Reece

Not a big ask, but obviously one that has been rejected by Cabinet in its fear that this might actually lob a few dollars off the potential sale price of the major airport in question if it is seen to be aligned with a GA airfield.

The implications in this for GA are significant to say the least. We don’t have space to revisit the arguments for and against breaking up the FAC (that was covered in-depth in our June and July issue Recces last year), but you would think that somebody within the Minister’s hierarchy or ALP Caucus would remotely understand that the loss-making airports are not only unsaleable, but that they will have to be financially supported by the Federal Government (i.e. you and me) to remain operational once the FAC as we know it is disbanded.

The situation as it presently stands is that of the 22 FAC airports, just three are highly profitable (KSA, Tullamarine & Brisbane), four more make a healthy but numerically insignificant return (Adelaide, Perth, Coolangatta and Canberra), whilst Launceston and Hobart just break even nowadays largely thanks to the massive increase in tourism to the Apple Isle. The remainder, as illustrated in our table on page 22 for the 93/94 financial year, including every GA airfield, make a loss.

So what happens to Bankstown from 1997, or Moorabbin, or Essendon? The latter airport continually has to fight for its life with several nearby councils preferring it to be parkland and townhouses. With the stigma of its name doused in red ink, Essendon will certainly find it even more difficult to remain as an operational airport as we enter the next century.

What of Bankstown, Camden and Hoxton Park? Or for that matter such important airports as Darwin and Alice Springs? What will happen?

I will tell you, though you have probably figured it out for yourself by this stage.

The big three airports are sold off (probably with large overseas shareholdings just to ensure that more Australian dollars disappear overseas rather than stay in Australia where they can do some long-term good for our nation) and without the constraint of an industry-wide pricing regime, the movement charges rise, and rise substantially, similar to levels that they presently are at Cairns, which is well above the FAC average.

This is bad news for the airlines; they will bleat and call foul, but nothing will be achieved because if you want to fly into Sydney, Melbourne or Brisbane, there is only one airport and so forth. Sort of a “if you don’t like it then don’t fly here” philosophy, which the new owners will really be forced to introduce if they are to make a viable return on their substantial investment. The Government, which would most likely be stuck with the majority of its loss-making airports, would then increase its charges significantly to mirror what the major airport operators have got away with.

So whether your aircraft is a 767 or a Piper Warrior, you will be slugged. If you own the Boeing, then you can always pass it on to your passenger; he or she probably won’t even notice the extra two or three dollars on the ticket, though of course if you are operating in the already fiscally debilitated GA arena, then this could well be the last straw. Also, what happens to the GA charges, a fairly simple means of regaining some revenue from GA operators basing themselves out of existing FAC airports? If this goes, then the replacement will certainly be something that will cost us all more in the long run — it always is, isn’t it!

Whatever happens, we are all losers as the entire airport sale saga degenerates into a fiasco of monumental proportions.

Firstly, Australia loses the relative efficiency of a single entity overseeing our major airports with uniform charging, rules of operation and procedures. Whatever you may personally think of the FAC, the fact remains that it has been successful as a concept, certainly profitable and fairly well managed. The only major complaint is that over the years it has (like the CAA) been shamelessly used by its sole shareholder as nothing more than a cash cow.

Secondly, having chosen the illogical path of breaking up the airports rather than selling the lot as a going concern, the Government then forbids outright purchase and allows instead (to appease the Left Wing) 50-year leases.

This latter point will cut hundreds of millions of dollars off the ultimate real-world valuation of these irreplaceable and crucial assets, just so an appeasement deal could be done to buy off a faction within the ALP.

Will, for instance, a lessee be that motivated to invest hundreds of millions of dollars in refurbishment, essential expansion and ongoing improvements at the major airports when they only have a decade or so left on their contract? A hypothetical sure, but we all know the answer, don’t we!

And how much is KSA worth now that, thanks to the Federal Government (refer Recce last issue), it seems to have become nothing more than an urban battleground? If Sydney residents already complaining about increased aircraft noise think that things are bad, then they have much to look forward to as later this year KSA will be able to increase its daily movement rate significantly once the new tower and radars are fully operational. If the noise protesters politely fade away, then I’m a monkey’s uncle! What is KSA worth under these divisive and emotional circumstances? Certainly a lot less than if sold as a highly profitable package of 22 airports.

Or what about Perth, an airport that returned a very healthy $13.5m profit on its 93/94 turnover of just $37m? Perth International is currently the subject of a Mabo-style claim (refer Airline Affairs). What investor in his or her right mind would want to get involved with this airport when this sort of thing is going to happen?

The whole airports sale scheme is a national fiasco, and yet it seems that the only people who don’t see this is the Government, their ivory-tower theorist bureaucrat advisors, and in particular Minister Brereton. The airport sell-off will probably be too well advanced to change irrespective of which party wins the next federal election, and in the long term a very real loser will again be General Aviation.

It is hoped that all aviators, private and professional alike, will back their relevant industry organizations to lobby for at least a hearing before GA is all but a dim memory for the Australians of the twenty-first century.