Airport property development consultant, Gateway Project Partners, has tackled the question of whether GA, though an essential service in many areas, properly pays its way to support airport maintenance and development.
In its latest Airport Property News, Gateway Project Partners shares this perspective:
General Aviation (GA) has always been considered important to Australia due to the isolated nature of the nation’s geography.
GA provides accessibility to remote areas of the country that are otherwise unable to be serviced due to limited ability for other transport modes to be viable in these locations.
The sector provides the means of allowing regional communities access to business, medical, educational and social opportunities in bigger regional centres or capital cities.
GA is an inherently old industry in Australian terms, and has always been heavily classified as a ‘special case’ industry.
In today’s market, many parts of the GA spectrum are struggling to cope with the pace and scale in the modern global commercial environments.
Previously a market of exclusive use, it is now faced with increased competition as improvements in road infrastructure and motor vehicles are providing alternative routes to remote locations.
The latest BITRE General Aviation Action Agenda Report reveals that previous post war protection of the industry due to its nation building importance has ultimately damaged the ability of users to adapt to change.
As such, the impact of recent requirements for the industry to be regulated and developed under broader government policies relating to industry, tourism, competition and taxation regimes has placed pressure on the market.
Despite GA now being exposed to increased regulation, there is still evidence that the land occupied on airport by the industry is heavily subsidised.
The only costs levied for GA and community service providers are the supporting services such as airport charges, regulatory and air service charges.
Analysis of the most recent Bureau of Infrastructure, Transport and Regional Economics’ General Aviation Activity Report (2010) has identified that GA activity in terms of hours flown (excluding scheduled Regional Airline Operations) increased by 2.2 per cent in 2010. Compared to the 7.25 per cent growth seen in RPT (Regional airlines equate to 11.8 per cent of this).
GA is interdependent specifically with the mining industry, and indirectly shares its fortunes.
As demand for mining companies to access remote locations has increased, it has formed a wealth of flow-on business to many GA operators.
With the mining boom only increasing into the future and the present decreased number of GA participants, there is potential for operators to capitalise on the flow on effect.
This growth will also result in airports being required to produce large capital investments into upgrading infrastructure for increased traffic.
As the GA operators will significantly benefit from this growth, is it still viable for airports to keep GA on-airport if they are not charged for the true value of their land?
Regional airport providers must now consider the true benefit of GA to the viability of their airports into the future.
With increased commercial charters and demand for airport upgrades, the economic benefit of GA is decreasing and to many communities is now considered nonessential.
The industry may need to accept that GA operations need to relocate from those airports experiencing strong RPT and charter growth to those airports that aren’t; or will this cause the industry to face extinction?
GA has always been a heavily protected industry and any increase in charges would not be factored into the cashflows of small operators.
The reality of the market climate is such that as the regional airport’s direct benefits from GA decrease, increased costs must be enforced to secure the place of the industry on-airport.