ticket. That’s one of the reasons we are not going to see $100 each way airfares out of Mount Isa from airlines. In early 2005, QAL who owned Gold Coast Airport, brought Mount Isa and Townsville Airports. The previous year QAL had made an EBITDA of $18,652,000 (2004). QAL are now making an EBITDA of $88,000,000 (2016), this has doubled from the pervious year. Mount Isa Airport doubled its profits in the first year of ownership by QAL. QAL have 4 since stopped reporting their profit margin for Mount Isa Airport. Not many businesses in Mount Isa make millions of dollars in profits each year and the ones that do, usually have a large workforce and bring tremendous opportunities into the city. QAL is a company that makes millions of dollars in profit in Mount Isa but only employs approximately 5 or so local staff, no apprenticeships, no traineeships that I can see. They do have a social involvement, they give $70,000 back to Mount Isa community groups and as of last year, it’s unclear, but it looks like they gave $6,000 to 5 small community groups and I’m guessing $55,000 to the Mount Isa Rodeo and Outback Queensland Tourism Awards, and there is some irony in the last one. The fact that their prices could be impacting on Tourism for Mount Isa and the North West is why we need them to be investigated. Airports in isolated locations should be regulated and my suggestion is they should be given back to their local council to run if the government can’t regulate them. Self- regulation isn’t working. PRICING DETERMINATION, SUBSIDISATION AND EQUITY OF AIRFARES; Establish a standard set price per kilometre. DETERMINATION OF REGULATED ROUTES AND DISTRIBUTION OF RESIDENTS’ FARES ACROSS REGULATED ROUTES; Offer airlines the high profitable routes on condition they take one of the low profit routes, using the standard set price per kilometre. Regulated passenger airport fees across regulated routes could be investigated. AIRLINE COMPETITION WITHIN RURAL AND REGIONAL ROUTES; This is Virgin’s second attempt to give Mount Isa more choice on airlines. The first attempt failed when Qantas gave the Mount Isa public a generous amount of sale airfares which seem to last as long as Virgin did. I do understand that airlines companies need to run at a profit, but any airline that comes to Mount Isa seems to fail to bring reasonable competitive prices. 5 CONSISTENCY OF AIRCRAFT SUPPLY AND RETRIEVAL OF PASSENGERS BY AIRLINES DURING AIRCRAFT MAINTENANCE AND BREAKDOWN; Residents are missing important occasions, events and appointments. Flights are often cancelled, delayed and at times baggage doesn’t always leave Mount Isa with your plane. This is mainly due to old aircraft and breakdowns and coastal routes having priority over Mount Isa. Examples on request ALL RELATED COSTS AND CHARGES IMPOSED BY THE CIVIL AVIATION SAFETY AUTHORITY; I have no knowledge/information on costs and charges imposed by CASA. ANY RELATED MATTERS Families Flying For a family of four to travel to Brisbane by plane, it will cost on the best airfare scenario $2,800. This flight deal would be unavailable around school holidays and it would be closer to $3500 - $5000 around school holiday times. This is usually on a 2 hour flight, that usually offers no entertainment and a weird light snack. Limited Alternatives to Flying 1. Driving Long Distance Not always an option for elderly, pregnant, sick, handicapped and people who don’t own a reliable vehicle.