A research report into the economic impact of airports released by Deloittes has identified high maintenance costs as a threat to future investment at regional and remote airports in Australia, despite regional airports contributing $329 million to the national economy annually.
The report findings were announced to the inaugural Australian Airports Association (AAA) Regional Airports Forum yesterday.
AAA Executive Director Caroline Wilkie said that a number of regional airports needed to upgrade facilities and improve infrastructure to cope with the forecast average annual increase passenger movements, which is expected to 3.3% each year out to 2025.
The report showed only 45 % of regional airports make a profit, which restricts the ability to upgrade facilities and infrastructure. Ms Wilkie said the statistic was concerning as regional airports provide an essential service to their local communities.
“For many Australians living in remote locations, regional airports are the lifeblood of the community and the only practical means to access emergency and essential services. People rely on their airports and airlines to connect with their family and friends.”
The trend towards larger and heavier aircraft on regional routes has increased requirements for both terminal facilities and runway maintenance, adding to the costs for smaller aerodrome operators and owners.
“Airports in WA, QLD and Northern NSW have been particularly affected by the need to invest and grow their facilities on the back of the growth in the mining and resources sector as they are expected to facilitate the subsequent rapid increase in Fly?In Fly?Out operations,” Ms Wilkie said.
“The cost of maintaining regional airports is very high. There are substantial costs associated with maintaining runways taxiways, aprons, navigational aids, refueling and ground handling services.
“Many regional airports also face increasing costs due to the need to upgrade security at their airports as well as skills shortages, particularly in key regions where resource projects are attracting large numbers of workers,” she said.
The research showed:
- More than 70 per cent of regional and remote airports are serviced by only one airline. As airline competition has reduced on smaller routes, prices for services have increased.
- As a percentage of their total operational costs, regional aerodromes pay three times more on regulation related costs than major airports.
- Regional airports also have limited opportunities to generate non?aeronautical revenue to assist to cover costs, particularly at smaller regional and remote facilities.
- Regional airports able to benefit from mining are likely to continue to perform strongly while those airports exposed to tourism and manufacturing anticipate a weaker performance.
Ms Wilkie said regional airports, especially those not directly benefitting from the mining boom, need to find ways to further diversify their revenue base, however for smaller regional and remote aerodromes, the only option moving forward will be Government assistance if major maintenance and upgrades are to occur.
The AAA is preparing a major paper on regional airports which will be launched later this year.