Airline Affairs

Australian has been slowly acquiring East- em shares since it bought a 33% stake in 1987 from Eastwest after it was forced into

divesting its stake by the Trade Practices Commission as a condition of Eastwest’s sale to TNT Limited and Newscorp Limited.

Eastern will now become a subsidiary of Australian, operating alongside others including the recently acquired Sunstate Airlines (Mildura) and Sunstate Queensland, as well as the recently formed Australian Airlink subsidiary flying BAe 1468 on routes in north Queensland and the Northern Territory.

Australian’s regional airlines division manager, Doug Gillies, says Eastem will keep its name and present fleet of nine Dash 8 and Jetstream 31 aircraft to thirteen destinations in New South Wales including Grafton, Port Macquarie, Kempsey, Taree, Newcastle, Tamworth, Armidale, Glen Innes, Moree, Narrabri, Cooma and Sydney, and interstate routes to Canberra, Melbourne, Devonport, Launceston, Coolangatta and Brisbane, as well as the Sydney/Lord Howe Island service recently taken over from the defunct Norfolk Airlines.

Australian says it will be aggressively using the Eastern arm to build a competitive regional feeder network in line with its and has already targeted the lucrative Coffs Harbour/Sydney and Lismore/Sydney services when they come up for licence renewal in mid 1992.

Mr Rowarth says the takeover will mean Eastem will be able to take advantage of Australian’s capital pool for restructuring into deregulation and Australian’s chairman, Ted Harris, says the govemment carrier’s decision to take the remaining shares in Eastern indicated a continuing program of growth in key regional markets.

Meanwhile Mr Rowarth, who started East-ern a quarter of a century ago with the small charter firm Tamair, says he’ll be staying on with Eastern over the next twelve months to two years. He says once a general manager is appointed by Australian hell slowly ease away from day-to-day operations.

At this stage it’s believed Eastern’s mainte- nance facility in Tamworth will remain as the main base for the Dash 8s and Jetstream 31s. (Halden Boyd)

• Northwest Eyes Qantas, Aims for Australia/Japan Rights:

Northwest has become the second US carrier, after United, to actively push for Japan/Australia rights, whilst also being declared as one of the front runners for an investment stake in Qantas.

Northwest commenced services into Australia during July after buying the Hawaii/ Australia route rights previously held by Hawaiian Airlines. It offered special start-up fares to attract travellers, and in the process sparked a short fares war on the transPacific route. And even before its first Australian service, the airline also began pushing for additional route rights (Japan/ Australia) and also became the first airline to publicly declare its interest in a stake in the soon to be 49% privatised Qantas.

British Airways, Japan Airlines, American Airlines and Lufthansa had all previously been mentioned as possible investors in Qantas, however Northwest pushed ahead to publicly declare its interest, and is believed to have already held talks with Federal Finance Minister Ralph Willis and other government representatives about the possible investment stake.

Northwest also started pushing for Japan/ Australia route rights, even though United had previously been knocked back with a similar request (refer p. 17 July 91 AA). North-west won approval from the US Transportation Department to launch services from New York to Sydney via Osaka, however it still had to gain approval from both the Australian and Japanese govemments, though it was not considered that Northwest stood any real chance of gaining full approval. It is now clear however that US carriers are very keen to gain a foothold on the valuable Japan/Australia market.

Meanwhile, in a move to counter North-west’s entry into the Australian market, Qantas has recommenced services from Sydney to San Francisco via Honolulu, al route which it had originally pulled out of in March this year as part of its rationalisation of Pacific services. The service will be flown

four times weekly by 747s from Sydney to Hawaii, and then 767 to the US West Coast (this latter being an extension of the Cairns/ Honolulu 767 service). Qantas has also extended its daily nonstop Sydney/Los Angeles service so that the flight wil now originate in Melbourne.

 Australian Warns Against International Carriers:

Australian Airlines would seek to launch services to regional countries such as New Zealand if international carriers like as Qantas and Air New Zealand were allowed into the domestic market, according to CEO John Schaap.

Mr Schaap expressed concern that the Federal Government may be tempted to allow international carriers to fly interstate sectors if deregulation proved to be not offering enough competition. If this were so, then he predicted that Australian would seek to fly trans-Tasman services under the auspices of the Closer Economic Relations (CER) program between Australia and New Zealand. Under CER, a single trans-Tasman market would be created. If, therefore, Air New Zealand and possibly Ansett were able to take advantage of the situation by offering domestic services between various Australian and New Zealand centres, Australian too would push for reciprocal rights. And if Qantas were also to gain ready access to the domestic market, then Australian “would want reciprocal access to nearby interational markets. ”

 China Experiencing Strong Traffic Growth:

China’s airline traffic is expected to grow at an annual rate of 8. 6% during the next five years, according to China’s Civil Aviation Administration.

The Adminstration states that in 1995

China’s state controlled and independent airlines will carry more than 25 million passengers, up from 1991’s figure of 16. 6 million. Overall turnover will expand at a yearly 8. 2% rate to 3. 7bn tonne/km, while an estimated 8. 3% annual growth rate in cargo and mail carriage will result in 550,000 million tonnes being carried in 1995.

Meanwhile, competition for China’s SUS4. 5bn Trunkliner program is still strong between contenders McDonnell Douglas, Boeing and now also Airbus to provide China with a 150 seat airliner. MDC has already entered negotiations with Chinese authorities for the co-production of 150 MD-90s to fulfil the Trunkliner requirement. To be known as the MD-90-30T, the co-produced aircraft would have 50% Chinese involvement, as well as 20-30% Chinese involvement in the aircraft’s V-2500 engines and about 10% of the Honeywell avionics. As well, MDC will have to pay royalties to China if it chooses to sell the MD-90-30T to other, non-Chinese operators.

However though negotiations are proceeding well and MDC is quietly confident, the Trunkliner deal is by no means sewn up. Boeing therefore has renewed pressure to sell its 737-300 for the Trunkliner program. It has recently demonstrated the 737-300, and Air China ordered three of the aircraft in mid-April. And Airbus has also recently reentered the fray, having demonstrated its A320 to Chinese authorities, it being the first time the A320 had been flown to China.

 Recession, Fares War Ironically Bolsters Tourism:

The Australian tourism industry has, ironically, begun mak- a marked comeback as a result of both the recession and the deregulated airline industry’s fares war.

ing Airlines are fuelling the tourism comeback by offering bargain priced fares to get trayellers to fly. The tourism industry has made use of this situation to cooperate with special packages aimed at attracting holiday makers to what were (and to some extent still are) struggling tourist destinations. The airlines have concentrated to a large degree on the Queensland holiday market, however also benefitting are destinations such as Perth, Tasmania, South Australia and other capital cities. Tourism authorities note that ironically the recession has made even more people take advantage of the fares situation. There are now a large number of unemployed people willing to splurge with redundancy packages to at least enjoy a good holiday.

Eastwest in particular is targeting the Victorian market to fly holiday makers to Queensland, and its fares are being matched by other carriers (around $175 one way cheapest fare). Such is the value of the savings to be obtained, according to tourism authorities it is now actually cheaper with special fares to fly from Melbourne to Cairns than either driving or catching a bus or train. Even with the standard Compass economy fare (being matched by other carriers), a traveller will pay only an additional $50-60 to fly one way rather than travel by vehicle, saving time and money from regular food stops or overnight accommodation en route. As an example of how deregulation has stimulated the domestic market, even in a recession, RPKs have increased by 26% for the first half of this year compared with 1990 while the current figures are even. 13% up on the record performance of first half 1988.

But besides Queensland benefitting from attracting holiday makers who might other wise have flown overseas, other States are also taking advantage of the situation. Tas- mania for instance is luring many Victorians across Bass Strait for shorter holidays, while Perth is now much more affordable a destination for residents of the East Coast. Vic- toria meanwhile is actually predicting a 12% rise in the number of domestic visitors, many of whom will arrive by air attracted by the success of The Phantom of the Opera staging in Melbourne.

The musical is also attracting many New Zealanders on package tours, while elsewhere (especially in Queensland) the growing number of international tourists are helping to revitalise the industry. A record 2. 4 million international tourists are in fact predicted to arrive in Australia this year.

Singapore Base:

Singapore Airlines has commenced a major expansion program for its engineering and overhaul services, aimed to better accommodate its own growing fleet and also third party maintenance work.

AIRLINES EXPANDS A second maintenance hangar is being built at the airline’s Changi Airport base and there are plans for a third to be completed in 1996. The present maintenance hangar accommodates either three 747s or two 747s and three smaller aircraft; the second hangar will include bays for two (with the potential for ultimately four) 747-400s. Singapore is also increasing capacity at its engine overhaul facility from the current 18 bays to 40 by mid 1992. This is important because by the year 2000 Singapore Airlines will operate over 90 commercial aircraft.

The airline has also bought a 10% stake of Singapore Aviation Services (SASCO), which is a joint commercial maintenance venture between Singapore Aerospace and Japan Airlines. SASCO, which started operations in August 1990, has already completed four 747 Section 41 modifications for Kuwait Airlines, and is contracted to do seven such mods for JAL. A second two bay hangar will be built in 1993 to increase capacity. Singapore Airlines and SASCO will continue to compete against each other for contracts, however officials have noted that if a contract is too big for either company, joint bids may be made.

New Fac Study Forecasts Strong Growth in International Passenger Numbers:

International passenger movements at Australia’s major gateway airports will grow by an average 6. 1% per annum over the next two years, according to a study commissioned by the Federal Airports Corporation (FAC). And in the longer term, international passenger movements are forecast to increase by an average 4. 7% between now and 2010.

The study forecasts that during 1991 and 1992, average annual passenger growth at the five major international airports of Sydney, Melbourne, Brisbane, Perth and Adelaide, will range between 5. 3% (Melbourne) and 7. 1% (Perth). Next is Brisbane (6. 4%) followed by Sydney and Adelaide (6. 1%). However, the report shows that during the period 1991-2010, the fastest growth in international passengers will occur at Adelaide (5. 8%) and Perth (5. 4%). During the same period, Brisbane’s traffic will grow by an average 4. 9%, Sydney 4. 5% and Melbourne 4. 2%. The varying growth rates forecast for individual airports are reflected in the changing market share of international traffic at each airport. For example, while Sydney will continue to dominate in absolute terms, its proportion of total international passengers is expected to decline slightly from around 50% in 1990 to 48% by 2010. A similar decline in Melbourne’s market share is also expected.

The study shows that of the three fastest growing airports – Perth, Brisbane and Adelaide – Perth will record the largest increase in international passenger market share, from just over 10% in 1990 to around 12% in 2010. The report says that key issues to be considered in preparing the forecasts were establishing the traffic base, the short term economic outlook, the effects of the Gulf War, Qantas route strategies and changes in airport market shares.

Compass Takes Delivery of Fourth A300:

Compass Airlines has taken delivery of its fourth Airbus, an A310 (on lease from Canadian Airlines).

The introduction of the latest Compass aircraft will enable the airline to both improve schedules and also reconfigure all cabins to eight abreast seating. The first two Compass A300 aircraft entered service with nine abreast (3-3-3) seating for 280 passengers; both will now be reconfigured with 2-4-2 seating. The third aircraft arrived direct from Toulouse with eight abreast (2-4-2) seating for 212 passengers, however it was not fitted with the popular inflight video facilities and will consequently be upgraded to include inflight video screens for passengers. The fourth A300 is to be delivered later this year with both the video facilities and the required seating configuration. This A300 was the one damaged in a defuelling accident (refer p. 6 June 91 AA) in April and has been replaced by the leased Canadian A310.

With the new aircraft in service, Compass commenced services into Adelaide between Melbourne and Sydney on 15 July. As well, the huge success of the once weekly Perth/ Cairns nonstop service (consistently aver-aging over 80% load factors) has influenced Compass management to introduce a similar Perth/Brisbane service from 1 September. By that time the airline will have four A300-600Rs and a single A310 in service, with the sixth aircraft, another Canadian A310, expected to enter service by the time Compass celebrates its first year of flying on 1 December.

 Australian Offers New Sunshine Coast Flights and Deals:

Australian Airlines is to fly direct from Sydney to Maroochydore on Queensland’s Sunshine Coast four times a week, and is also offering a $299 three night holiday package special to celebrate the new services.

The new Maroochydore service, begin-ning on 3 August, follows the strong success of the airline’s until now weekly Night Flight, which has been operating out of Sydney on Saturday evenings. The new services will be flown non-stop by 737 to Maroochydore from Sydney each Saturday, Sunday, Tues- day and Thursday. Return economy airfare, excluding accommodation, is $250-which makes the $299 special airfare/accommodation package (valid from 3 August to 22 September, and also including a Holiday Bonus Card which can obtain discounts on entertainment, tourist attractions and restaurants) even more attractive for those seeking a mid year break.

Kuwait Rises From the Ashes:

Kuwait Airways has signed a letter of intent with Airbus Industrie for up to 24 aircraft.

Kuwait Airways was able to get back most of its aircraft seized by the Iraqis following the invasion of Kuwait, however it has nevertheless initiated a fleet modernisation pro- gram to both expand and also replace some of its older aircraft, such as its Boeing 7278. The airline has therefore decided to place firm orders for three A320s, three A310-300s, five A300-600Rs (plus options for three) and four A340-200s (options for another four), as well as having options on two A321s. It is already a long established Airbus customer, having previously purchased five A310-200s and three A300-600s, these types now reentering service after being seized by Iraq and then interned in Iran.

Kuwait Airways ironically was able to take advantage of delivery slots made available by some order cancellations and deferrals which were the result of traffic declines caused by the Gulf War, and will therefore receive its first A320s and A310-300s in 1992, followed by the A300-600Rs in 1993; deliveries of the A340-2008 are not scheduled to commence until 1997.

 Auckland/Sydney Still Top Australian International Route:

The Auckland/Sydney route generated the largest number of air passengers into Australia in the year to January 1991, however Tokyo/Sydney was not far behind and is indeed predicted to catch up in the course of this year.

Ten city pairs (refertable) were responsible for delivering about 40% of all air passengers who arrived in Australia, with Sydney being in six of the top ten city pairs (over 75% of arrivals are at Sydney) and Auckland in three (New Zealand still provides the greatest number of international tourists to Australia!) The top Asian departure point was Tokyo bound for Sydney, which has been steadily growing over the last three years, followed by Singapore/Sydney at number three: Singapore was an important departure point for arrivals into several cities, most noticeably also Perth and Melbourne. Top US departure point was Honolulu bound for Sydney (a big jump in numbers) at number four, followed by Los Angeles/Sydney at number six. No European cities were in the top ten.

City pairs not in the top ten but which have shown noticeable growth in recent years include Tokyo/Cairns, which recorded a massive 290% increase in arrivals in the year (up from 22,996 to 89,842). As for New Zealand arrivals, though that country remains the top provider of inbound tourists (particularly to Melbourne where Qantas’ special Phantom of the Opera deals are proving a big winner), numbers have shown an overall marked drop.

Us Summer Traffic Soars:

US airlines recorded a confidence boosting upswing in the number of air travellers during May (northern hemisphere Spring/Summer), following a somewhat dismal winter and early Spring period.

The larger and more financially secure US carriers were the big winners, each incidently able to offer passengers strong incentives to again travel by air. United recorded a 14. 9% increase in passengers over the previous May, Delta 15%, American 6. 6% and Northwest 6. 1%. Weaker carriers posted smaller gains and even losses; notable among the latter were TWA, whose traffic dropped 19. 3%, and PanAm which recorded a 16% drop, both airlines having sold their prime transatlantic London rights within the last year (TWA to American, and PanAm to United).

 Eastwest to Finish Year in Red:

Eastwest Airlines’ results for the 1990/91 financial year will show that the airline has dropped very much into the red.

Despite a 33% growth in revenue over the last year and a recent growth in market share, the airline will inevitably post a loss for the financial year. Though the airline has been unshackled by deregulation and is operating as the Ansett Transport Industries’ leisure market specialist, Eastwest has suffered from the combined effects of recession and a rapid increase in capacity over a relatively short period. The airline switched to BAe 146s from its previous Fokker F28 fleet, with the result that load factors are inevitably down and many passengers are travelling on cheaper, special fares.

Meanwhile, there are some early predictions of a better year in 91/92. The airline has claimed that there has been a marked increase in business, with bookings over the past three months double that of the previous year (bearing in mind that tickets are also cheaper and therefore more desireable). The overall effects of deregulation can be readily gauged by the latest DoTC data which reveal an increase of 26% in RPKs for the first six months of this year as against the same period in 1990 and an increase of 13% against the halcyon first half of 1988.

As for rumours of a possible merger with Ansett Australia, general manager Neil Berkett has stated that owners TNT and News Corp want Eastwest to continue as a separate entity with its own board and management.

 Australian Share in Qantas Barred:

Allowing Australian Airlines to invest in Qantas would ultimately have made the international carrier unprofitable, according to the Federal Minister for Transport and Communications, Kim Beazley.

At the recent ALP national conference, Mr Beazley stated that the Government had decided to exclude Australian Airlines from bidding for a stake in Qantas because it would lead to “an almost impossible situation”. The ministerstated that if Qantas were able to enter the domestic market (either by having Australian own a stake in Qantas, or vice versa), it would mean that the government would still be cross subsidising the Australian domestic aviation market, which it no longer wishes to do. This would “be an almost impossible situation because unquestionably it would be unfair competition,” according to Mr Beazley. “It would be unfair competition which would be resolved only in one way, in public demand, and that would be. . . by fully privatising Qantas. ” AA Comment: It is interesting that Mr Beazley considers that the Federal Government actually subdises either Australian or Qantas considering that all they do is bleed them dry when they make a profit and specifically reduce their capability of achieving high levels of profitability by ensuring their very high debt to equity ratios make them fiscalcripples.

Australian Share in Qantas Barred:

Australian Airlines has offered redundancy packages and early retirement to employees to effectively. reduce staff numbers systemwide.

The offer was made as part of a review of operations which was instigated by the onset of the recession. The airline is hoping to reduce staff numbers by about 900 and also implement some reforms in work practices and operations. Letters offering redundancy packages and early retirement to staff over 55 have been sent to all personnel, though at this stage there is little indication about how successful the bid to voluntarily reduce numbers will be. The airline meanwhile continues to struggle to reduce costs systemwide to cope with reduced revenues which are primarily due to reduced incomes, the result of the need to offer special fares to compete with deregulation.

Qantas Does Well in Us Survey:

Qantas has performed consistently well in a recent survey of US travellers.

According to results compiled by consultancy firm Landor Associates, Qantas is regarded highly by both high and low income travellers. Unfortunately the survey does not rate Qantas against US carriers, but only against non US airlines. In the Top 10 favoured non US airlines ranked in esteem by income level, Qantas scored 3rd overall, coming 5th in the $US10-25,000 income range, 2nd $US25-50,000, 2nd $US50- 100,000 and 1st $US100,000+; SAS came first overall, Lufthansa 2nd, JAL 4th, then KLM, Swissair, BA, Air Canada, Air France and EIAI.

For the Top 10 highest regarded non US carriers by age group, Qantas again came 3rd overalt age 18-29 7th, 30-39 2nd, 40-49 2nd, 50-59 6th, 60+ 5th. Rankings for other Top 10 airlines were the same as for income level. For its recognition as a brand name (by income level, it again came third: $US10- 25,000 5th, $US25-50,000 3rd, $US50- 100,000 2nd, $100,000+ 3rd. Rankings for other Top 10 non-US airlines in this category were (in order) BA 1st, Air Canada 2nd, Lufthansa 4th, then Air France. SAS. Swissair, Japan Airlines, KLM and again JAL (Japan Airlines/JAL were tested as two different brand names, though the exact reason remains unclear).

The Top 5 US airlines were consistently American, United, Delta, TWA and PanAm, followed by Northwest, USAir, Continental,

Eastern and Braniff in differing orders.

 Higher Agent Commissions Bring Compass More Business:

Compass Airlines has determined that paying travel agents higher commissions boosts business.

The airline conducted an operational experiment in May – it paid agents 12. 5% commission on cash tickets and 10. 5% on credit card purchases – which resulted in a significant increase in sales activity for Com- pass tickets. Tests were also conducted to determine how much of the extra business was due to lower fares, and how much to higher agent commissions; it was determined that higher commissions did have much to do with the extra business. This can only be good news for agents should Com- pass determine that offering higher commissions as ops normal will pay off.

Meanwhile, Compass is still insisting that agents owned by its competitors (Ansett and Australian) are still trying to persuade passengers to fly with these airlines, rather than with Compass. As for the fares offered, the Trades Practices Commission is investigating Compass allegations that ‘predatory pricing’ is being undertaken by both Australian and Ansett. The TPC has indicated that it may be illegal if the two major airlines are offering substantial fares reductions only on routes flown only by Compass, however it also notes that there is a fine line between predatory pricing and fair competition.

 Air Pacific Announces Expansion Plans:

Fiji’s international airline, Air Pacific, will expand its fleet and services within the next five years, adding North America and Taiwan to its Australian, New Zealand, Japan and South Pacific routes. Air Pacific planners project a SF41m ($A36. 3m) for the five year period, with at capital expenditure of $F89m (SA78. 8m) with an additional expenditure of SF121m (SA107m) when the airline requires additional aircraft. The expansion plan is aimed at not only increasing the number of tourists to Fiji over the coming decade, but also to allow Air Pacific to continue to carry more than 50% of passengers into the island nation. This latter aim would entail winning 220,000 of the total 420,000 passengers forecast for Fiji in 1995/ 96, with the Australian market remaining one of the key areas for revenue generation.

As for route expansions, this entails: intro-ducing a charter operation to Los Angeles in 1993 with the expected inauguration of a scheduled twice weekly non stop 767-300 service by 1998; the introduction of a fortnightly 767 service to Taiwan in 1994, with a

commercial alliance with a Taiwanese carrier and the introduction of a third weekly 747 service to Tokyo’s Narita Airport in 1995, and seeking additional rights to Nagoya and Osaka, and possibly a commercial alliance with a Japanese carrier.

New Computer to Speed Airport Check-in:

Anew $6 million computer system to be installed at Sydney Airport’s International Terminal later this year promises to speed passenger check-ins, ease congestion and give the 41 airlines using the terminal better control over baggage sorting.

The new CUTE 2 (Common User Terminal Equipment) utilises a network of intelligent workstations, which will allow all airlines to access their own reservations and departure control systems from a single, common computer terminal, replacing the old airline specific terminals. CUTE 2 will be installed and managed by the Paris based SITA, with the cost of running the system to be shared pro rata by all airlines using the equipment. One of the main advantages of the CUTE 2 system is that it allows each individual airline to use any check-in desk at the airport to process passengers. Instead of being limited to check-in counters with the individual

airline’s “dedicated” computer equipment and signposting, airlines will now be able to use spare terminals at other airlines’ counters if need be. Thus, if there is a backlog of passengers waiting to check in, an airline will be able to direct passengers to other counters and therefore ease flow during peak periods; this could not previously be done. Such will be the new system’s effectiveness, that Qantas expects to save $800,000 per year by simply being able to better handle checked-in luggage.

 Opposition Focuses on Open Air- Port Policy:

Direct flights between New Zealand and tourist destinations in northern New South Wales and southern Queensland could be a reality within a few years, according to the Federal Shadow Aviation minister, David Jull. Mr Jull, visiting the New South Wales north coast, claimed the Liberal Party was committed to “opening up the skies” and increasing competition in air services both within Australia and to overseas carriers. Mr Jull claimed the Australia/New Zealand ties could be established under the Closer Economic Relationship agreement (CER) between the two countries.

Mr Jull said the idea of “open airports” are high on the agenda at talks between Aus- tralia and New Zealand to be held next year, and went as far to say at least one New Zea- land carrier is already looking at providing

services to Coffs Harbour and Ballina in northern New South Wales and the Sunshine Coast in Queensland.

He said with deregulation and “open airports” Australia could see a doubling in the number of international tourists entering the country. Mr Jull said the trend is international tourists are venturing away from five star accommodation in major capital centres, seeking a more natural environment and a better understanding of the nature of the Australian people outside of cities. (Halden Boyd)

 New Fac Study Forecasts Strong Short Term Growth in Domestic Airline Passengers:

Domestic airline passengers using Australia’s four busiest airports Sydney, Melbourne, Brisbane and Adelaide – will grow by an average 5. 6% to 6. 6% per annum over the next two years, according to a study commissioned by the Federal Airports Corporation (FAC).

However, in the longer term, forecast aver-

age annual growth between 1991 and 2010 is expected to be more in line with historical trends, ranging between 3. 2% (Adelaide) and 3. 8% (Sydney). This reflects the aberration of the domestic pilots’ dispute which saw a sharp downturn in traffic.

The study reveals that Australia’s fastest growing airports, in both the short and long term, are those where leisure travel, as opposed to business travel, is important to development. In the short term, leisure destination Coolangatta, with average annual domestic passenger growth of 12. 6%, is a clear leader, followed by Alice Springs (10. 2%) and Perth (9. 8%); between 1991 and 2010, annual growth at these ports is forecast to average between 5. 3% and 7. 1%.

The study report says the relatively high rates of passenger growth in the short term can be attributed, in part, to an anticipated boost in travel following deregulation of the domestic airline industry. However, the principal cause was the pilots’ dispute, which caused a sharp downturn in traffic during 1990, the base year. Aircraft movements at most airports are expected to grow faster than passenger numbers, reflecting an expected increase in service frequency and a corresponding decline in average load factors during the first years of deregulation.

The study also produced projections for the total number of domestic airline passengers carried in Australia. Passengers embarking at Australian ports are forecast to rise from 12. 9 million in 1990 to 14. 1m in 1991 and 14. 7m in 1992. Between now and 2010, an average annual increase of 4. 2% is forecast. An in-depth analysis of the FAC report will be given in our next issue.