Australia's regional airports 'unviable' without Federal budget aid; three examples. Part one
According to Regional Capitals Australia (RCA), which advocates for regional capital cities "to have a clear and central role in national policy", the country's airports need urgent (unspecified) financial support from the Federal government in the forthcoming budget or they will become "unviable".
There are many Australian airports - 630 of them - and although some have been privatised by way of lease for 25 years now, and others are grass strips to enable the Flying Doctors to do their rounds, a couple of hundred remain under local council control.
These airports are critical gateways for industry and commerce in towns of widely varying economic constitution, often in the absence of realistic alternative travel modes in one of the largest countries in the world.
The report, in two parts, examines the RCA's claims and then looks at three airports across the country where air travel is crucial to the local economy and why.
Summary
- Australian representative body for regional cities demands financial support for their airports in forthcoming federal budget.
- The country has 630 airports, but most are general aviation strips.
- Over 20 have been privatised by lease since the late 1990s, in major cities and resort areas.
- But many more serve small, medium and large regional cities; they are managed by local councils, and are operating at a loss.
- Regional city airports handle air travel for a population equivalent to Sydney and Melbourne combined.
- CAPA - Centre for Aviation is aware of little construction and capex activities outside the principal airports.
- Three examples from the southeast, west and northwest of the country demonstrate the critical importance of airports to widely varying communities and their needs.
Australian regional city representative body calls for urgent financing measures for airports in forthcoming budget
Regional Capitals Australia (RCA), a non-profit organisation representing Australia's 51 regional capital cities, has called for the country's regional airports to be "front and centre" of the 2024 Federal Budget, which is expected to be handed down on Tuesday, 14-May-2024.
Based out of Wagga Wagga in New South Wales, RCA is not the organisation that has responsibility for the promotion of airports. That task lies with the Australian Airports Association, which represents the interests of more than 340 airports and one that commissioned a full scale report in 2023 by Deloitte to promote the economic and social contribution of Australia's airports. (See the link at the end of this report).
Air travel is focused on the coast, and mainly in the southeast
That report included a 'heat map' of domestic passenger activity at Australia's airports in 2022 (domestic travel accounts for about 60% of the whole). It demonstrated how that activity is skewed towards the main coastal cities and especially those in the southeastern quadrant of the country. (Meanwhile, just about all the international travel is centred on those cities).
At the same time, the map makes clear how many smaller areas of air travel demand there are, some of which face the very real danger of being cut off without central government support.
Heat map of domestic passenger activity at Australia's airports by number of fee-paying passengers in 2022
A population equivalent to those of Sydney and Melbourne combined lives in regional capitals, or their hinterland
RCA is a representative body for small and mid-sized cities (some might be regarded as towns or even villages in other countries) rather than airports, but it has taken up the cudgels on behalf of regional airports - this is not unusual, given the reliance that isolated communities, even quite large, self-sustaining ones, have on air travel in physically large countries.
RCA points out that four million people live in an Australian regional capital, with another four million surrounding residents depending on those cities. This is the equivalent of Sydney and Melbourne's population combined, and more than 30% of the entire population.
Collectively, they contribute AUD225 billion every year to Australia's economy.
Moreover, they are growing quickly; a quarter of regional capitals are growing at a faster rate than the national average.
RCA advocates for regional capital cities "to have a clear and central role in national policy so they are connected and live-able". This includes having a total infrastructure package to support more growth in cities through transport, digital technology, education, health, recreation and culture.
Australia has one of the largest concentrations of airports
Although airports such as Sydney Kingsford Smith, Melbourne Tullamarine, Brisbane and Perth spring readily to mind when thinking about Australia's airports. And while the majority of the primary and secondary ones are managed by private sector entities (via extended leases that were originally under the auspices of the Federal Airport Corporation) and with a great deal of involvement from local superannuation funds (and strict foreign ownership rules), the country has one of the largest concentrations of airports - Australia comes 11th in the global pecking order - but not all of them have been included in these lease agreements, by any stretch of the imagination.
Indeed, approximately a third of all of Australia's airports are owned by local councils.
Airports in Australia
In all, there are 629 airports, including 13 in Tasmania alone, serving a population of 550,000 - although most of the airports, throughout the country, are grass strips.
The majority are operating at a loss
RCA estimates that 60% of regional airports operate at a loss due to "ageing infrastructure, rising security and regulatory burdens and staffing costs".
RCA chair Kylie King stated: "Unfortunately, regional councils are feeling the pinch due to increasing costs of delivery across the board, and they can no longer afford to pick up the shortfall... We are concerned that unless the Federal Government steps in, Australia's regional airports will be deemed unviable, putting the handbrake on regional growth and [putting] our nation's health and security at risk".
Ms King added, "Australia's regional airports provide a critical role in border protection, medivac, defence and disaster response, and it's only reasonable that the Federal Government contribute to their ongoing operations. Regional airports are also key gateways for the movement of our nation's FIFO workforce [Fly-in fly-out, a method of employing people in remote areas by flying them temporarily to the work site instead of relocating employees and their families permanently], air freight, business travel and the growth of new jobs and aviation industries.
She went on, "For example, the City of Geraldton relies heavily on the local airport for the transport of mining workers, tourists, Royal Flying Doctor Service, RAAF (Royal Australian Air Force) deployments and connections to regional Western Australia. Unfortunately the lack of funding for capital upgrades is impacting the potential for tourism growth, airfreight expansion and aviation services for the region."
There are 200 airports under local council control
An estimated 200 regional airports are owned and operated by local councils across Australia, but rising costs means that many airports are operating at a loss and are a burden on regional ratepayers; consequently, unless the Federal Government steps in, many will be deemed unviable, putting the handbrake on regional growth.
The number of 200 airports is too many to consider in detail in this report. RCA does have a scheme in which its members are advocating for what it calls The Rise of Regional Capitals.
Those cities already taking part are listed below, from which the airports at three of them (in bold) will be examined in detail.
- Albury City Council
- Armidale Regional Council
- Ballarat City Council
- Broken Hill City Council
- City of Bunbury
- City Of Busselton
- City Of Greater Geraldton
- City Of Kalgoorlie-Boulder
- City of Karratha
- City of Wagga Wagga
- Fraser Coast Regional Council
- Greater Geelong City Council
- Griffith City Council
- Latrobe City Council
- Shire of Broome
- Tamworth Regional Council
- Town of Port Hedland
- Dubbo Regional Council
Little construction work taking place outside major city and resort airports
Before that it is worth considering this table, below, which is of known airport construction and capex activities at Australian airports, from the CAPA - Centre for Aviation Airport Construction Database.
Current known airport construction and capex activities at Australian airports
Of these nine airports, six were privatised by lease from 1997 onwards.
Only Albury, Newcastle (both of them council-owned) and Sydney Bankstown (a private company) lie outside the FAC privatisation system.
In other words, there is little evidence of much construction work taking place at the variety of airport that mainly concerns the RCA.