The Commonwealth’s support for, and regulation of, regional aviation – always a vexed matter for airport-owning councils – is up for serious discussion.
The Department of Infrastructure, Transport, Regional Development and Communications published an issues paper this week suggesting the Federal Government will consider:
- Reducing the regulations to encourage greater competition and local investment;
- Greater local decision-making so local governments and state governments can determine their own aviation priorities and needs; and
- Targeted assistance for critical aviation infrastructure and services.
It was only in March that the Department issued a Regional aviation policies issues paper canvassing the aviation needs of smaller regional towns and communities, the infrastructure required to support this, the costs involved, and the resources available from governments.
However, Covid-19 put paid to that consultation process.
The issues raised by The Future of Australia’s Aviation Sector: Flying to Recovery all warrant thorough investigation with an eye to producing viable reform options – the more so given the extent to which Covid-19 has upended the entire aviation sector.
Whilst federal and state governments provided substantial support packages for airlines during Covid-19, councils that own and manage airports got very little assistance and, even worse, were told to stop charging fees – an odd state of affairs given airports are a critical component of an aviation network.
It is arguable that the Commonwealth-brokered deals transferring ownership of ex-Aerodrome Local Ownership Plan (ALOP) airports to councils have afforded them little flexibility for putting their assets to other uses and to help make them more sustainable.
In contrast, the new owners or lessees of the major airports privatised in the 1990s appear to have been completely unconstrained in setting up commercial enterprises on their sites, including warehousing, commercial offices and shopping centres in direct completion with those on surrounding areas expected to comply with local planning laws and pay local taxes.
The ALOP arrangements must be revisited to level the playing field, lessen councils’ dependence on parsimonious airlines or governments, and free them up to improve their airports so they better fulfill regional, state and national connectivity goals.
The Federal Government’s advocacy of a “light touch” regulatory regime makes such reforms a distinct possibility – as does its desire to advance freight and supply chain reforms.
Reforms are also needed to address aviation’s changing dynamics.
The near-demise of Virgin Australia and its abandonment of seven regional destinations is the most obvious manifestation of that change, but Covid-19 has also opened the way for smaller airline operators to step into the vacuum – and for operators like Regional Express and Alliance (a big player in the fly-in fly-out charter market) to grab a greater share of the RPT market.
Aviation’s role in enabling exports of food and other perishables to Asia’s growing middle class will only increase in importance too.
The issues paper states the Federal Government wants to minimise disruption to the aviation sector as it phases out direct assistance provided during Covid-19.
Post Covid-19, it wants “a competitive and efficient aviation sector providing high-quality, low-cost, environmentally sustainable and secure services”.
It also sees a role for itself – together with state, territory, and local governments – in “ensuring minimum access to essential aviation services and connectivity in regional Australia”.
This consultation process provides the grounds for local governments in rural, regional and remote areas to advocate for the removal of historical ALOP constraints so they can pursue non-aviation related activities within their airport precincts and improve their financial viability.
The other point that needs to be made is that RPT, GA, and essential services have always required a degree of targeted state or federal government assistance, and always will – particularly if broader regional development strategies are to be successfully implemented.
With submissions to close on 13 November, councils have only a short window to highlight their role as a vital infrastructure provider for essential and non-essential air services.
The take-home message our sector needs to reinforce?
Without viable, safe, and well-run regional airports, there is a real risk air connectivity challenges will become unsustainable.