Chapter 4: Transport—Continued

d) Expanding aviation markets

International air services arrangements

In 2011–12 the Department:

  • held 19 air services negotiations for expanded rights for Australian and foreign international airlines. Negotiations were held with the former Yugoslav Republic of Macedonia, Kuwait, Romania, Timor-Leste, Laos, French Polynesia, Brunei, Macau, New Caledonia, Zambia, Iceland, India, Hong Kong, Japan, Serbia, Papua New Guinea, Indonesia, Switzerland and Scandinavian countries (Norway, Denmark and Sweden), and
  • undertook routine correspondence with other countries on ongoing airline commercial and treaty matters.

Discussions continued with the European Commission on a proposed comprehensive air services agreement with the European Union. The negotiations encompass issues such as market access, protection of the environment, aviation safety and security, and expanding opportunities for airlines to provide a competitive network of air services.

The Department continued to regulate scheduled international air services in accordance with the requirements of the Air Navigation Act 1920 and associated regulations. In 2011–12 the Department granted 300 timetable approvals, 297 timetable variations, eight non-scheduled flight approvals and four approvals for new international airline licences.

Current aviation market

The air services arrangements negotiated by the Department provide capacity entitlements exceeding the current demand, giving airlines the flexibility to deliver air services in a commercially viable way.

In April 2012, 51 international scheduled airlines operated services to and from Australia, including four dedicated freight airlines.

In terms of market uptake, Australia's aviation performance in the year ended April 2012 increased compared with performance in the previous 12 months. Data from BITRE shows that there were 28.8 million passenger movements into and out of Australia, representing growth of 5.2 percent when compared with the previous 12 months. Of the total international passenger movements, 7.9 million passengers were short-term resident departures, an increase of 8.2percent, and 5.9 million passengers were short-term visitor arrivals into Australia, an increase of 0.5 per cent.

Did you know?

The total quantity of freight carried on international flights to and from Australia in 2010–11 was 822,477 tonnes.

Source: Avline 2010–11.

Case Study—International Air Services Negotiations Program

Australia has air services agreements (ASAs) with 79 other economies. The regulatory system which governs international air services was established in 1944. All international flights operate under bilateral ASAs negotiated between governments. There are over 3,500 bilateral ASAs in the world today. In Australia, the Air Services Negotiations Team in the Department's Aviation and Airports Division negotiates and manages Australia's network of ASAs.

ASAs regulate the number of weekly flights airlines can operate on a route and the routes they can use. They also govern airlines' ability to ‘code share’ (an aviation business arrangement where two or more airlines share the same flight), and include safety, security and competition. Each year the Department engages with international counterparts to make new or updated ASAs. Negotiations are generally triggered by requests from an Australian airline to expand its rights, or from a foreign government seeking increased access to the Australian market.

The Department negotiates within the policy set out in the Aviation White Paper and in accordance with mandates agreed by the Minister for Infrastructure and Transport. Australia's negotiating position is informed by the views of stakeholders, such as airlines, airports, tourism bodies and other government agencies, including the Department of Foreign Affairs and Trade. Australia's approach considers the broad impact on the Australian economy, not just on airlines.

In 2011–12, the Australian Government set the Department a target of conducting 10 sets of talks with foreign governments. The Department nearly doubled this target, holding 19 air services negotiations delivering improved market access and commercial opportunities for airlines. Particular highlights included:

  • new ‘open skies’ ASAs with Japan (for many years one of our most restrictive agreements) and Switzerland
  • an inaugural ASA with Laos to complete negotiations with all members of the Association of Southeast Asian Nations, and
  • significantly liberalised arrangements with India and Macau.
Image of international air services

e) Managing airport infrastructure

Management of leased federal airports

The Department oversees the operation of 21 leased federal airports that were privatised between 1997 and 2003 through 50-year leases with options to renew for a further 49 years. The Department ensures that the leases comply with the Airports Act 1996 and associated regulations.

Planning approvals

Under the Airports Act 1996, a master plan must be prepared for every leased federal airport except those at Mt Isa and Tennant Creek. The master plan represents the lessee company's planning and development vision for the airport over a 20-year period. The master plan is reviewed every five years and must be subject to public consultation.

A major development plan is required for each major development at an airport. Section 89 of the Airports Act 1996 defines major developments as including any significant building work or any development with a significant environmental impact on the airport site. The Minister may approve or refuse any master plan, or major development plan.

In 2011–12, the Department provided assessments to the Minister of Infrastructure and Transport, in accordance with the requirements of the Airports Act 1996, on:

  • six airport master plans, and
  • four major development plans.

Assessment was also provided on a variation to an airport master plan and variations to two approved major development plans.

Some of the major development plans were approved subject to conditions about management of impacts and operational considerations. The conditions of ministerial approval attached to each major development plan are available from the Department's website.

At the end of the reporting period, the Department was continuing to assess one airport master plan and one major development plan. Details on each of these statutory planning documents are provided in Appendix G.

Environmental management and building control

Management of the environment at the airport site is the responsibility of the airport lessee. Through the Airports Act 1996 and the Airports (Environment Protection) Regulations 1997, the Department monitors compliance and regulates activities that may have environmental impacts at airports. Through the Airports Act 1996 and the Airports (Building Control) Regulations 1996, the Department monitors compliance and regulates development at the airports.

The Department has appointed Airport Environment Officers and Airport Building Controllers for each of the leased airports to monitor and ensure compliance with environmental and building standards.

Lease compliance reviews

The Department reviews leases of the 21 federal airports annually to ensure compliance. In 2011–12, the Department continued to monitor compliance with obligations under the terms of the head lease, including the requirement to make payments in lieu of land taxes and rates. The Department also assesses the adequacy of airport insurance cover each year, with the assistance of a contracted insurance adviser.

Details of the annual airport lease review meetings and the insurance review for 2011–12 are provided in Appendix G.

Slot management at Sydney Airport

The Department oversees the slot management at Sydney Airport under the Sydney Airport Demand Management Act 1997. The objectives of the regime are to:

  • provide an effective means of administering the movement limit
  • alleviate delays caused by congestion
  • safeguard access for regional airlines
  • provide equal access to slots for new entrants, and
  • spread aircraft movements more evenly within hours.

The Department is working with relevant industry stakeholders to develop amendments to the Slot Management Scheme 1998 and the Determination of Sydney Airport Compliance Scheme 1998, to ensure the continued efficiency and effectiveness of this program. In addition, the Department is working with Airservices Australia and an industry working group to develop methods to improve monitoring, reporting and compliance with the maximum movement limit at Sydney Airport.

The Department is monitoring administrative reporting on the extent to which the objectives of the schemes are being addressed, in accordance with performance measures identified in Table 4.13. The Department is satisfied that the objectives of the Schemes are being met.

Did you know?

There were a total of 309,918 aircraft movements at Sydney Airport in 2010–11.

Source: Avline 2010–11.

Table 4.13 Objectives and performance measures of the Sydney Airport Slot Management Legislative Regime

Objective Performance measures
Provide an effective means of administering the movement limit. Reports from Airservices Australia on movement Limits.

Monitoring of compliance with allocated slots through the Sydney Airport Compliance Committee.

Annual performance reviews of the Slot Manager.

Implementation of the Industry Working Group report on options to improve monitoring, reporting and compliance with the maximum movement limit.
Alleviate delays caused by congestion. Statistics of on-time performance of all services since implementation of the scheme.
Safeguard access for regional airlines. Statistics of weekly runway movements showing the share of slots allocated to regional operators.
Provide equal access to slots for new entrants. Reporting on airlines that have requested slots or commenced operations.
Spread aircraft movements more evenly within hours. Graphed statistics of aircraft movements for each 60 minutes across the busiest operational hours at Sydney Airport.
Reimbursement of parking fines

Eight leased federal airports (Brisbane, Gold Coast, Hobart, Launceston, Melbourne, Perth, Sydney and Townsville) participate in the Parking Infringement Notices Scheme (PINS). The airports administer the vehicle control regime in accordance with the Airports (Control of On-Airport Activities) Regulations 1997. Revenue collected by the airports for parking offences is remitted to the Australian Government and airports are reimbursed, up to a set maximum amount, to partially offset their costs in administering the scheme.

The Department holds biannual PINS stakeholder meetings to improve communication and relations with the participating airports. The next meeting is scheduled for November 2012.

Amelioration of the environmental impacts of aircraft movements
Noise amelioration programs

The Department has administered noise amelioration programs at Adelaide and Sydney airports, providing funds to install noise insulation for eligible residences and public buildings under major flight paths. The program for Sydney Airport was completed in January 2010.

In Adelaide, two additional churches were identified as being eligible for funding as public buildings and insulation work was completed in early 2012.The Department monitors and maps the noise contours in Sydney and Adelaide annually.

Curfews

To minimise the impact of night-time noise on nearby communities, restrictions on aircraft movements are applied, through legislated curfews, at Adelaide, Essendon, Gold Coast and Sydney airports. The curfews, which operate between 11pm and 6am, limit the number and type of aircraft that can operate and stipulate which runways can be used.

In 2011–12, the Department:

  • assessed 61 applications for curfew dispensations—18 for Adelaide, four for Gold Coast (Coolangatta), one for Essendon and 38 for Sydney, and
  • approved 28 curfew dispensations—12 for Adelaide and 16 for Sydney.
International cooperation on noise and climate change

The Department developed a draft International Civil Aviation Organization (ICAO) climate change action plan in response to agreements reached at the ICAO Assembly in October 2010. The draft plan involved collaboration with industry and relevant government agencies.

Australia is helping the ICAO Secretariat to accelerate its work program to develop a global sectoral agreement on climate change action for international aviation. Australia is an active member of a small ICAO Council Adhoc Working Group that refines options for a global market-based measure for managing international aviation carbon emissions.

The Department continued to participate in the ICAO Committee on Aviation Environmental Protection (CAEP) and attended the CAEP Steering Group meeting held in Beijing in September 2011. The current focus of CAEP work is for an aircraft CO2 standard and possible increased noise stringency for aircraft.

Community resources

The Department continued secretariat support to the Sydney Airport Community Forum. The forum is a consultative committee composed of federal, state and local governments, and community representatives, which considers aircraft noise issues affecting communities.

The Department continued to refine its Transparent Noise Information Package, a software tool that enables non-specialists to better understand aircraft noise exposure patterns and aircraft carbon emissions. The package is available free from the Department's website.

Management of properties at Badgerys Creek

The Australian Government owns and leases commercial and residential properties on a site at Badgerys Creek, NSW, originally acquired for a proposed second major airport for Sydney. The Department administered the leases during 2011–12 to ensure the Australian Government met its obligations as a landlord.

National Airports Safeguarding Advisory Group

The Government's 2009 Aviation White Paper proposed a national land use planning framework that would:

  • improve community amenity by minimising aircraft noise-sensitive developments near airports, including using additional noise metrics and improved noise-disclosure mechanisms, and
  • improve safety outcomes by ensuring aviation safety requirements are recognised in land-use planning decisions through guidelines being adopted by jurisdictions on various safety-related issues.

The National Airports Safeguarding Advisory Group, comprising federal, state and territory government planning and transport officials, the Australian Government Department of Defence, CASA, Airservices Australia and the Australian Local Government Association, developed the National Airports Safeguarding Framework.

Federal, state and territory ministers agreed the Framework at the Standing Council on Transport and Infrastructure (SCOTI) meeting on 18 May 2012. A copy of the Framework can be found at: www.infrastructure.gov.au/aviation/environmental/nasf/index.aspx.

The framework covers safety issues including airspace protection, wildlife management, wind turbine safety, lighting, and building-induced windshear. It also covers amenity issues that could arise when noise-sensitive land uses are approved too close to airports or under flight paths.

The aircraft noise component of the framework is to be an interim guide for state and local level strategic planners.

f) Supporting sustainable development

During 2011–12, the Remote Air Services Subsidy (RASS) Scheme subsidised weekly flights to 255 remote communities.

Contracts are in place for 38 aerodromes at remote Indigenous communities to receive upgrades to the higher regular public transport aviation safety standard. These airstrips support RASS services as well as those from health-related services such as the Royal Flying Doctor Service.

g) Economic regulation of airports

The Productivity Commission inquired into the economic regulation of Australian airports in 2011. The Commission's final report and the response by the Australian Government were released in March 2012. The report found that the current approach to airport economic regulation strikes an effective balance between maintaining scrutiny over major airports to ensure they use their market position appropriately, while providing the regulatory certainty necessary for continued private sector investment in airport infrastructure. The Commission recommended the regime be continued, subject to further review in 2018.

In particular, the Commission recommended that quality of service monitoring continue, with objective criteria to be reviewed in 2012–13. The Department will work with the Australian Competition and Consumer Commission to undertake this review. The Productivity Commission recommended that price and quality of service monitoring continue for Brisbane, Melbourne, Perth and Sydney airports, but not for Adelaide Airport. The Department will prepare regulatory amendments in 2012–13 to give effect to this recommendation.

Airport tripartite deeds

Tripartite deeds are agreements between the Australian Government, airport lessee companies and their senior financiers (such as major banks) to cover the rights and responsibilities of each party in the event of the Australian Government terminating an airport lease. The deeds give financiers an opportunity to remedy potential or actual defaults by lessees before a lease can be terminated, and give financiers the capacity to recover some of their funds, as they oblige the Australian Government to consider potential financial compensation if, under a limited set of defined circumstances, it chooses to terminate the airport lease.

The deeds were initially offered for 20 years at the time of airport privatisation, to help secure financing for the airports in view of the novel leasehold arrangement. The Australian Government decided in May 2011 to extend tripartite deeds for the life of the lease for the 12 airports with existing deeds. In April 2012 the Australian Government decided to also offer tripartite deeds to the nine, under the Airports Act, airports which did not have this facility—Archerfield, Camden, Essendon, Hobart, Jandakot, Tennant Creek, Moorabbin, Mount Isa, and Parafield. Perth Airport's tripartite deed extension was executed on 25 June 2012. Negotiation with other airports continued into 2012–13.

Did you know?

Aircraft movements at Sydney Airport in 2010–11 increased by 3.5 per cent compared to 2009–10; noise complaints increased by 151.7 per cent in the same period, to 30,166.

Source: Avline 2010–11.

Case Study—Joint Study on aviation capacity in the Sydney region

Aviation services are critical to Australia's economic productivity and prosperity. Sydney (Kingsford-Smith) Airport is Australia's most important domestic and international airport. It is the main passenger gateway to Australia, with over 40 per cent of international passenger arrivals and departures, and 50 per cent of international air freight tonnage.

In 2009 the Australian and NSW governments set up a joint study, overseen by an independent steering committee, to examine the aviation capacity needs of the Sydney region.

After two years of investigation and analysis, the Joint Study on Aviation Capacity in the Sydney Region was published in March 2012.

This was the most comprehensive and authoritative study undertaken of future aviation and infrastructure needs of the Sydney region. It combined examining those needs along with road congestion, land-use planning and economic development requirements. It also set out the contribution that aviation makes to the economy and jobs, and put a cost on looming congestion.

The 440-page report and 2,800 pages of technical analysis made it clear that Sydney's existing airport cannot cope with future demand. Sydney (Kingsford-Smith) Airport is significantly constrained by factors including runway and airport apron limitations, very limited scope for expansion, and increasing congestion of road and rail links around the airport.

These capacity constraints will progressively worsen in the next few years, and limit growth of the NSW and national economies. If action is not taken to meet Sydney's future aviation demand, nearly 78,000 jobs and $34 billion in gross domestic product will be foregone and significant opportunities will be lost over coming decades. Much of the lost opportunity for economic activity will be in Sydney's western growth areas.

In May 2012 the Australian Government committed to a three-part strategy to:

  • optimise the airport's operation and capacity and address surrounding road and rail congestion
  • protect and arrange better use of other airports in the region, and
  • establish a supplementary airport to handle longer-term demand beyond Sydney (Kingsford-Smith) Airport's capability.

The Australian Government authorised analysis of the Royal Australian Air Force base at Richmond and of the Wilton area to determine the feasibility of airline operations to supplement Sydney (Kingsford-Smith) Airport and serve Sydney's growing western region. The analysis will be complete by mid 2013.

Image of aviation capacity in Sydney region

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Last Updated: 17 November, 2014