Over the Horizon

It also involves the establishment of an airport office complex, which eventually would contain the largest single office development outside Adelaide’s CBD, accommodating about 3,500 people.

Another main project is the long-mooted but so far unfunded construction of an international hotel close to the passenger terminal. AAL also hopes to entice the South Australian government to extend a light rail (tram) service from the city’s present limited network, to improve the transport links between city and airport and take the pressure off existing roads.

Ahead of that proposal, a trial has begun to run Adelaide’s only double-decker bus service on the city-airport route, carrying 92 passengers and enhancing the present JetBus services and private mini-bus shuttles.

The 30-year vision also includes new retail space, airline lounges and significantly more multi-level car parking for both short-term and long-term stays.

The masterplan builds on existing approved projects which include three new domestic airline gates with aerobridges, more space for international passengers and new passenger facilities and aircraft access areas for regional airlines, and a dedicated parking area for international aircraft on Adelaide layovers. AAL’s chief executive Mark Young, who outlined some of the long-term proposals to Australian Aviation in June, said the 30- year vision extended the present expansion proposals – worth about $400 million – and flowed on from the regulatory 20-year horizon released earlier this year.

Investment in its initial five-year phase could be worth $1 billion and overall investment – if all elements came to fruition – would top $2 billion, he said.

The latest masterplan aimed to make Adelaide Airport a top-tier international airport and a major business centre for the Asia Pacific region, he said.

Already the airport’s aviation and commercial businesses were contributing an estimated $1. 9 billion annually to South Australia’s gross state product (GSP), amounting to 2. 1 per cent of the annual state total.

It is expected to double that contribution to about $4 billion within the next 20 years.

In the 15 years since the airport company – majority owned by a collection of superannuation funds – had acquired the lease on the airport in Adelaide’s West Beach area from the federal government in 1998, AAL has invested about $500 million on building new infrastructure and commercial interests, and another $350 million on projects within the 785 hectare site.

Passenger numbers had doubled to almost eight million, including a quadrupling of international traffic, and AAL was forecasting that the passenger figure could reach 18 million within 20 years, including 2. 8 million international passengers as the airport steadily increased its present 53 weekly international services – up from 33 only three years ago.

The latest growth proposals stem from a continued strong aviation and commercial performance within the airport precinct.

In its latest results for the 2013‑14 financial year AAL confirmed that passenger growth for 2013-14 had increased by six per cent to 7. 7 million, The figures included an outstanding 25. 5 per cent rise in international traffic, following rises of 13 per cent and 14. 8 per cent in the previous two years.

The latest rise was helped by the start of new overseas services by Jetstar and AirAsia X, and the first full-year of Emirates direct daily flights between Adelaide and Dubai.

Annual revenues rose from $158 million to $171 million, with aeronautical income up6. 3 per cent to $85 million. That was almost matched by combined commercial and property incomes of $84. 1 million.

AAL reported an increase in net profit from $10. 5 million to $13. 7 million for 2013-14.

Young said the latest results continued the achievements of the past 15 years and generated confidence that the 30-year vision could be accomplished.

With 140 commercial tenants established on the airport’s 100 hectares of available commercial land, existing businesses looking to grow at Adelaide Airport included freight and logistics, office and warehousing, mining and resources, technology, healthcare and government enterprises.

In addition the airport has attracted major retail developments, with Woolworths building its first Masters hardware store for South Australia on land adjacent to the airport’s IKEA store and recent expansion completed at the extensive Harbour Town retail precinct.

The proposal for an integrated airport business district incorporates a series of major office blocks of up to five storeys, covering an area behind the new multi-storey car park. The proposal envisages about 50,000m2 of office space, providing employment for up to 3,500 people.

The complex would be developed progressively by commercial interests, Young said. AAL was likely to be a co-investor, particularly in associated infrastructure, and a likely tenant, as its present single-storey headquarters would be engulfed as the new office complex expanded. He expected to see the first office block opened within the next five years. A 200-room international hotel connected to the passenger terminal and proposed office complex is high on the airport company’s wish list. It has development approval, which will require updating, as the search for an investor continues.

Young is confident “its time has come”.

With an active marketing campaign being readied for launch early next year, he hopes to have reached “a competitive process” by March, leading to the announcement of a successful tender by the middle of next year, and the completion of construction of the hotel within five years.

The proposed hotel is a critical element in the expansion plans, he said.

The five-year horizon should account for the first $1 billion of new investment, and incremental projects, including major expansion of the passenger terminal and the office park, would account for another $1 billion within 20 years.

Further development of the 30-year vision is not costed. It is forecast to include a short light rail “spur” off the state government’s projection of a new tram route to nearby Henley Beach. However, the cash-strapped government has declined to commit to the project, despite AAL offering to provide a light rail corridor into the airport and being “a willing participant” in the project.

Employment potential should be a major attraction for the government. AAL says the airport precinct generates 8,700 direct jobs and 9,000 indirect jobs now. It expects to add another 3,300 direct jobs within five years.

AAL’s directors say aviation has been the catalyst for growth but the company has become a broadly-based economic activity centre for South Australia, with the track record to reach the growth goals as a globally-connected aviation and commercial business.

“Our strategic vision is aspirational, yet achievable,” they say.