How is Melbourne and Victoria state coping with the changing face of Australian tourism? Peta Tomlinson reports. 

 

 

Australian tourism of late has experienced both the best of times, and the worst of times. For while the nation’s strong currency has been riding high as the envy of troubled economies globally, domestic tourism – once the industry’s backbone – has suffered as a result. It’s meant that Australians who once loved to holiday at home now prefer to skip overseas, where their dollar goes further.

 

On the flip side of this domestic tourist downturn, international tourists are arriving in droves. And increasingly, Melbourne in Victoria, long the ‘bridesmaid’ to New South Wales’ capital Sydney – at least as far as foreign visitor arrivals is concerned – is becoming their default gateway. 

 

All of Australia’s airports have fared well in terms of overseas arrivals over the past decade, but Melbourne is the standout. Tracking data by Tourism Futures International shows that from 2000 to 2010, a 5.3% annual growth rate of international arrivals in Melbourne far outpaced the national average of 1.8%, eclipsing second-placed Perth, which grew 2.5%, and Sydney and Brisbane, with 0.7% growth each.

 

Indeed, in its 2010/11 financial year ending June 30, international passenger arrivals at Melbourne International Airport – known locally as Tullamarine – grew by 18.5%, and since then the gateway has recorded monthly rises of 12%, 11.5% and 9.3% respectively.

 

Some might say it’s about time. Home of premier horse race the Melbourne Cup, the Australian F1 Grand Prix, the Australian Tennis Open and the hallowed Melbourne Cricket Ground, Australia’s second-largest city is the events capital of the nation, and its cultural vanguard.

 

Melbourne consistently places among the top three in the ‘world’s most liveable cities’ rankings, and boasts both remarkable urban architecture and spectacular coastal and mountain scenery, in equal measure.

 

But people don’t come unless the packages are attractive, and to that end, a concerted effort by industry players bundled together as ‘Team Victoria’ is credited with Melbourne’s ascension.

 

Surmises Chris Woodruff, Melbourne Airport CEO: “In a nutshell, we’ve worked really hard, and we are now seeing the results.”

 

The strategy has involved a holistic approach looking at what a passenger wants from a total travel experience. Woodruff continues: “So we are not just selling Melbourne Airport, but Melbourne as a city, and Victoria as a state. To do this, we work

closely with the government as well as peak tourist bodies to offer a total package to our airline customers, and ultimately, to their passengers.

 

“We have a great city and a fabulous state with a sensational major events calendar, and working together as Team Victoria has proven to be a successful formula.”

 

Being the perennial number two airport in Australia is also fuelling Melbourne Airport’s drive to shoehorn Sydney out of the top spot, Woodruff concedes.

 

“We have worked hard to ensure that we offer our airlines great service and lower fees,” he says. “In terms of lower fees, we have decreased our overall security costs and passed these through to airlines. We also have a number of operational advantages that make us very attractive in terms of flexibility and scheduling.”

 

Woodruff believes Melbourne is well placed to be the national aviation gateway “as we are the only major Australian airport with a single terminal precinct and with curfew-free operations.”

 

That curfew is Melbourne’s trump card. Sydney has one – prohibiting passenger planes from taking off or landing between 11pm and 6am. Melbourne does not. Woodruff says Melbourne’s curfew-free operation enables the airport to offer airlines flexibility of scheduling – particularly sought by long-haul carriers – and increased flight options from the key growth markets in Asia.

 

Asian markets are lucrative, and growing – led by China, which seems on track to overtake the UK as the biggest source of overseas visitors to Australia.

 

In the first quarter of its 2011/12 financial year ending September 30, the number of international passengers using the gateway jumped 10% to 1.6 million, with growth led by a 26% rise in both Chinese and Philippine visitors.

 

In September alone, the number of Chinese visitors soared 29% and other countries with strong growth in passport holders included Vietnam (17.5%), Taiwan (16.3%), Singapore (8%), Philippines (9.4%) and Sri Lanka (9%).

 

In comparison, the so-called traditional markets of New Zealand, Canada and the UK grew by 7.9%, 5.6% and 5.1% respectively during September.

 

This influx from the East is reflected in route expansion by nearly every large Chinese carrier. In June 2011, China Eastern increased its Melbourne to Shanghai service from four times a week to daily. In August 2011, China Southern announced plans to double its Melbourne services by introducing twice-daily flights between Guangzhou and Melbourne from October 2011.

 

Last December, Air China was the first carrier to introduce a direct route between Beijing and Melbourne. The new route was announced as part of the airline’s greater plan to operate daily flights between China and Melbourne. Capacity has also been boosted at Cathay Pacific, which operates thrice-daily services from Melbourne via its Hong Kong hub.

 

Jetstar has announced a new Melbourne–Singapore–Beijing service, operating daily, which will carry up to 4,000 passengers per week. Elsewhere in Asian markets, Vietnam Airlines has begun a daily service from Melbourne to Ho Chi Minh City.

 

Woodruff indicated that these expanded airline offerings could only be the beginning as Melbourne Airport aggressively targets the Asian market.

 

“We see China and Asia as a whole continuing to be growth markets for us for the next 10-15 years,” he says.

 

Hence, the China factor features in the current A$330 million expansion of Melbourne Airport’s international departures area. The strategy incorporates a vastly enhanced passenger experience specifically tailored to Chinese passengers.

 

“To become the busiest airport in Australia, we need to do something different and we believe that our passion for our customers is that,” admits Woodruff.

 

“Through our Chinese Visitor Program, we’ve introduced Mandarin signage and Mandarin public announcements, and trained frontline staff to provide the best service we can for our Chinese passengers.”

 

He added that all international visitors will benefit from these improvements.

 

“For the first time in 40 years, we have purposely built retail offerings that are tailored to our passengers and reflect the culture of Melbourne.

 

“Many are trading now; the remaining new stores will open at the end of this year. Also a part of the international terminal expansion is the largest overhaul of our baggage systems, which we have also just completed.”

 

And to appeal to airlines, he notes that “we are upgrading our aerobridges to create greater flexibility for airlines, and allow a wider range of aircraft to utilise the gates”.

 

To further accommodate the growth at Melbourne Airport, over A$1 billion in infrastructure will be invested over the next five years – works aimed at improving the surrounding road network and terminal facilities.

 

Todd Blake, CEO of the Victoria Tourism Industry Council (VTIC), believes these efforts will further Melbourne Airport’s efforts to be the preeminent Australian aviation gateway.

 

He particularly applauds the airlines’ route expansion, saying that direct international aviation access is of critical importance to the Victorian tourism sector.

 

“With future growth expected from markets that traditionally stay in Australia for a shorter period of time, direct aviation access is vital,” comments Blake.

 

“Melbourne has some strategic advantages over other destinations with two curfew-free airports (Tullamarine and Avalon) within close proximity of Melbourne, and a substantial land bank around both airports that will allow for increased capacity over time.”

 

With the way Australian tourism is shaping up, this represents a welcome revenue stream. Blake noted that VTIC’s Tourism Forecasting Committee, among others organisations, expects growth in domestic leisure travel to Victoria will be modest over the coming decade.

 

“Assuming this is the case, then international visitation to Victoria will become a key driver of economic growth,” insists Blake.

 

Melbourne Airport has pledged to build on its successful formula to help ensure this is so. “We have worked hard over the last few years and are now seeing the success of that effort,” adds CEO Chris Woodruff. “But we must not be complacent, and will continue to deliver benefits over other airports so that our passengers and airline customers will want to fly to Melbourne.”

 

 

 

 

 

 

Asia-Pacific Airports 2011 Issue 2

What better place to shop than an airport? Peta Tomlinson takes a closer look at some Australian retail initiatives.

It might be a last minute gift to take with you, a memento of your travels or simply because you’re there.

An airport provides some wonderful ‘me time’ for visitors and the chances are you will spend it shopping.

After all, once you’ve arrived and checked in for your flight, you can guiltlessly spend the next hour or two ambling around at your leisure.

In such an elevated mood, with bright lights, brands and bling all beckoning, who can resist a little retail therapy? Not many, according to the tills that are ringing loudly at Australian airports.

Sydney – currently revamping its retail offering as part of the T1 expansion – has some of the highest reported retail sales per square metre of any airport in the world, and double the annual turnover per square metre than some of Australia’s largest shopping centres.

Derek Larsen, general manager for retail at Sydney Airport Corporation Limited, credits the big spend on the feel good factor.

“People feel good when travelling,” he enthuses.

“They might have saved for a holiday, and are finally about to leave. Or they’re enjoying some down time in a hectic business day.

 

Personally, I think that with the right retail mix people will come to an airport early just to experience the environment, relax and purchase something – they see it as their reward.”

Even the economic downturn does not seem to be impacting on customer spend.

Preliminary figures for the year to date show Sydney Airport’s retail operators are still enjoying single digit growth in terms of PSR (passenger spend ratio), and double-digit growth in duty-free sales compared to the previous year.

While the strike rate (the number of people who shop) is holding steady, the average value of their transactions has increased significantly.

A result, says Larsen, of “simple initiatives – having the right products on the right shelves for the people coming through”.

Sydney Airport’s analysis of passenger spending habits maps their entire journey, including, notably, which airline they are flying, and to where.

This data has influenced the retail mix in the current redevelopment, which caters not only to the ‘traditional’ airport shoppers – women passengers buying luxury products – but also to men, children and teenagers.

Hence, there will be a focus on men’s fashion as well as women’s, and a number of world firsts, including the first airport Wiggles store, the first Lonely Planet, and the first McDonald’s to operate airside in Australia.

“These initiatives are purely focused on delivering to parts of the business that haven’t previously been explored,” Larsen says.

And with almost 100% leasing completed, it seems the retailers agree Another airport cashing in on the ‘happy people spend’ school of thought is Gold Coast Airport in Queensland.

The coast’s reputation as Australia’s favourite seaside playground is evident in a retail strategy designed to make visitors “feel like they are on holidays from the moment they step off the plane”.

It’s all part of the Gold Coast experience, says Paul Donovan, Gold Coast Airport’s chief operating officer.

While they shop in the airport’s redeveloped retail precinct (due for completion in March 2010), passengers overlook picture-postcard hinterland views.

The new retail mix has a strong focus on holidaymakers; it even includes a convenience store so visitors staying in self-contained accommodation can stock up on supplies.

Brisbane International Airport invested heavily in its newly redeveloped retail precinct, and when it opened – in December 2008 – it was the height of the financial crisis.

In spite of the difficult timing, management stuck with its key retail strategy of luxury goods for discerning buyers.

Stores stocked their shelves with Hugo Boss suits, Marc Jacobs jewellery, Oroton purses and A$4,000 bottles of Cognac.

Is anyone buying? “Absolutely,” says Barry Kairl, terminals and retail commercial manager. “We are delighted at the turnover, which is running between 5% and 15% up on the previous year.”

Brisbane Airport also has ‘exceptional’ duty free stores, which measure over 2,000sqm, and its share of affordable, quirky souvenirs.

Why has this strategy worked so well? “We underwent an extensive researching process of current and future retail trends and brands which gave us a very credible database of information,” says Kairl.

“We also worked at length with our retail owners and operators at the Terminal to get an invaluable and in-depth understanding of the ins and outs of their business.”

Adelaide Airport Limited (AAL) has been strongly promoting its retail offering, including a ‘Make the Most of the Moment’ campaign to tempt passengers with last-minute gift ideas.

Last year, the campaign was backed by a competition to win a spin around Adelaide’s Clipsal 500 street circuit in a V8 Supercar.

This year’s first prize is a trip for two to China, leveraging off AAL’s sponsorship of the pandas soon to arrive at Adelaide Zoo.

AAL has also used the launch of its new Adelaide Airport magazine to promote retailers through advertising and editorial.

As a result of all these strategies, says Ken May, AAL’s general manager, property development, retail revenue has grown over 10% in the last 12 months – well ahead of the overall increase in airport passenger numbers of 2.4% for the same period.

Perth Airport has tailored its retail mix on the basis that most visitors go to the west for a uniquely Australian experience.

Scott Norris, Perth Airport’s general manager commercial services, says retail spend rates and overall sales “remain good and are increasing” on the back of strong passenger growth.

Retail comprises around 16% of Perth’s overall operating revenue, and while there are “no particular issues with any retail categories”, Australian-made products are a standout performer.

The reason, Norris explains, is that so many passengers transiting through Perth, both domestic and international, want to take a piece of Australia back with them.

“Whether it be wool, food or wine, they’re looking for something that is relevant to their destination.”

Hence, ensuring that the local product offering is both relevant and authentic is a core component of Perth’s retail strategy.

The ‘Aussie image’ also features in a growing variety of brands at Perth Airport, most notably the newly opened surfwear shop Rip Curl, and Sunglass Hut.

Another feature of the Perth retail landscape is its strong duty free culture.

“Perth Airport is also focused on growing the variety, quality and authenticity of its F&B offer and is continuing to seek new retailers to add to the retail mix,” reveals Norris, adding that planning for Perth Airport’s newest terminal – Terminal WA – is well underway as a result of the massive growth in intrastate aviation traffic in Western Australia.

The A$1 billion redevelopment over the next five to seven years will include “a superior retail experience”, Norris says.

“All upgrades are in line with our retail strategy to increase the range of local and luxury brands and improve the overall retail experience for our passengers.”

And Melbourne Airport, currently undergoing the largest international terminal expansion since it was built in the early 1970s, is planning to give shoppers a truly “Melbourne experience”.

The A$330 million expansion will add 25,000sqm to Terminal 2, including 50% more café, lounge and specialty store space.

“Melbourne has internationally renowned fashion precincts, and we want to do justice to those,” enthuses Shane De Wit, Melbourne Airport’s acting general manager for retail and car parks.

“We will be drawing on the best Melbourne has to offer: shopping, art, culture and architecture.”

A 10 metre high glass wall overlooking the runway will give openspace views comparable to Melbourne’s parks and gardens.

Another precinct will recreate the city’s famous hidden laneways, while another salutes its cafe culture.

Melbourne’s strategy also takes into account changing passenger profiles.

“In the next five to 10 years we will see a massive increase of passengers from China and India,” explains De Wit.

“They’re not after the ‘grog and smokes’ that was once all that was expected of an Australian duty-free. This is an awesome opportunity for us to make sure we deliver for them a truly international flavour.”

That people are still spending in these Australian airports despite the economic crisis is evidence that management is getting their retail mix right.

With airports ever more reliant on non-aeronautical income, it is a timely reminder of the importance of research, knowing your customer, and how to constantly innovate for growth.

Asia-Pacific Airports 2009 Issue 3

Frances Cream is ACI Asia-Pacific’s Young Executive of the Year – Peta Tomlinson recently caught up with her.

Marketing managers are supposed to pitch their product, although it’s not only duty that calls Frances Cream, newly crowned ACI Asia-Pacific’s Young Executive of the Year, to wax lyrical about the joys of Australia’s Gold Coast.

“What’s not to like?” asks the 31-year-old marketing manager at Gold Coast Airport in Queensland.

“I live opposite the beach, and the airport overlooks the beach.

I can walk along the sand every morning, and swim in the ocean most months of the year.

I can’t imagine a more beautiful place to live and work,” she says.

Cream, an ex-Sydneysider, espouses the Gold Coast Airport’s mantra that “you feel like you’re on holiday the minute you arrive”.

She has held her current position for two years, after Cream and husband Glenn decided on a sea-change.

“I was living in the heart of Sydney, while Glenn, from Tasmania (an island, and Australia’s southern most state) is not really the city type.

When we got married we wanted a different lifestyle, and the Gold Coast seemed perfect.”

Cream had always been drawn to travel and tourism.

Originally a travel agent, she went back to study a masters degree in marketing, starting her new career at Tourism Australia.

Her arrival on the Gold Coast two years ago coincided with its airport needing a new marketing manager, a role Cream considers to be her dream job.

of it all, and the way it brings people together from all over the world.

“We have an internal word for people who are into aviation – aerosexuals – and that’s me, so this job is a perfect fit.”

When she first arrived, Cream explains, the Gold Coast Airport was already a powerful brand.

It’s the aviation home of Australia’s favourite seaside playground, world renowned for its glorious subtropical climate, seemingly endless kilometres of golden surf beaches, spectacular hinterland, award-winning restaurants, great shopping and thrilling theme park attractions.

With a A$100 million terminal redevelopment then about to begin (and now in its final stages, due for completion in March 2010), Cream’s goal was to ramp up the marketing to cement Gold Coast Airport as a first-choice destination for southeast Queensland.

“My aim was to get more locals to use it, and having Brisbane people look at the Gold Coast as their airport as well – even for (some) international departures,” says Cream.

How? “Well Gold Coast is a more affordable option for outbound passengers, with lower car-parking costs and lower fees,” she explains.

“And with our nearly completed terminal extension bringing a wide choice of retail and F&B offerings, it’s no longer a small-town airport.”

For arriving passengers, Cream adds, the airport, with its stylish interior design and views over the surrounding hinterland, will be “part of their Gold Coast experience”.

Being from the new school of marketing, Cream has drawn on technology to help spread the word: in addition to traditional media, she leverages the cost effective, broad-reaching online environment, including Facebook, news feeds, email alerts, even Twitter.

“To my knowledge, we are the first airport in Australia to have a Twitter site,” she says.

As a result, the Gold Coast Airport’s website hits are up 50%–70% from last year.

Cream’s marketing strategy has also focused on working with airline partners to develop new routes and restore flight frequency that was cut during the economic slowdown.

Marketing co-operatives were formed so the airport could join hands with airlines and the tourism industry to do larger campaigns, and the results again are proven.

Last financial year the Gold Coast Airport recorded over 4.6 million passengers, up 11.6% on the previous year, including a 97% jump in international numbers.

And the numbers so far this year look promising, too.

Working with the airline’s research department and passenger focus groups to propose new routes has also paid off, notably with Virgin Blue’s new Gold Coast–Townsville service, and the introduction of new carrier Airnorth with a Gold Coast–Mount Isa–Darwin route.

“I don’t think Virgin Blue would have thought to go to Townsville if not for that,” Cream says.

Low-cost carriers (LCCs) were targeted to give the airport a competitive edge.

When the new terminal is finished, it will be the largest purpose-built facility for LCCs in Australia, streamlining efficiency for carriers and their passengers by having a common check-in for all airlines, self-service kiosks, a single baggage collection and screening point and one main departures and arrivals area.

Cream saw her entry in the ACI Asia-Pacific Young Executive of the Year award as a way of contributing her ideas on how the airport industry can rise above the challenges of the financial crisis.

Despite the intensity of the current economic climate, she stresses the need not to lose sight of long-term sustainability.

To this end, Cream feels airports must be more strategic and innovative, becoming “more accountable for the fate of the airport user, whether it is the airline, or airline customer or concessionary owner”.

Her solution, as evidenced in initiatives at the Gold Coast Airport, involves all stakeholders in aviation business pulling together in an integrated approach.

“It is during these tough times that airports have opportunities to grow and develop partnerships and work collaboratively yet competitively to ensure sustainability and growth in the ever changing aviation industry,” Cream says.

“By knowing their position in the market, who their key customers are and understanding their needs, airports can continue to manage infrastructure costs with revenue while facilitating growth for airlines.”

Cream will be presented with her award on November 3 in Kuala Lumpur at the 19th ACI World & Asia-Pacific Conference and Exhibition.

Her $1,000 prize money won’t be spent on flying lessons, or even more trips abroad – indeed, after Kuala Lumpur, Cream will be grounded for a while as she prepares for her next challenge: the birth of her first child, due early next year.

But no doubt, during her happy time ahead while on maternity leave, at least part of this young executive’s head will be in the clouds, still dreaming of ever new heights and clever new marketing ideas for her beloved aviation business.

Asia-Pacific Airports 2009 Issue 4

How is passenger traffic holding up at Australia’s regional airports? Peta Tomlinson investigates.

Australia is known as the ‘the lucky country’, in reference to a range of endearing features.

Its remoteness is one, and its vastness another.

Although both can be viewed as a positive or a negative, depending on one’s perspective, it’s reassuring to know that when problems occur elsewhere in the world, Australia is far enough away not to be too bothered.

This certainly seems to be the case in regard to the global aviation industry.

With airlines facing an unprecedented crisis due to weak demand and fluctuating fuel prices, airports worldwide are feeling the pinch – most everywhere, it seems, except Australia.

While passenger numbers are down elsewhere, the major hubs of Melbourne and Sydney have recorded ‘best ever’ months.

And the regional gateways are travelling well, too.

Why? There is no doubt that Australia’s regional destinations have benefited from cut-price or even ‘free’ airfares offered by the likes of nofrills international carriers Tiger and AirAsia.

A strong Australian dollar also helps when value for money is sought.

But as Cam Macphee, aviation business development manager at Brisbane Airport Corporation, points out, what counts for much in these uncertain times is that Australia is still seen as a safe destination.

“Australia is insulated from many of the world’s problems, and this is a critical consideration for all airlines or potential airlines that are going to be flying here,” Macphee says.

The lure of a ‘remote’ travel experience is a further drawcard for Australia’s regional airports, particularly for Perth in Western Australia, the closest gateway to outback destinations and the vast Indian Ocean coastline.

International volume at Perth grew 8.

5% in June, with domestic up 3.3%.

Many visitors say they choose Perth for an “authentic Australian experience”, noting in particular the pristine environment and laid back lifestyle.

From an international perspective, explains Brian Krause, Perth Airport’s aviation business development manager, Perth has benefited from capacity increases from a number of new carriers entering the market, with many of the new services from low-cost carriers (LCCs).

Targeting low-cost carriers was a key strategy to help Perth Airport through the current climate, and it seems to have worked.

In May 2008 Perth had a 15% share of Australia’s LCC capacity – now it enjoys 25%.

Another strategy was engagement with existing carriers to ensure they are well informed about the opportunities in the Perth market, including economic and demographic information, Krause says.

“We are constantly reviewing available information to better understand our markets.

Using that information, we consider which airlines are best positioned to potentially serve underserved markets.

Apart from targeting LCCs for the past couple of years, we also look to make sure that our existing and target airlines are updated with enough information to build the business case for serving Perth, and that their aircraft allocation decisions are made on a fully informed basis.

” New or expanded services launched from Perth in the past year include a daily Jetstar service to Singapore, a Perth–Denpasar route from Pacific Blue, and daily AirAsia X flights to Kuala Lumpur.

Indonesia AirAsia commenced daily Denpasar services in July 2009, adding further to Perth’s LCC capacity.

“A number of carriers also increased capacity by changing aircraft types or adding frequency,” adds Krause.

“While not adding as much capacity as a new route, these capacity increases have still been taken up to a large extent.”

Most significant have been the decisions by Cathay Pacific and South African Airways to introduce daily services on their respective Perth–Hong Kong and Perth–Johannesburg routes.

“The net result of these changes is that there is continued growth in outbound resident travel, taking advantage of Perth’s close proximity to South East Asia and the new low-cost carrier services.

There has also been strong growth in some inbound markets, with visitors from Malaysia up over 80% in recent months.

Perth has also benefited from growth in visitors from South Africa and New Zealand, up 13% and 10% respectively in the 11 months to the end of May 2009.”

The attractions of South Australia’s world famous wine regions, including the Barossa and Clare Valleys, the Adelaide Hills, Southern Vales and Fleurieu Peninsula, have also held Adelaide Airport in good stead.

Buoyed by a strong domestic market, Adelaide in May had the second best growth of the top five Australian gateways – and even though the rise was “only 2%” according managing director Phil Baker, he notes that it was an increase that many industries might envy.

Malcolm Andrews, Adelaide Airport’s general manager, business development, believes that the gateway is “faring well”, considering the global scenario.

“March was our record month for domestic passengers, and overall for the 12 months ending May we were 3% up for domestic traffic, 1.2% for international and 2.6% overall.

Domestic-wise, April and May were again the best figures ever for both months,” he enthuses.

ompetitive international arena.

Even so, route development is continuing, with Adelaide still bagging new airlines and new destinations.

“Pacific Blue, for example, launched two Bali flights last December – our first since September 2006 – and added a third in June,” adds Andrews.

“Also, for the first time we have introduced two non-stop flights to Nadi (Fiji) with Pacific Blue.

Take-up has been a little slow but we remain convinced that in the long-term this will be a winner.”

From an international perspective, the ace up Adelaide’s sleeve is that it remains relatively underserved.

With over 47% of outbound passengers going via other gateways, this leaves large chunks of the market untapped.

Adelaide is seeking to overcome this by growing its suite of non-stop destinations.

Adelaide Airport Limited is targeting a number of airlines servicing destinations it views as ‘realistic’.

These include Bangkok, Christchurch, Los Angeles, the Middle East and Mainland China in the relatively near-term, followed by Jakarta, Ho Chi Minh City, Seoul and Japan.

While many will come to visit South Australia’s world-class wineries, gourmet food, unspoiled beaches and outback, they won’t all be tourists.

In one market segment alone, 50,000 Philippine guest workers can potentially come to work in South Australia.

And with three major Australian universities and plans for two British universities, Adelaide is set to grow as a hub for students from all over Asia.

Nonetheless, Adelaide is being cautious.

While still planning for expansion, it will not move into the construction phase until “the traffic situation improves and the financial markets return to normal”.

“Once that happens, and taking into account South Australia’s rapidly expanding mining and defense industries, there would appear to be a strong upside for several years to come,” says Andrews.

More sunshine in the economic gloom can be found in Queensland, thanks largely to the various airlines’ discount pricing.

Brisbane’s recent results have included an “off the scale” month in April, when international arrivals jumped 6.9%, with domestic up 3%.

This prompted Gert-Jan de Graaff, Brisbane Airport Corporation Pty Limited (BAC) general manager of commercial services to note that, with lower airfares and more choices, “air travel now rates very much as a discretionary purchase alongside concert tickets, a new TV or a big night out”.

While Brisbane’s financial growth for 2009 is lower than originally forecast, it is still ahead of last year.

BAC is now forecasting modest international and domestic growth for the next financial year or so, then returning to a long-term growth trend of 4%–6%.

Brisbane’s Macphee says international route development work is continuing with established network carriers over key hubs to either improve timings for connections, increasing frequency to at least daily when demand picks up and up-gauging aircraft where necessary.

“We are also talking to several other long-haul network carriers not currently operating to Brisbane with a three to five year time horizon.”

In one example, BAC is in discussions with Chinese airlines China Eastern, China Southern and Air China to fill the gap, as there are no non-stop Brisbane to Mainland China air services, despite annual passenger flows to China growing to nearly 130,000 in the past 12 months.

Further north, the combined effects of Swine Flu and the global financial crisis have hit Cairns Airport.

“These factors have further exacerbated an existing downturn in our key international market of Japan,” explains Stephen Gregg, CEO at Cairns, Australia’s largest regional airport.

What to do? Apart from partnering with tourism authorities to consolidate existing markets, the airport has prioritised working with its airline partners to ensure their existing routes into Cairns are sustainable, admits Gregg.

“We also continue to build new partnerships and look forward to working with all our airline partners to develop new routes to link with key emerging markets once conditions are again conducive to such expansion,” he says.

But there is good news for Cairns on the route development front.

Jetstar has announced plans to reintroduce a direct Cairns–Osaka service in December this year with four flights per week, complementing the Cairns–Gold Coast route launched by the airline earlier this year.

Other new services this year include Cairns–Townsville, operated by Virgin Blue, and Cairns to the mining centre of Mt Isa, operated by Regional Pacific.

A key reason for continued optimism in Australia’s regional gateways, observes Brisbane’s Macphee, is the country’s strong economic fundamentals.

Unlike most other developed economies, he points out, Australia has not yet fallen into recession.

“As a result, consumer confidence is higher than in other regions of the world, making Australia a safer destination for airlines.

Furthermore, Australians are still eager to travel overseas with a relatively strong dollar, ensuring a continual attraction for foreign airlines in the Australian outbound market,” says Macphee.

Asia-Pacific Airports 2009 Issue 4

Stuart Bowden discovers more about the development plans of Australia’s gateway to the Great Barrier Reef.

As tourism ‘honey-pot’ destinations go, Cairns and Tropical North Queensland (TNQ) rank high on the worldwide ‘must see’ list.

The Great Barrier Reef and World Heritage listed ancient rainforests are two principal reasons this tropical paradise is Australia’s second most visited region by international leisure travellers after Sydney.

In the circumstances then, it should come as no surprise to learn that Cairns International Airport is the country’s biggest regional gateway handling around four million passengers per annum.

Its traffic mix means that it is currently Australia’s fifth biggest international gateway and sixth largest domestic airport, with overseas visitors accounting for more than 40% of all passengers on its domestic routes.

Indeed operator, Cairns Port Authority (CPA), has so much faith in the continued tourism appeal of North Queensland that CEO, Neil Quinn, boldly predicts future traffic growth for the gateway, despite today’s high fuel prices and strong Australian dollar that may deter some airlines from launching new services to the airport.

And almost as if to prove the point, the airport recently unveiled plans to invest A$200 million on an extension to the Domestic Terminal to pave the way for this anticipated growth.

Creation of a more flexible facility is the keystone of the project, according to Quinn, who believes that a common use check-in hall and baggage handling area will significantly enhance operational efficiency.

“It was clear from the outset that simple logic should dictate the Domestic Terminal’s new design, allowing for uninterrupted passenger movement, whether arriving or departing the airport,” says Quinn.

“Common user technology will ensure smoother passenger flows, with airline check-in taking place at the southern end of the terminal, and all arrivals at the northern end, regardless of which airline a passenger flies with.

“Airport security was also high on our list of design priorities, with automated multi-view checked baggage screening machines, and progressive introduction of additional passenger screening facilities that will comply with government regulations.”

In addition to expanded passenger, security and baggage handling facilities – the terminal’s total floor area is to more than double to 43,000sqm – the new-look building will boast more airline office space and airline lounges on the upper floor. They will include a relocated Qantas Club lounge.

From the central terminal area, passengers will use covered walkways and ramps to walk to their flights, boarding aircraft by one of five planned new aerobridges.

Outside the terminal building, CPA is to increase the number of car parking spaces available from the existing 622 to almost 1,000 in a combination of short, long-term, secure and covered facilities.

Quinn admits that the main aim during the construction of the new-look terminal will be to cause the minimum of inconvenience and disruption to both passengers and airlines before its 2010 opening.

He believes that the expanded terminal will ensure that the airport is equipped to meet demand until at least 2015 and provide options for further future expansion.

Planning for the project began in 2004, when Cairns Port Authority launched a strategic development plan forecasting demand and future use of its resources for the coming 20 years.

Airlines offering direct international air services from Cairns today include Qantas (Tokyo), Jetstar Airways (Nagoya and Osaka), Cathay Pacific (Hong Kong), Air New Zealand (Auckland), Air Niugini (Port Moresby in Papua New Guinea) and Continental Micronesia (Guam). Jetstar also serves Singapore via Darwin.

Quinn is generally pleased with the mix of international routes, although he admits that he would like to add more to compensate for a downturn in the number of Japanese holidaymakers visiting North Queensland.

Indeed last year’s sharp decline in traffic was a big blow for the airport as the Japanese have traditionally accounted for more than 50% of all international arrivals in Cairns. The dip was not entirely unexpected, however, as the number of Japanese visitors to Australia has been falling since 2002.

“While there may be many drivers behind the decline in numbers, the key factor is considered to be the relative exchange rates,” says Quinn. “The strength of the dollar has made Australia much more expensive for Japanese travellers. And high fuel prices have led to fare increases and surcharges, which have also impacted on demand.”

He adds that CPA’s bid to attract new airlines hasn’t been helped by current airline economics, which he claims has led to many carriers favouring direct services to major capital city hubs in preference to regional airports like Cairns.

“The presence of higher yield business travellers and larger catchments to support outbound services ensures that, in most cases, the capital hub prevails in any comparative financial analysis undertaken by airlines,” says Quinn.

“The Cairns aviation business, being predominantly leisure based, is lower yield for airlines compared with other destinations, particularly for international services.”

Quinn, however, insists that in the case of Cairns, it is clear that there is “considerable passenger demand to visit the local tourism icons”.

“The number of visitors to Australia is increased where direct services provide the international customer with greater flexibility to plan itineraries, and have mono-destination holidays at major regional locations like TNQ,” states Quinn.

“The success of TNQ in growing a strong mono-destination Japanese market is a good case in point. It has been able to compete successfully for the time-limited Japanese tourist against destinations like Guam, Saipan, Hawaii, Korea and Thailand.”

Aviation services, says Quinn, are “critical” to the sustained development of the Tropical North Queensland region. “Not just for tourism, but also for other sectors of the local economy such as education, mining and health services,” declares Quinn.

“Currently there is A$10.2 billion worth of new economic project investments in the region – nearly A$7 billion specifically residential or resort accommodation. As a result, a number of significant new and emerging assets are re-shaping the region’s tourism industry, including the new Cityport South redevelopment at Cairns Seaport.”

Cairns Airport has adopted a collaborative approach to route development through involvement with other key stakeholders, among them the regional tourism promotion organisation, Tourism Tropical North Queensland and the state tourist authority, Tourism Queensland.

Quinn firmly believes there is room for additional carriers to provide access to Europe through key Asian hubs such as Singapore, Bangkok or Hong Kong.

“As aircraft delivery schedules recover, and capacity and fleet availability increase, current forecasts predict that international passenger numbers will grow by 4% and domestic throughout by 5%,” says Quinn. “However, a new entrant to Cairns could make these figures substantially higher.”

Quinn is clearly upbeat about Cairns’ future as a major regional destination. His confidence in the pulling power of North Queensland is being boosted by the fact that he knows that the gateway will soon boast one of the best domestic terminals in Australia.

Asia-Pacific Airports 2008 Issue 1