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With Brisbane Airport experiencing well-publicised problems with congestion and delayed flights, mine companies are looking at moving their FIFO bases elsewhere. Competition between regional airports for the lucrative FIFO dollar is heating up, writes Tracey Mackay.


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The rapid upsurge of mining activity in Queensland has, over recent years, proven a boon to the State’s aviation industry which offers the resources sector fast, reliable and flexible transportation. With most of this state’s mining operations located in remote and rural areas, far away from the capital Brisbane, aviation has become a vital artery to the mining organism ensuring a swift flow of workers travelling to and from a mine site.

Roads in Queensland’s regional interior and northern zones are notoriously rough and ill maintained, making driving unpleasant if not dangerous. Train services are limited and not of sufficient frequency to make rail a viable transport option. Aviation however, can turn a hot and dusty 14 hour drive on a pot-hole peppered road, into a 90 minute air-conditioned cruise through the clear blue yonder.

With more and more mine sites opting for the FIFO (fly-in, fly-out) employment model, aviation has become a serious mine services industry sector contributing millions of dollars to the state economy every year. Over recent years, mine companies such as BHP have injected considerable funds into regional and remote airport upgrades, while private charter companies have greatly expanded their fleets and services to cater to increasing demand.

Every week, tens of thousands of mine workers leave their city suburban or coast fringing homes, to board planes headed for mine sites in Queensland’s dry and dusty central and western districts. They work shifts anywhere from 5 to 14 days, then are flown home again where they enjoy an extra long weekend, anywhere from 4 to 7 days.

However the growth in mining, the rise of FIFO and the subsequent increase in aviation activity has put pressure on Queensland’s key capital and regional airports, and contributed to a flurry of activity aimed at keeping up with the pace of industry.

The airport most affected has been the Brisbane Domestic Airport which funnels the lion’s share of FIFO workers through its check-ins every week. The airport has suffered of late from a litany of delayed and cancelled FIFO flights caused by the sheer boom in numbers of both flights and people demanding access to the airport’s facilities.

The FIFO sector has become such a large and important market for the airport that strategies to cope with the customer base have been incorporated into the airport’s recently released Master Plan.

The plan includes provision for the development of a passenger lounge for resource sector workers by 2033.

Brisbane Airport Corporation (BAC) CEO and managing director Julieanne Alroe said the new plan was vital to the future operations of the airport and would help cope with projected future demand.

“Forecasts show that passenger numbers are expected to rise from 21,500,000 in 2012 to around 48,700,000 in 2033/34 taking into account the substantial growth in the resource sector, which wasn’t considered in the last Master Plan,” Ms Alroe said.

“This level of growth demands that we plan ahead to ensure appropriate and sustainable infrastructure and services, such as roads, terminals and technology, are in place,” she said.

“We consider the Master Plan to be the most important planning document for the airport.”

Along with the FIFO passenger lounge, the plan also incorporates separate gates for regional aircraft outside of the main terminal. Under the new plan, FIFO workers will be processed in the main terminal then bussed out to the regional lounge for boarding.

A little further north, Mackay Airport’s close proximity to the coal-rich Bowen and Galilee basins of Central Queensland has made it one of the busiest airports in Queensland with more than one million passengers passing through per year, the vast majority of which travel to and from Brisbane.

More than 40% of the traffic at Mackay Airport is related to the mining industry to the west of the city and an increasing number are commuting from the Gold Coast or Brisbane, catching FIFO flights at Mackay. This has propelled Mackay to vigorously petition Gold Coast for direct services between the two cities, and if this becomes a reality it could greatly help reduce FIFO related congestion at Brisbane Airport.

Meanwhile the Gold Coast has been doing some manoeuvring of its own, recently commissioning KPMG to conduct a study into the Gold Coast’s long distance commuter workforce.

The KPMG study revealed employment in the mining industry in Queensland hit a record high of 76,000 in May 2013, with Queensland the only state in Australia to record consistent and steady growth in mining industry employment since August 2012. It must be noted that this study was conducted before the recent spate of lay-offs in the industry in May, June and July of 2013.

Gold Coast Airport Chief Operating Officer, Paul Donovan, said Gold Coast Airport has been working closely with City of Gold Coast and Regional Development Australia Gold Coast to raise awareness of the city as a viable FIFO workers source market.

Mr Donovan said the 2011 Census revealed the Gold Coast is home to 6,700 Long Distance Commuters (LDC), a significant increase of 92% when compared with the 2006 Census results. These figures indicate that the Gold Coast is a relatively new region for resource sector workforce supply.

“It also highlights that the Gold Coast punches above its weight when compared to other major Australian cities like Adelaide, which has approximately the same LDC result against a much larger population base.

“The study also revealed the Bowen Basin region as the dominant regional destination for LDC workers residing on the Gold Coast, increasing by 409% between 2006 and 2011, providing some encouraging intelligence for airlines to consider a direct service to Mackay/Bowen Basin.

THE FUTURE OF FIFO

Rio Tinto global sourcing travel and expense management lead, Kurt Knackstedt, speaking at the CAPA Australia Pacific Aviation Summit in August of 2013, raised the idea of FIFO flights in Australia integrating with commercial flight bookings within the next 12 months. He said there have been a lot of talks in the last 12 to 18 months about integrating itineraries and the technology is almost there to move forward with implementation of a single itinerary. Adagold general manager commercial, Jeff Eager, told the summit there is a big desire in the FIFO sector to be able to book end to end and he agrees “integration will come” eventually. But Mr Eager points out “the reality is a big portion of the FIFO world” still rely on Excel spread sheets to keep track of seat inventories and passengers.

Source: CAPA Centre for Aviation

The FIFO sector has become such a large and important market for the airport that strategies to cope with the customer base have been incorporated into the airport’s recently released Master Plan.

“KPMG’s report advocates the need for airline services right now to resource regions in Queensland given the rapid growth we’ve seen in the LDC workforce.”

Archerfield Airport on Brisbane’s southern outskirts is another contender for FIFO dominance, offering easy access for both Brisbane and Gold Coast based FIFO workers. Archerfield is close to major arterials and transportation infrastructure and has the capacity to deal with increased flight numbers.

The airport operates mainly as a base for emergency services, aviation training and some specialist private charters with no regular public passenger services operating from the site. However in the past few years the airport has catered to an increasing number of FIFO operators looking to avoid Brisbane Airport’s overcrowding.

General Manager of Archerfield, Corrie Metz, said “We have a lot of FIFO charter work to the mines from here, and I see that as being a large growth area.”

From FIFO and other services, “…we’re getting around 150,000 movements per year,” says Metz.

Also throwing their hat in the ring is Sunshine Coast Airport, located in another heavily populated area of South East Queensland. According to Sunshine Coast Airport manager Peter Pallot, the city is home to approximately 10,000 FIFO mine workers who would welcome a FIFO airport closer to home.

The biggest obstacle for the Sunshine Coast is the lack of current services to northern cities. These new services would first have to be established, and to that end Pallot has entered into negotiations with Mackay, Gladstone, Emerald and Cairns airports.

FIFO flights by Skytrans Airlines currently operate twice a week between the Sunshine Coast and Clermont in the Bowen Basin of Central Queensland.

Coming from left field, the wealthy Wagner family from Toowoomba also believe they have the answer for Brisbane’s FIFO-related congestion problems – a new FIFO dedicated airport at Toowoomba.

The family, who own a network of construction-related enterprises, have already started building the airport on the western fringes of the mountain-top Garden City, located just one and a half hours drive west of Brisbane. Named Wellcamp Airport, the project in expected to cost in excess of $100 million and will include a 2.87km runway capable of taking Boeing 747s.

Construction on the airport is expected to be finished in the later half of 2014, with a projected 500,000 passengers a year passing through its gates by 2019. With Brisbane Airport’s proposed new parallel runway not expected to be operational until at least 2022, the new Toowoomba venture may come at the right time.

“It is bold,” John Wagner said. “This will be a total game-changer for Toowoomba and our region.”

While FIFO workers and charter services to and from mining and gas regions of Queensland will be the bread and butter of the airport, the Wagners also plan to open up the port of regular scheduled passenger services and develop a large industrial park around the port complex.

Far from being threatened by the percolating FIFO competition from other airports, Brisbane Airport’s Julieanne Alroe said she actively encourages other south-east Queensland operators to ramp up FIFO services. In fact you can almost hear the relief.

Speaking to the Toowoomba Chronicle in September, Alroe said, “If Coolangatta or Sunshine Coast or anybody can get more FIFO operating out of their airports; if the Wagners can get it out of Toowoomba, we would be delighted to see it spread around,” Ms Alroe said.

“It is probably not going to change our bottom line at all. It would just make our day-to-day operations more efficient.”

THE TYRANNY OF DISTANCE: AFFORDABILITY

While FIFO flights are financed by mine companies, for non-miners the cost of flying to and from some of Queensland’s more remote mining communities is prohibitive. Flight costs can easily run into the thousands when it’s time to go on the family holiday, and for people not on high mine worker wages, that expense can prove too much.

“While it’s gotten better over recent years, I can’t tell you the number of family weddings, funerals and birthday celebrations we’ve missed over the years, simply because the cost of flights were as much as a second hand car,” one North West Queensland hospitality worker told QMEB.

The commercial aviation industry claims high maintenance costs associated with ageing airport infrastructure combined with the cost of doing business in rural areas and relatively low passenger numbers contributes to the high cost of fares.

However there could be some relief in sight with Queensland’s regional communities benefiting from Tigerair Australia’s planned expansion over the next year. The airline says it plans to increase its overall capacity by 20% in 2014 and will increase the number of services to regions.

The move is expected to generate competition between Tiger and the other major regional carrier Jetstar, which could result in lower prices for travellers. Virgin Australia owns a 60% share of Tigerair.

In June the State Government announced the deregulation of air services between Cairns and Weipa, an opportunity that Virgin Australia was quick to pounce on. From 2014 Virgin Australia will provide a daily service between Cairns and Weipa, “…bringing choice to consumers in the region and competitive air fares.”

Virgin Australia Chief Commercial Officer, Judith Crompton said, “In Queensland the mining boom is continuing to drive increased demand and open up routes that can sustain competitive air services.

“Weipa is an important mining centre in regional Queensland which has seen significant growth in demand for air travel in recent years. This has created the opportunity for deregulation to bring competition and lower fares to this market reducing costs for business and boosting tourism.

Two months before this announcement, Virgin began regular flights between Brisbane and coal mining town Moranbah, west of Mackay.

Merren McArthur, Virgin’s Group Executive of Alliances, Network and Yield said, “Moranbah is situated in the heart of the Bowen Basin and we are pleased to be supporting both the local community and the resources industry by bringing much needed competition to this market.

“Virgin Australia launched the highly fuel efficient and comfortable ATR-72 turboprop aircraft in October 2011 and since then, we have been expanding our operations throughout regional Queensland.”

Then in late September of this year the carrier announced it would begin twice-weekly direct flights between Cloncurry and Brisbane, starting in November.

“Cloncurry is an important regional centre that has seen strong growth in the agriculture and resources industries. Up until now, those wishing to travel to Brisbane have needed to transit through Mount Isa or Townsville…” Ms Compton said.

Virgin’s bid to dominate Australia’s regional airways, first became apparent when the carrier bought Western Australia’s Skywest airlines in April. Until the sale, Skywest was the dominant player in the Western Australian FIFO market.

At the time, Virgin Australia Chief Executive Officer John Borghetti said, “By integrating Skywest Airlines into the Virgin Australia Group, we unlock new opportunities to grow our services to regional Australia and significantly increase our charter presence in the high growth fly-in, fly-out markets.

“Western Australia is one of the fastest growing aviation markets and a very important part of our strategy. We have made significant investment over the past two years with the introduction of our internationally configured Airbus A330 aircraft on services between the East and West Coast, increased frequencies to the resource-rich Pilbara region and established a large crew base in Perth.

“By building a Perth-based operation and workforce, we will continue to invest in local resources, expertise and infrastructure”, Mr Borghetti said.

virgin-australia-aircraftLNG COULD REDUCE AIRLINE TICKET PRICES

Introducing LNG to Australia’s aviation industry will ensure airline market growth, potentially reduce passenger ticket prices, and result in an immediate 20% reduction in carbon emissions, according to English aeronautical engineer Dr Graham Dorrington.

Speaking at the Australian Gas Technology (AGT) conference in Perth in July of 2013, Dr Dorrington said the commercial use of LNG in the aviation industry may not be as far off as some suspect.

“Airline profitability is currently suffering from high kerosene prices and any further increase in kerosene prices could prevent airline market growth or even cause contraction. Substantial changes in airport infrastructure will be required to supply LNG at airports, although that is also a major opportunity,” said Dr Dorrington.

“Initially airfield-supply prices of aviation quality LNG are likely to be comparable with current kerosene prices, but the supply price will fall, not rise, with time. Consequently, introducing LNG will help to assure airline market growth and that is ultimately linked with the potential for reduced passenger ticket prices.”

Dr Dorrington said introducing LNG to the aviation industry would also result in an immediate 20% reduction in carbon emissions, as well as useful reductions in NOx.

“Blending LNG in biomethane produced from biogas will result in the net carbon emission rate falling by up to 97% per aircraft flight. However, currently the biogas production rates are far too low to be viable.”

Dr Dorrington said there are no unrealistic technical challenges preventing the commercial use of LNG in the air transport sector and commercial operations could feasibly begin before 2020.

“Beech Aircraft Corporation and Tupolev successfully flew LNG-fuelled research aircraft in the 1980s. The required aircraft system modification challenges are well within the capabilities of the major airframe companies such as EADS-Airbus and Boeing,” said Dr Dorrington.

Source: Australian Gas Technology www.australiangastechnology.com.au

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