Qantas and Alliance are competitors in the fly-in, fly-out market, but have different strategies in the leisure market. Photo: Gabriel Oliveira

Regional aviation on the rise

Monday, 22 July, 2019 - 15:55
AttachmentSize
22072019_Aviation_special_report.pdf643.54 KB

Every major airport in Western Australia achieved growth in passenger numbers last year, with Broome and Kalgoorlie hitting annual records.

The growth has been underpinned by a pickup in resources sector activity along with increased domestic tourism.

It marks a recovery from the nadir of 2017, when most regional airports recorded their lowest passenger numbers in a decade.

(click here to read a PDF version of the full special report)

The changing shape of the sector has been illustrated by new data supplied to Business News by Perth Airport.

The number of intrastate passengers using Perth Airport increased by 5.5 per cent to 4.26 million in the year to June 2019.

That was preceded by one year of small growth (0.9 per cent in 2017) and several years of big declines.

A Perth Airport spokesperson said the surge in regional passenger numbers confirmed the renewed confidence and activity in the state’s resources sector.

The rise is good news for airlines servicing regional WA, including Qantas, Virgin Australia, Cobham Aviation Services, and Alliance Aviation Services.

In contrast to the growth in intrastate travel, interstate passenger numbers through Perth Airport have barely changed over the past six years, dipping fractionally to 5.9 million during the past 12 months.

International passenger numbers have been a little more positive, increasing slightly to 4.4 million during the past year.

Kalgoorlie, Broome, Newman and Port Hedland have led the increase in intrastate travel, according to data for 2018 from the Bureau of Infrastructure, Transport and Regional Economics.

A record 415,892 passengers passed through Broome International Airport last year.

That’s an increase of 12 per cent over the past two years and meant Broome surpassed the previous record set in 2013.

The big driver has been tourist traffic, bolstered to some degree by the resources sector.

The latter comes in two ways: Broome is a hub for mining and oil and gas projects in the Kimberley and is also one of five regional towns – along with Busselton, Carnarvon, Derby, and Albany – from which Rio Tinto flies workers to its mining operations in the Pilbara.

While most air traffic to Broome originates in Perth, it also has links to Darwin (via Airnorth and other airlines) and will soon have scheduled services to the Pilbara via Aviar (see page 17).

Broome is hoping international aviation will provide a further boost, with Singapore Airlines’ regional arm SilkAir holding trail flights from its home base during the past two years.

Kalgoorlie-Boulder Airport has enjoyed three years of strong growth, with passenger numbers surging from 229,000 in 2015 to a record 289,000 last year.

That broadly matches a pick-up in the region’s mining sector, led by gold, nickel and lithium projects.

Airports in the Pilbara all shared in the increased activity last year although their performance was varied, and the longer-term trend has been very different.

Passenger numbers through Newman were up 7.4 per cent, Port Hedland and Paraburdoo were up by a similar amount, while Karratha was up by just 0.5 per cent.

In each case, the growth in 2018 came after five years of precipitous falls.

The most dramatic example is Karratha, where passenger numbers peaked at about 818,000 in 2012 at the height of the resources construction boom before plunging year after year to just 439,000 in 2017.

They recovered slightly to 441,449 last year.

While Newman, Port Hedland and Paraburdoo achieved strong growth last year, they are both well short of their all-time peaks.

Other regional airports that enjoyed strong growth last year included Albany, Learmonth and Kununurra.

Looking at the state as a whole, Perth Airport is positive about the outlook.

It noted that Qantas, Virgin Australia, Qatar Airways, AirAsia, China Southern, Singapore Airlines and Cathay Pacific have all announced capacity increases into the Perth market during the past 18 months. 

A spokesperson said the airport had been working with tourism bodies, the business sector and government to increase services and establish new routes.

“The launch of direct Tokyo flights by All Nippon Airways in September is another vote of confidence in our city and state as a destination,” the spokesperson said.

On a much smaller scale, another notable new service is a Fokker 70 charter between Perth and Uluru, offered by Alliance Aviation Services in partnership with Japanese travel wholesaler JTB.

Regional general manager Russell Bryant said Alliance had been working on creative ways to build its business out of Perth and broaden its operations from charter services to include tourism and leisure opportunities.

“JTB have already committed to a number of Uluru daytrip charters departing Perth over the coming months and we are in discussions with them over further growth in tourism charters from Perth,” Mr Bryant said.

Alliance already has a similar partnership on the east coast with US travel group Tauck. It expects a minimum of 70 charter flights per year after signing a contract extension with Tauck late last year.

Brisbane-based Alliance has been operating in WA since 2006 when it won its first FIFO contract with BHP Nickel West, and now flies to a dozen ports.

Perth Airport chief executive Kevin Brown said the Alliance-JTB partnership was targeting Asia, which was a huge potential market. 

“This Uluru day charter service really breaks new ground for us in capturing that market,” he said.

“It shows what a bit of thinking outside the box can achieve.”

Alliance’s charter service to Uluru has been launched just a few months after Qantas scaled back its scheduled services between Perth and the Northern Territory.

This was despite Qantas recognising increased demand for flights to Uluru.

“Uluru is in more demand from international and interstate tourists than we have seen in a long time,” Qantas domestic CEO Andrew David said.

Qantas responded by adding direct flights to Uluru from Adelaide and Darwin, on top of direct flights from Brisbane and Sydney.

Mr David said while there had been strong demand for flights to the Northern Territory from some areas, demand was weaker from Perth and Cairns.

Hence, Qantas cut the frequency of services from Perth to Darwin and Alice Springs. It has never offered a direct service to Uluru.

People: 

Special Report

Aviation

22 July 2019

Air travel in Western Australia has started to recover from an extended slump. This Special Report has data on all WA’s major airports, and details on an innovative inter-regional service coming to the state’s north.