Federal government committed to funding regional airports

A Cathay Pacific Boeing 747-8 at Wellcamp Airport on Monday 23 November 2015 (Lenn Bayliss)
While Brisbane West Wellcamp is going from strength to strength, other regional airports are struggling. (Lenn Bayliss)

Minister for Infrastructure and Transport Darren Chester says the federal government is committed to help regional airports meet the financial challenges in the years ahead.

While the likes of privately-owned Brisbane West Wellcamp have been able to grow from nothing to having three domestic airlines and a once-weekly freighter service to Hong Kong in the space of two years, the story for other smaller airfields around the country is far less positive.

The state of the nation’s regional airports was highlighted in September, when the Australian Airports Association released its Regional Airport Infrastructure Study conducted by ACIL Allen Consulting.

The report found regional airports faced a significant funding shortfall in the years ahead to maintain existing facilities and upgrade their airfields to cope with the expected growth in the sector.

“On average regional airports had a six per cent funding gap in 2014/15 between the expenditure required to operate the airport and subsequent revenue collected from its operations,” the report said.

“The funding gap was 3.4 per cent for regular public transport (RPT) airports and 45.6 per cent for non-RPT airports.”

Chester acknowledged the difficulties faced by many regional airports, noting “not all regional and remote airports can be a Wellcamp or Canberra, no matter how entrepreneurial their managers”.

To that end, the Minister said the government’s Regional Aviation Access Programme, which provides funding for remote air services subsidies, remote airstrip upgrades and remote aerodrome inspections, has so far this year assisted upgrades at Merimbula, Moruya, Port Macquarie, Tamworth and Busselton-Margaret River airports.

And the latest round of the National Stronger Regions Fund has recently approved funding for works at Derby, Parkes and Dubbo airports.

“At the local level, it can be a challenge to adequately fund the ongoing maintenance and development of regional or remote airports,” Chester said in a speech to the Australian Airports Association annual awards dinner in Canberra on Wednesday night.

“Other levels of government are generally responsible for these airports within our federal system. However, we do provide funding for access and safety upgrades through the Regional Aviation Access Programme.

“I am committed to continue to fund our regional and remote aerodromes and will work with the AAA on how best our government can deliver the appropriate support to this vital infrastructure.”

The AAA report, published in September, estimated regional airports with fewer than 500,000 passengers movements a year spent $185 million in 2014/15 to maintain and improve operations.

However, expenditures for regional airports were expected to rise by 38 per cent over the next decade, putting even more pressure on already stretched budgets, with 61 per cent of the nation’s regional airports running budget deficits in 2014/15.

Further, some 40 per cent of regional airports expected to have “persistent budget deficits over the next 10 years”.

“Many regional airports in Australia are operating at a loss each year, and are heavily dependent upon cross-subsidisation by their local government owners who face multiple and competing demands on their limited financial resources,” the report said, adding that airport owners faced financial stress from the costs of maintaining and operating the airport.

“Regional airports also face great challenges in upgrading facilities to meet future aviation needs.

“Across Australia’s regional airport network, it is expected that the annual budget deficit will be $17 million per year, equating to a $170 million shortfall in essential infrastructure and maintenance funding at regional airports over the next 10 years.”

Chester noted that as a regional member of parliament – the Minister is the Member for Gippsland in Eastern Victoria – he was “acutely aware of the importance of aviation to regional, rural and remote communities”.

“I thank the AAA for its recent report on Regional Airport Infrastructure, highlighting the challenges that these essential transport hubs are facing,” he said.

“Providing vital access to health care and other professional services for many, aviation services have also been a key enabler of growth in mining, agriculture and tourism within many of our regions.”

Comments

  1. Bon says

    It is nice to see that funding is considered. However, funding is not only the problem. When we look at federal airports lease to private companies, there are simply too many of a legal and political obstacles which make it difficult for airport operators federal leased airports to develop and run a profitable business. Example, the requirements for the Master Plan and Major Develolment Plan are outdated. Why should an airport operator consult the public whether to extend the size of an existing terminal building? To submit the Master Plan every 5 years is highly costly and very time consuming. We look at noise regulation at Essendon airport, a 45 ton maximum take off weight restriction is in place, dating from noise data of 2001 ( Think the year is correct). Modern jet aircraft are in some cases more silent that an old Beech Baron. Moorabbin airport faces the same issues, they would have a perfect business model if some larger aircraft could fly in and out, which would need some runway extention. Not possible because of the public that decided to move next to an airport and now complain about aircraft noise. The list goes on… Funding is a positive step but changes in the Airports Act are needed.

  2. Ben says

    I travel through many regional airports regularly. There are so many airports that are either not attracting RPT at all or if they are, they are, they’re not fulfilling their potential, I suppose it may be a case of ‘build it and they will come’ as in the case of Wellcamp. Having the infrastructure is one thing, but you then have to have the right operator come in at the right time with the right aircraft and a good business model. Kudos to airlines like Jetgo and Rex who seem to have found their niche. Looking at my home airport at Port Macquarie. It’s had a gradual upgrading over the last 5-10 years. Is in the position where it now has an 1800 x 45 metre upgraded runway and much bigger ramp area. It can probably now easily handle an A320 or 737. However it rarely handles anything bigger than an ATR-72 from Virgin. Qantas occasionally uses the Q400 but mainly the Q300 are the default aircraft. Jetgo has recently started jet services direct to Melbourne but even these are very small regional jets. We desperately need a bigger terminal. If 2 flights are operating at once the terminal and carpark are swamped. So if a fully loaded 737 or A320 was to start services here, well yes it would be able to land, park and take off easily – However loading and unloading it with the present terminal would be somewhat chaotic. We’ve been told an upgraded terminal is coming – but look at the missed opportunities until then. Infrastructure planning for all regional airports has to keep pace with or exceed demand. Then yes if it is built they will come.

  3. Martin says

    Air bridges for HBA??

    Seems the carriers think HBA is a regional destination.

    But go look at the recent domestic tourist numbers into Tasmania – up 11%.

    Time for an upgrade for a capital city airport.