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STANDING COMMITTEE ON TRANSPORT AND REGIONAL SERVICES - 11/06/2003 - Commercial regional aviation services in Australia and alternative transport links to major populated islands

CHAIR —Welcome. It is proposed that the committee accepts the submission of Ipswich City Council, takes it into its record and authorises it for publication. There being no objection, it is so ordered. Mr Mundt, although the committee does not require you to give evidence on oath, I have to advise you that these are formal proceedings of parliament and warrant the same respect as would attend to the House of Representatives itself. The giving of false or misleading evidence is a serious matter and can be regarded as a contempt of the parliament. Would you like to give us a five- to seven-minute overview of the council submission?

Mr Mundt —I have a supplementary submission which details the issues I would like to address today and which includes some issues that have happened since the initial submission. In summary there are essentially two issues relating to regional aviation services in the Ipswich region.

CHAIR —You might like to describe for my colleagues where Ipswich is, how far it is from Brisbane and what airport facilities it has. It is a bit of an unusual case for regional aviation in this context.

Mr Mundt —Ipswich is 40 minutes by road along the Ipswich motorway due west of Brisbane. It does not have a regional airport. It has RAAF Air Base Amberley. There has been a lot of discussion about the requirements for regional air services in the area. We have carried out a market demand study which has confirmed that. That was the substance behind our submission, and the reason we are here today is to discuss those opportunities. There has been a lot of interest in the public for the provision of a regional air service.

CHAIR —We will get you to speak to this but is what you have handed across a supplementary submission or an exhibit?

Mr Mundt —It is a supplementary submission.

CHAIR —It is proposed that the committee accepts the supplementary submission of the Ipswich City Council as evidence and authorises it for publication. There being no objection, it is so ordered. Would you like to speak to both documents now? It is the second one in particular, is it?

Mr Mundt —The second one summarises the issues. It stands alone.

CHAIR —How about speaking to this for five or seven minutes and then we will get into the questions?

Mr Mundt —As I said, there are two issues relating to regional air services in Ipswich City Council. The first one relates to the opportunity for a regional airport with passenger and freight services. Following public demand in the mid-1990s, Ipswich City Council and the Department of State Development commissioned a market demand study to identify the demand for regional air services. That study was submitted as part of the original submission. That study clearly identified that there was a demand for passenger flights from the Ipswich region. The demand was essentially driven by the western suburbs of Brisbane which in the survey clearly indicated that they prefer to turn right, travel to Ipswich and catch a regional flight to Sydney destinations, and from a catchment area in the Lockyer Valley up to Toowoomba and out along Boonah, Gatton, Laidley and Esk. It was basically for two areas—the business sector and the travel sector, people wishing to travel to Sydney to connect with overseas flights or to travel overseas on boats.

Following the market demand study which identified that need, Ipswich City Council entered into some discussions with the RAAF base Amberley to identify a suitable site for a proposed facility and some operating conditions with the base. One of the reasons we are putting in the submission today is that we would like some assistance if we could with those negotiations. They have not been easy for us from a council point of view. We understand the world situation has changed dramatically, but we are having some difficulty with the Department of Defence in getting some clear and concise operating conditions and identifying a suitable site. The second thing we would like some assistance with if possible is the ways in which we could provide infrastructure to the site in terms of a terminal and the supporting road and bridge network to make it happen, and, if it is possible, some guidance and assistance on identifying a potential airline operator. They are the issues that our council would like some assistance with.

CHAIR —Starting with that last issue first, this is an inquiring committee. It is an all-party committee with the parliament. We do not have a lobbying role as such to lobby on your behalf for a terminal. You would have to do that through your local member and those sorts of things.

Mr Mundt —I understand how that works.

CHAIR —But we are interested to hear the issues and the arguments.

Mr GIBBONS —What is the population of Ipswich?

Mr Mundt —It is 135,000.

Mr GIBBONS —And you are 40 minutes by road from Brisbane. Is that to the CBD or Brisbane airport?

Mr Mundt —That is to the CBD. The Brisbane airport is often an hour and half if you go through the CBD in peak-hour traffic.

Mr GIBBONS —You have had discussions with Amberley. That is not for a joint facility; that is just to inform them of what you are planning and what you hope to achieve and to do it in a way that is not going to impact on their operations—is that the idea?

Mr Mundt —That is correct. It is to see if there is any potential to work with them. Initial discussions identified that they had a mandate to work towards that, in that anything that maximised the use of their runway, their control tower facilities and their firefighting facilities would be something they would work towards, and we were quite positive with that.

CHAIR —So you are not planning a new runway; you will use the existing runways.

Mr Mundt —We would use existing taxiways. We would have a minor amount of taxiway infrastructure to link with one of their taxiways and then link up to their major runways. Essentially, the discussion with the base revolved around identifying a suitable parcel of land in relation to their master planning and then some operating agreements which enabled us to use their control tower facilities and be supported with their firefighting services.

Mr GIBBONS —Your research showed that the people in the western suburbs of Brisbane would rather drive to Ipswich to catch a flight than go to Brisbane airport.

Mr Mundt —That is correct, yes.

Mr GIBBONS —Are the figures in your submission?

Mr Mundt —The figures are in the initial submission as part of the survey. Essentially, they cited two reasons for that. One is that it is an easier drive in terms of time and not having to fight peak-hour traffic in the morning. So there is a saving of time and not having to fight the peak-hour traffic. The second one is that they are often put in a holding pattern when they arrive in Sydney on the bigger jets, and they have been told that landing at Bankstown airport on a smaller jet would save considerable time. A fair percentage of the businessmen travelling to Sydney indicated that they do not have business in the CBD, so landing at Bankstown airport would be a suitable option for them.

CHAIR —Do you see Ipswich becoming a Bankstown, or do you just see it being another commuter airport?

Mr Mundt —At this stage I would have to say just another commuter airport. The demand has not been identified as strong enough at the moment to be something like a Bankstown.

CHAIR —Have you discussed with the RAAF base or the defence department what sorts of costs they would levy on landing charges, passenger tax and the like?

Mr Mundt —We have discussed that, but they are not able to identify a cost until they get more serious about that. The best advice is that it would be similar to other commercial operations. They cite examples of Williamtown and—

CHAIR —For other commercial operations, as we have heard today—you probably heard the evidence—it is as low as $4.50 and high as $12. There is a huge fluctuation there.

Mr Mundt —I was not aware of such a variance.

Mr GIBBONS —How far away is Ipswich from the existing light aircraft landing ground? Obviously Brisbane must have one, where the flying clubs et cetera operate from.

CHAIR —Archerfield.

Mr Mundt —Archerfield would be 35 minutes on the Ipswich motorway.

Mr GIBBONS —Why wouldn't you spend some money on that landing ground and get that up to the standard you want rather than start again?

Mr Mundt —I think the issues are the same. Providing a civilian terminal at Archerfield—which is now under private ownership, and we have not been able to negotiate with that operator—is in terms of cost the same as providing a civil terminal adjacent to the RAAF base. The big difference is that RAAF is in the dead centre of the catchment area that we are targeting. Archerfield is a lot closer to Brisbane and getting away from some of the core customers.

Mr GIBBONS —Are there rail facilities from Brisbane to Amberley?

Mr Mundt —Not to Amberley; the closest is to Wulkuraka, which is five minutes by road.

Mr McARTHUR —We have heard a lot of witnesses complain quite strongly about the setting up of a regional airport and the cost structure involved—that is, the buildings, maintenance and running of an airport. You are putting a new proposition to us in that you actually want to set one up. Are you hoping to hang on the coat-tails of RAAF Amberley and that is the fundamental strength of the proposition?

Mr Mundt —In the discussions we have had with the RAAF base they have not been able to provide any financial assistance, and they have been very strong on that. We understand their reasons in that their primary reason for existence is as a defence base. They have not offered any funding support for the operations of the commercial airline, and so the feasibility study identified in this report does not have any input in terms of the financial advantage of being next to an RAAF base.

Mr McARTHUR —But you would use their strip, presumably. That is a big cost.

Mr Mundt —Yes, and that is the big cost.

Mr McARTHUR —What about the control of airspace? Are you happy that you would be dealing with military type aircraft and civil type aircraft?

Mr Mundt —In the discussions we have had with the RAAF base to date they have indicated that there is a fair percentage of vacant time on their runways. Even during major operations there will still be sufficient time to land the number of aircraft anticipated in the report. They have been very quick to point out that it is a defence base primarily and that any civilian operations would always come second to the Defence operation, but they have been very optimistic about the potential for domestic flights to fit in with their timetabling.

Mr McARTHUR —Other witnesses have argued the case that if you are closer than an hour to a metropolitan city then the motor car would take over the transport operations. You are really saying 45 minutes and you are still putting a proposition to have a regional airport, which does not seem to tally with the evidence we have had from other witnesses.

Mr Mundt —I cannot quote the other witnesses, but in this situation Ipswich is outside a large metropolitan city which suffers a motorway that does become congested. A lot of the rhetoric we are reacting to has been driven by incidents on the motorway. It does not take much of an accident to hold up the traffic and it becomes a 1[half ] hour trip and people miss connecting flights. All of that builds up to an atmosphere where people are not happy to be travelling on that motorway to an airline destination.

CHAIR —You would not envisage people flying from Ipswich to Brisbane, would you?

Mr Mundt —No, not at all. The survey has addressed the fact that there is not a lot of potential even for flights to the Sunshine Coast or to Coolangatta.

Mr ANDREN —Just reading this survey briefly, I notice the suggestion of a potential Ipswich-Coffs Harbour-Newcastle-Sydney connection. Is that right?

Mr Mundt —That is a potential.

Mr ANDREN —I could understand why people perhaps might fly to Coffs Harbour. Has this been thought through on an economic model?

Mr Mundt —It has been the reaction from the survey. The people who commissioned the report, the Aviation and Leisure Corporation, physically surveyed the tourism operators, and a significant number of people in the catchment area in the Ipswich region—by that, I mean people west of Ipswich and up to Toowoomba, and as part of the tourist traffic there are sufficient numbers of people travelling to tourist destinations along the coast of New South Wales—have indicated they would prefer to fly if they had an option.

Mr ANDREN —Evidence has been given that 30,000 is about the cut-off point for a sustainable regional service. Would those sorts of numbers be available on a regular basis to those ports out of Ipswich?

Mr Mundt —I would not have thought 30,000, no.

Mr ANDREN —The point you made about Bankstown is interesting. There is an absolutely passionate wish by New South Wales regionals not to fly into Bankstown. Their traffic tends to be aimed at the CBD, indeed for connections for interstate and international flights. Why would people coming from Ipswich be different? Why would they accept Bankstown as an option?

Mr Mundt —I was referring to businessmen who responded and suggested that not all businessmen have business in the CBD. They are the people who indicated Bankstown as an option. But the tourists making connecting flights or travelling on boats have clearly indicated they would prefer the CBD as an option.

Mr ANDREN —I notice you have an option for air freight to international ports. Would you envisage that that can land the sort of cargo craft that are required, such as Air Tigers and so on?

Mr Mundt —Yes, we have been told that the RAAF air base can land anything that is currently able to fly. It has been demonstrated with recent air shows and some of the craft that have landed there. I might point out the demand for freight services is not as strong as the demand for passengers at the moment. That has been driven by interviews with the producers in the Lockyer Valley. At the moment there is sufficient spare cargo in the passenger flights to handle their demand, but they are saying that at the rate is being taken up they anticipate a shortage in the near future. So we have identified that not as part of the initial feasibility study but as a future opportunity.

Mr ANDREN —We have several proposals around, including Parkes as a hub for an international airport eventually, but of course the recent economic downturns and whatever have delayed that somewhat. I am interested in the interest by the regional carriers in this. Did you say that you had had talks with them and there is a strong interest in it?

Mr Mundt —We have had talks with them. No, there is not a strong interest. There is a varied interest, and I guess we are bringing that to the attention of the inquiry. It has changed dramatically—in the time that we have been dealing with this issue, since 1999, we have had interest ranging from very strong to mild and then complete 180 degree turnarounds, depending on the world situation. Things like 11 September, the collapse of Flight West Airlines and Ansett have had a pretty dramatic effect on the discussions we have had with those carriers, to the point where we have no definite carrier at the moment that we are dealing with. A lot of them are in a wait and see mode.

Mr ANDREN —I am not aware of the capacity of Brisbane airport, but is there an option that Ipswich could be the hub for Queensland as a regional port to distribute traffic to the south.

Mr Mundt —We have not considered that option. It has not been put to our councillors or our council. I guess the issue there would be amenity for the ratepayers.

CHAIR —Are you talking about freight or passengers?

Mr ANDREN —Passengers.

CHAIR —I would like to pursue Mr Andren's question further. What was the reaction of Qantas or QantasLink to a service?

Mr Mundt —Qantas put us through to their subsidiaries, who were mildly interested in the actual operations of the facility. They pointed out that they were not investors, they were merely airline operators, and they put it back to us to find an investor to provide the facility.

CHAIR —Do you really think that three, four or five times a week there would be enough traffic from Ipswich to Coffs Harbour to justify that major leg of the trip? I can understand going Coffs Harbour to Newcastle, Newcastle to Sydney, but it is that first leg which would be the critical one, wouldn't it? If that did not work, the rest would not work.

Mr Mundt —I cannot sit here and confirm that it would be sufficient from day one. The report indicates that it is strong enough now to try and build up the service.

CHAIR —It would be a milk run type of operation.

Mr Mundt —The one you are referring to, the Coffs Harbour one, would be a milk run operation and only appeal to tourists and that part of the trade. Businessmen would not tolerate that frequency of service.

CHAIR —We have heard evidence of people in the Newcastle area wanting the service. We never thought in terms of Ipswich, but it is a very interesting scenario. We have a submission from Toowoomba City Council. Have you discussed this with Toowoomba?

Mr Mundt —Yes, we have.

CHAIR —What role would you see Toowoomba airport playing? You could have Toowoomba, Ipswich and Brisbane within about 80 minutes of each other. It would be three major airports, if they were all to go ahead, within 80 minutes of each other. Would that start to divide the traffic?

Mr Mundt —It could easily. In the discussions we have had with Toowoomba they were very interested in the service we would provide. There would need to be some fairly serious consultation between all parties there to ensure that there is sufficient product for everyone.

CHAIR —Is Amberley near any rail link?

Mr Mundt —It is five minutes from a passenger line, at Wulkuraka station, which is an electric rail service in to Brisbane.

CHAIR —So they would have to come off the plane and get a bus to—

Mr Mundt —A bus to Wulkuraka would take approximately five minutes from Amberley.

CHAIR —There is no talk of a rail link to the airport or anything like that?

Mr Mundt —No.

CHAIR —Another question I would want to pursue—and this is not said to knock the proposal at all but, rather, to test it—is about people coming from the Queensland provincial ports such as Cairns, Townsville, Mackay, Rockhampton, Gladstone, Bundaberg, Maryborough and Roma in to Brisbane. If all those people wanted to connect with the services to the south, they would still have the 80-minute trip from Brisbane airport across to Amberley, wouldn't they?

Mr Mundt —Yes, that is correct.

CHAIR —One of the things we have heard in evidence is the importance of connectivity. There is resistance on the part of the New South Wales regional airlines, as someone just mentioned, against transferring to Bankstown or to Badgerys Creek. There is a lot of resistance from the regional airlines to using either of those two venues because their passengers want to be part of the mainstream of Australian aviation. We received evidence that 36 per cent of traffic goes into the major trunk system. How are you going to cater for that 36 per cent?

Mr Mundt —That has not been considered at this stage. The study identified that there was sufficient traffic outside of that 36 per cent to support the demand for an airport at Ipswich, so that does not rely on that 36 per cent using the service.

CHAIR —What would the value of the terminal be?

Mr Mundt —It would be $2.7 million.

CHAIR —Who would fund that? Would it be Ipswich City Council?

Mr Mundt —That is the issue at the moment: we have not been able to identify a suitable funding source and that is one of the reasons that the project has not proceeded. If we were able to do that, the airlines would be much more interested.

CHAIR —Have you approached the department of transport?

Mr Mundt —For funding assistance?

CHAIR —Yes, or for advice.

Mr Mundt —No, we have not.

Mr SCHULTZ —I am interested in the comments made in this recent document of 10 June about the potential for the development of the RAAF Amberley air base into a joint Air Force and private enterprise service centre. What do you see as the pitfalls to that working successfully?

Mr Mundt —In the discussions we have had to date with the RAAF Amberley air base we have not discussed the opportunity of being involved in a partnership with them. Their role in that project would be merely to identify some land, either on the base or adjacent to the base, in their master planning suitable for such an industrial development. So we did not see them as a joint venture partner, other than that we would be involved in the master planning.

The demand for that development is coming from two areas; firstly, the recent commercialisation of the Air Force, where we see a lot of private enterprise contractors establishing on the site; and, secondly, the expansion of operations at the RAAF Amberley air base. With both of those issues, there has been a demand there for the industries involved in working on aircraft to establish in a cluster. A lot of them want to be near the major contractors to service them. So we have the base commercialising its operations, which brings big contractors such as Boeing, Lockheed Martin and Ball Aerospace to establish on the base. They have a lot of smaller subcontractors who work with them and who would like to establish near them. That is putting demand on our industrial areas in Ipswich. There is an opportunity, given that specific demand, to cluster them in one area where they can feed off each other and more commercially support the air base.

To answer you question on pitfalls, the pitfalls we see are in the negotiations with Amberley air base and in the operating conditions that they put on us between military and civilian personnel mixing, and perhaps going from a private enterprise industrial park into a Defence park to work.

Mr SCHULTZ —Given the concerns raised about security at airports because of possible terrorist activity around the country, how do you see the issue of security? Do you see that as an insurmountable objective in the proposal to move into that base?

Mr Mundt —It is certainly a very serious consideration and it has been a high priority in the discussions we have had with the RAAF base. We do not see it as insurmountable. We think it is possible to have a geographical demarcation between the private industrial precinct and the operations that need to be within the bounds of the Air Force base—to the point where if it becomes necessary to physically shut down the base and isolate the two areas then the defence base can still maintain its integrity and security.

Mr SCHULTZ —How would you see the cost being met of a joint security operation at base level, between private enterprise and the air base itself?

Mr Mundt —If there were a requirement to levy the same type of security on the private enterprise operations, I suggest it would be an impost that they would not be able to bear because it would make them uncompetitive with subcontractors who are established in a normal industrial precinct. So it is something that we would try to minimise in our negotiations with Defence. We would set it up so that there is a physical demarcation and no requirement for such strict security measures.

Mr SCHULTZ —I raise the issue because I would have thought that, given the security worries in the country today, it would have been one of the top priorities to discuss with the air base not only for the security of the nation as a whole but also, and more importantly, for the very point that you just raised—the additional cost to private enterprise of moving into an area and sharing the costs of those security measures.

Mr Mundt —I agree and I can confirm that that has been a major issue in our discussions with the Department of Defence. In the preliminary discussions and in the preliminary master plan, the area of land that they identified is physically not on the base; it is adjacent to the base. So being just outside of the base in what is effectively a noise buffer—

CHAIR —On the eastern or the western side of the airport?

Mr Mundt —It is the main gate entrance to the base, on the southern side of the base, adjacent to the Cunningham Highway. It is close enough to enable a physical link onto the runways for the aircraft that need to be taken off-field and worked on, but there is sufficient geographical demarcation to enable separate security.

Mr ANDREN —Given the potential for greater operational requirements for Amberley—and who knows what the future holds in terms of allies being invited to use the facility and so on—to what degree could you run a scheduled domestic, public terminal alongside one that meets defence needs? If the F111s or the FA18s want to take off, you just hold up the flight and miss your connections?

Mr Mundt —In all our discussions with the defence base, they have been very quick to point out that the No. 1 priority is the defence base and that any commercial operations are secondary to that. They have softened that stance by pointing out that a runway of that size has an enormous amount of free capacity even during some of their major operations, such as Tandem Thrust and Kangaroo II. The number of flights taking off and landing is still well below a commercial airport such as Brisbane. They have tempered that by saying that they believe they could accommodate the number of flights quite easily. Can I qualify that: the actual runway time is only one of the issues. Obviously, if there is an F111 fully loaded with full armament, it has certain safety requirements that would prohibit commercial operations. So, if it were a wartime situation with live ammunition, there is a certain distance within which those jets cannot taxi near commercial jets and things. So that would be a fairly severe limitation on the operations of the commercial base.

CHAIR —Have you done benchmarking against other airports that have RAAF involvement—whether the RAAF is the dominant or the minor partner? For example, Canberra airport has RAAF involvement, but one is on the eastern side of the runway and one is on the western side of the runway, so they are quite separated. Townsville used to, but is Townsville still run by the RAAF or is it run commercially now?

Mr Mundt —I cannot answer that; I do not know.

CHAIR —What about Williamstown?

Mr Mundt —Williamstown is the closest model that we have been working with, and we have anticipated similar conditions to the way they operate.

CHAIR —Do they use aircraft with live ammunition at all?

Mr Mundt —Not that I am aware of.

CHAIR —So that adds a new dimension, doesn't it?

Mr Mundt —Yes, it does.

Mr GIBBONS —Williamtown has the FA18s.

CHAIR —Do they? Well, they would have live ammunition.

Mr GIBBONS —Amberley has the F111s.

Mr Mundt —Again, they point that out as an issue, but they say the frequency of that is not sufficient for it to be a major issue.

CHAIR —Mr Mundt, thank you very much for your evidence and for getting it together quickly. Thanks also to the secretariat for being able to get this submission in. We trust we can return to you if we require additional information.

Proceedings suspended from 12.15 p.m. to 1.31 p.m.