Fifo fissures

Australia’s resources sector is dominated by Western Australia and Queensland, with the Queensland workforce being 55 per cent the size of that in Western Australia. The Pilbara is the most significant resources area in Western Australia.

Reports prepared by the Chamber of Minerals and Energy (CME) state the region employs around half of Western Australia’s resource sector workforce (55,000 from a total of 116,000) and generates 80 per cent of its economic value.

Forecasts indicate a workforce peak of 65,500 people will be reached in 2014. After 2014 there is a lessening of mine construction as operational production takes over, after which a slow decline in numbers is expected before stabilising at around 55,000 in 2018. Of this figure only around 10,000 people are likely to be involved in construction activities.

A change in the proportion of operational personnel compared to those involved in production has a significant impact on the demand for FIFO services. The construction workforce commonly operates a three weeks on/one week off cycle. In comparison the operational workforce cycle is typically eight days on/six days off.

Therefore, while the total number of people employed in the resources sector may be forecast to decline after 2014, the increased travel frequency of the operational workforce means that the FIFO demand is still likely to increase before stabilising in 2018. Operational workers are also more likely to reside away from the resources area. This trend is predicted to see 83 per cent of the operational workforce employed in the Pilbara undertaking FIFO by 2020.

A brief review of some corporate information highlights the increase in activity the FIFO sector has brought to airlines. Alliance Airlines’ 2012 annual report described an increase of 52 per cent in revenue from FIFO charter work, including the lease of a further four aircraft.

Similarly, Skywest’s charter revenue grew by 30 per cent during the 2012 financial year with a 25 per cent increase in flight hours for these services. Skywest’s aircraft fleet also grew by 37 per cent.

Greg Marshall, managing director of the Flight Safety Foundation’s Basic Aviation Risk Standard (BARS) program reports that in the two years since commencement, 40 aircraft operators in Australia have been audited against the BAR standard, with the number continuing to grow. Although regular FIFO charter work provides the opportunity to grow revenues, anecdotally it seems few small airlines are able to enter the market. Service reliability and having to meet standards defined by BARS or those set by individual resources companies involve aircraft operators having to adopt operational practices that exceed national regulatory requirements. Attainment of these higher standards is increasingly a prerequisite before an aircraft operator is considered suitable for contract work with a resources company.

Generally FIFO charter contracts extend for three to four years with extension options. The resources companies set exacting targets for on-time performance, sometimes exceeding 95 per cent. A failure to reach on-time performance targets can see the contract terminated.

FIFO charter operations generally involve lower airframe flying hours compared to aircraft providing scheduled services. This favours the use of older aircraft with the associated lower upfront purchase or lease cost but with a higher operating cost.

One of the consequences of the use of these older aircraft is that they often had not been fitted with avionics needed to meet the latest mandated navigation equipment for ADS-B surveillance and GNSS-based instrument approach procedures. However, since July last year most Fokker 100 aircraft have been fitted with the necessary GNSS modifications.

Two airports located in the Pilbara illustrate the issues arising from the growth in traffic from the resources sector. Newman Airport serves a small town of 9,500 people, located inland from the coast on the edge of the ‘iron triangle’. Leon Burger, manager airport services for the Shire of East Pilbara explains: “Newman is the only public airport serving the inland Pilbara. This inland location means that we are not impacted by adverse weather such as the cyclonic weather patterns along the coast or low cloud and rain around the hill region of the Pilbara. Within a radius of 150km of Newman there are 10 other airports capable of jet operations. ” The airport has instrument procedures developed for both ground-based aids and GNSS. It is common for nearby resources airports to have only GNSS instrument approach procedures. However, some older generation aircraft being used for FIFO charter services in the Pilbara are not equipped with these avionics.

“In bad weather aircraft seek to land at Newman then bus to the mine. We also serve as an alternate for Perth Airport,” Burger adds.

Passenger growth at Newman since 2004 has been dramatic, averaging 28 per cent annually. The FIFO movement of resources personnel largely takes place on commercial airline flights. The State Growth Outlook prepared by the CME in 2012 using statistics from the Bureau of Infrastructure Transport and Regional Infrastructure (BITRE) shows passenger numbers of 251,500 in 2011. However, the number of passengers incurring an airport usage charge in 2012 was 400,000. It highlights that planning information used by government and industry is grossly underestimating the actual impact of FIFO.

Burger says: “In 2013 we expect to reach 500,000 passengers, an increase of 37 per cent on 2012. Of this number we estimate that around 95 per cent are associated with the resources sector either as employees or contractors. We now have five airlines providing services, almost all to and from Perth. As passenger numbers have increased so too have the number of services and size of aircraft. Now around 80 per cent of our movements are undertaken by code 4C aircraft such as the 737-800 and E190.

“Newman has 59 scheduled services per week but 40 per cent take place within a two-and-a-half hour period on Tuesdays, Wednesdays and Thursdays. During these periods the terminal is required to cater for 800 to 1,000 people. The terminal building built three years ago has been inadequate for the past two years. If these movements were spread over a greater period the terminal could cater for up to 1. 3 million passengers annually but the resources sector is unwilling to be more flexible with their flight schedule requirements. To overcome this acute congestion Newman has implemented a ‘slot’ booking system to control access to the RPT apron. ” At present Newman cannot build airport infrastructure fast enough to meet passenger demand. Planning is underway to increase the number of parking bays for scheduled aircraft from three to six as well as expand the general aviation area, including four new helipads. Fortunately the decision by the Civil Aviation Safety Authority to extend the narrow runway exemption means a new runway, probably to Code 4E, will not be required until 2020.

In terms of other infrastructure developments, Burger explains: “A new terminal, probably five times larger than the existing facility, is needed in the next two years. The number of busses transporting workers to mine areas from the airport has increased by 400 per cent in the past year.

“We estimate a project costing upward of $42 million is required to increase RPT apron bays, terminal functionality and floor space, airport access roads, and increase the car and bus parking areas. Projects to upgrade power, water and environmental management also need to be undertaken,” he added.

The investment in infrastructure at Newman to meet the aviation demands of the resources sector is daunting to a shire with around 15,000 permanent residents.

The terminal was built three years ago and has been inadequate for the past two years. BURGER – NEWMAN AIRPORT

Repayment of the investment in airport infrastructure over a long period becomes problematic if airport revenue diminishes as a result of a resources downturn. A downturn during 2001 resulted in the population of Newman collapsing to 3,000 people. Even though the investment in infrastructure is needed to meet the increase in flight schedules, passenger numbers and time preferences of the resources sector, these organisations have expressed an unwillingness to provide any capital funds for airport development projects at Newman.

Adding to the management difficulty is the retention of skilled airport operational staff in a town where house rentals are up to $3,000 per week and numerous job opportunities are nearby at higher wages with the resources sector. Anecdotally it seems that a turnover of around five per cent a week of all airport staff occurs, including airline personnel. To help mitigate high staff turnover the Shire of East Pilbara is building housing accommodation near the airport for staff as part of their remuneration package.

Karratha, meanwhile, is the second busiest airport in Western Australia, handling 864,000 passengers in 2012. Although the compound growth rate of passengers since 2004 had averaged 18 per cent, the downturn in the iron ore resources sector resulted in a lower growth rate of around 5. 5 per cent in 2012. Passenger data sourced by the CME from BITRE to form part of its 2013 State Growth Outlook is understated by not taking into account helicopter movements and their passengers. FIFO services by fixed-wing aircraft take place on three scheduled airlines. Passenger growth has been accommodated with a shift to larger capacity aircraft, particularly 737-800s.

The location of Karratha near the coast has seen the airport become a major staging point for helicopters supporting the offshore oil and gas industry as well some inland sites. Around 70 per cent of Australia’s oil and gas reserves are located in the Pilbara. Four helicopter operators are based at Karratha, with these operations comprising approximately 40 per cent of the airport’s aircraft movements. The complexity presented by the high proportion of helicopter movements amongst fixed-wing operations, was a significant factor in Airservices deciding to implement an air traffic control service at Karratha in 2010.

Of the current airport infrastructure the terminal building, built in the 1970’s, is the most problematic. To ensure that the airport infrastructure could meet future demands the Shire of Roebourne, which owns and operates Karratha Airport, has undertaken a comprehensive planning process.

Mitchell Cameron, executive manager strategic business explains: “The Shire took a conscious decision to focus on the strategic planning for the future development of Karratha Airport. Although we completed our last master plan in 2009, things have moved on considerably. We are currently completing a new master plan and land use plan for the airport.

“Since 2009 the Shire has initiated a program of investment in strategic infrastructure – our long-term plan will see investment of $100 million in airport infrastructure. The next significant project is intended to be a $20-30 million redevelopment of the terminal building planned to commence in 2014. ” Karratha, with a permanent population of 22,900 plus 10-12,000 itinerant workers, seems to have a financial base to enable the local government to attract skilled management from outside the area. Forecasting and financial evaluation is underway to determine whether the Shire’s airport revenue and reserves will provide the financial foundation to fund future airport development programs.

Meanwhile, from an airspace management perspective, a temporary radar has been commissioned at Paraburdoo to significantly reduce the reliance on procedural control around the Pilbara. An intention to bring forward the fitment of ADS-B avionics in Western Australia for flights above 10,000ft ahead of the national implementation date on January 1 2017 has been shelved. However, Airservices is still encouraging voluntary fitment ahead of this date.

Most of Western Australia’s resources workforce (80 per cent) is drawn from the Perth/Peel area. Of the remainder, 11 per cent come from interstate and the rest reside close to the resources area or travel from regional areas.

Company requirements, roster patterns and staff preferences result in FIFO travel taking place at Perth Airport in highly concentrated periods, in particular between 5. 30- 8. 30am then 3-4pm on Tuesday through Thursday. This has seen Perth Airport experiencing severe air traffic congestion and airport infrastructure being unable to meet passenger demands during these periods.

Queensland has suffered from the resources sector slowdown, particularly in coal. The Queensland Resources Council (QRC) estimates the 2012 total resources workforce employed directly or as contractors was around 65,000 people. A year ago it was predicted that a further 40,000 people would be employed in the sector during the upcoming decade. Now no growth estimates are being made, with the industry over the next year likely to continue a slight period of contraction.

From an aviation perspective, Queensland presents a different pattern of FIFO activity compared to Western Australia. The home locations of the resources workforce are fragmented, more live close to their work and others probably travel a shorter distance to site. Most resources activity in Queensland occurs in three areas, Bowen Basin, Surat Basin and North West Mining Province (NWMP).

A sample study by the QRC in 2012 indicated the workforce in both the Bowen and Surat areas comprised equally resident and non-resident workers. Only the NMWP has a greater proportion (64 per cent) of non-resident workers. The survey also indicated that the workforce comes from a diverse number of towns and cities along the Queensland coast.

Areas north from Gladstone account for 66 per cent of t he non-resident workforce for the three areas. Brisbane is the home location for only 13 per cent of t hese resource workers while the Gold Coast and Sunshine Coast combined account for only nine per cent.

Emerald is an inland town in the Central Highlands area with a residential population estimated at 15,000, which can reach 18,500 with seasonal agricultural workers. In total the Central Highlands has a population of 33,000 and forms part of the Bowen Basin.

Emerald’s airport is a council-owned facility. QantasLink and Virgin provide scheduled services to Brisbane with other charter operators flying resources workers from the Gold Coast and Sunshine Coast.

Ashlee Rosario, executive manager commercial services, Central Highlands Regional Council explains: “Five years ago the airport had 50,000 passengers. During 2012, including charters, the number of passengers is estimated at 350,000. We expect to exceed 420,000 in 2014, with some estimates suggesting that the airport could serve 600,000 passengers annually in 2015. The proportion of resources workers is estimated at 60 per cent. ” Although consultants have assisted the council to model future passenger movements, projections completed as recently as 2010 have drastically underestimated the number and growth of passenger numbers as well as the types of aircraft seeking to operate at the airport.

FIFO demand at Emerald Airport is closely linked to the coal developments in the Bowen Basin. Workers arrive either on scheduled or charter services then travel by bus or rental car to their place of work. At the start of 2012 Emerald had five daily flights to and from Brisbane. By the end of the year the number of weekday flights had increased to 11.

Common with other FIFO airports, most RPT and charter services take place on weekdays between 7-9am and 3-6pm.

Ashlee Rosario says: “To meet this demand, Emerald received one-for-one funding from the federal government to increase the apron size from a capacity of two to six parking bays. The terminal building, expanded in 2010, is already very small which means we have to use outside areas to accommodate passengers. Implementation of new security measures presented further space constraints. A further expansion of the terminal is a priority. ” The runway is Code 3C-capable, but has weight limitations on the pavement. As a result QantasLink and Virgin are limited to turboprop aircraft although Fokker 100 jet services can be undertaken through the narrow runway exemption.

The growth in charter operations slowed in 2012 due to the contraction in the thermal coal industry but still reached eight per cent. Other infrastructure needs include increasing rental and public car parking space since the number of vehicles parked jumped from 120 to 400 during 2012.

Resources growth in the Bowen Basin has been accompanied with the development of landing strips located closer to mine sites that mainly accommodate aircraft up to 30 seats.

Most significant is the airport development at Moranbah, a mining community purpose-built by BHP in the 1970s, located around two hours’ drive north of Emerald. The owner, BHP Billiton Mitsubishi Alliance, has spent $47 million upgrading the runway and terminal. Reports indicate that Moranbah now caters for around 65 QantasLink flights per week.

Investment in the development of Emerald Airport is being undertaken conservatively by the Central Highlands Regional Council.

Ashlee Rosario explains: “Investment in airport infrastructure competes

Planning information used by government and industry is grossly underestimating the actual impact of FIFO.

with the other infrastructure needs in our region. There is concern that the passenger growth we are experiencing is not sustainable in the long term. We need to base our infrastructure investment decisions on a more accurate estimate of the passenger volumes that Emerald will generate in the future. ” In contrast Mackay Airport, being commercially owned, has been able to direct the necessary expertise to undertake sound planning and obtain funds for infrastructure investment.

The QRC sample survey indicates the Central Queensland Coastal North, which includes Mackay, is the home area for 28 per cent of Queensland’s non-resident resources workforce. Mackay Airport is a gateway to the Bowen and Galilee basin areas.

Rob Porter, GM Mackay Airport explains: “FIFO travel typically involves workers using scheduled airline services then travelling by road to their mine site, generally within two hours drive from the airport. Passenger numbers have grown from 180,000 in 2002 to an expected 1. 2 million in 2013. ” A rough estimate suggests that resources workers account for 30- 35 per cent. Five airlines provide services and are gradually increasing the size of their aircraft. The airport is redeveloping the terminal to improve security screening and retail along with undertaking flood mitigation, with $18 million having been spent over the past two years.

Traffic growth at regional airports is leading CASA and Airservices to closely monitor movements at a number of locations with a view to introducing aviation rescue and firefighting or air traffic control services.

Jason Harfield, executive general manager ATC explains: “Air traffic services will be introduced to Port Hedland from mid-2013 but another three or four locations may need upgraded services shortly. Gladstone and Mt Isa may require air traffic control. Paraburdoo, Newman, Emerald and Olympic Dam may need aviation rescue and firefighting services. ” In view of the high cost of implementing air traffic control, the difficulty in attracting staff to work in remote communities and the prospect that movements could reduce in the event of industry downturn, remote tower technology is being considered. This technology is being trialled at Alice Springs.

To address capacity issues at Perth and Brisbane, Airservices has implemented initiatives to improve the movement rate with Metron Flow Control. Harfield explains: “We have identified the movement rate can be increased by reducing aircraft occupancy on the runway. Initiatives like defined speed on final and the use of rapid exit taxiways are able to increase capacity between 10-20 per cent depending on the mode of operation. This means the capacity of Perth Airport could increase from around 40 to 48 movements per hour. ” Metron involves the use of slot departure times and target arrival times to delay aircraft on the ground rather than through airborne holding or route extensions. Airservices reports Metron has been successful in reducing airborne delays, but this new pre-tactical separation method is a paradigm shift for others being impacted.

Regional airports, with limited apron space, have to cater for aircraft remaining on the ground longer to achieve their target arrival time. There is concern among regional airports about the need to fund increased apron space in addition to already tight or committed capital spend programmes.

FIFO airlines are also under considerable contract pressure to meet on-time performance metrics. The pressure to meet these metrics has seen aircraft depart outside their assigned slot and target arrival times.

Despite these issues, Airservices reports that the compliance rate is increasing, to now being over 80%. Metron was implemented in Brisbane on December 19 and the impact is still being understood by airlines and regional airports in Queensland.

Capacity of Perth Airport could increase from around 40 to 48 movements per hour.