Where is the investment in our airports?

As someone who travels interstate regularly, one of my major frustrations (as I am sure it is with most passengers) is with airport delays.  Whether it is planes delayed in their take-off or coming home to Brisbane and having to circle over the Gold Coast for 30 minutes before we have clearance to land, it is one of the more unenjoyable aspects of travel.

When you have a look at the growth in flight and passenger numbers over recent years and consider the lack of investment in additional airports or airport expansions it is no surprise why delays are virtually inevitable.  Data published by the Australian Department of Infrastructure and Transport highlights airport passenger figures which shows why so many of our planes are leaving or arriving so late.  Politically, building new airports are a very sensitive issue as highlighted by the fact that Governments have been trying to agree on a site for a second Sydney airport for many years and we still appear no closer to a solution.

Preliminary data shows that the number of airport movements has increased by 4.2% throughout 2012 with 1,429,497 flights over the year and 140,928,756 passengers.  The major capital city airports have seen flight volumes increase by 4.1% over the year and passenger number growth of 4.8%, while the number of flights has increased by 4.6% in non-major capital city airports with passenger growth of 2.7%.

 

The nation’s three busiest airports are those which service the three largest cities (Sydney, Melbourne and Brisbane).  These three airports accounted for 48.7% of all flights over the year and 61.7% of all passengers, when you include the fourth largest airport (Perth) 55.5% of all flights and 70.7% of all passengers went through these four airports.  Sydney airport alone accounted for 20.9 % of all flights and 26.3% of all passengers.  Of course these four cities service the most populous regions of the country and they account for around 56% of residents, highlighting that the number of flights is in-line with the population however, there is a disproportionate amount of passenger movements through these four airports.  This is largely due to the fact that these four airports act as the major hubs for international flights and many intra-state connecting flights.

Over the past 20 years, the number of flights at a national level has increased at an average annual rate of 1.3% and the average annual rate of growth has been a much higher 2.7% over the same period across major capital city airports.  Over the period, flight numbers through Perth have increased at an average annual rate of 4.7% followed by 3.2%pa through Brisbane and 3.1% pa through Melbourne.

The reason why these airports are seeing so much traffic is due to the fact that most of the major businesses are located in these cities and these airports also generally act as gateways to the regional areas of the state, thus business travel is significant through these cities.

Despite the fact that air travel has surged over recent times, there has been very little investment in airport infrastructure.  Outside of the expansion of Avalon Airport in Victoria as a second Melbourne airport there has been minimal action on secondary airports or development of additional runways.

The cost associated with delayed flights to businesses and the negative impact these delays potentially have on Australia’s tourism sector I believe, are too important to ignore.  The statistics show that air travel is continuing to grow however, airport capacities are failing to grow in-line.

 

Let me know what you think, how important is it to provide additional major airports and to boost the capacity of our current airports and is enough being done to cater to our future needs?

About Cameron Kusher

Cameron Kusher is Head of Research at CoreLogic, specialising in primary and secondary data analysis, property market commentary and consultancy. Cameron has a thorough understanding of the fundamentals such as demographics, trends, economics and spacial analysis and is a regular keynote speaker for property-related groups, regulated industry bodies, corporations and the government sectors. Follow Cameron on Twitter @cmkusher

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