MARKET ANALYSIS AVIATION - AUSTRALIA - Danish Aviation Group

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

MARKET ANALYSIS AVIATION - AUSTRALIA

AUGUST 2017
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

INTRODUCTION
The general aviation in Australia is characterised by large distances and the fact that
Australia is an Island making more than 90% of visitors to come by air.

Due to the large distances between the territory capital citities there is a very effectice
regional service in Australia. In the years to come all of the airports in the Australian capital
territory cities are expecting large growth rates in passengers per years.

The total forecasted passenger movements will increase significantly from 2016 with 155
million passengers up to 279 millions in 2031. This in turn, puts a lot of pressure on the
existing airports as well as support the building of a new Western Sydney Airport set to be
operating in 2026.
Besides domestic tourists and international travel to Australia, other key drivers of the
sector includes price of crude oil and the real household income.

The domestic airline industry have during the last few years been characterized by strong
price competition between the two big carriers Virgin and Qantas.

All airlines operating in Australia have an air operator´s certificate, which is issued by the
Civil Aviation Safety Authority (CASA) as the government body.

Source: Research Report 133, Aviation, Bureau of Infrastructure, Transport and Regional Economics.

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

HISTORIC PASSENGER MOVEMENTS
From 2002 to 2016 the total number og passengers travelling in and out of australian
airports have experienced a doubling of passengers from 80 million to almost 160 million by
the end of 2016.

                                           Total passenger movements 1985-2016 - Australia

                                     180
   Number of passengers (millions)

                                     160

                                     140

                                     120

                                     100

                                      80

                                      60

                                      40

                                      20

                                       0

Source: Airport Traffic Data 1985-2016, Aviation, Department of Infrastructure and Regional Economics.

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

  TOP 10 BUSIEST AIRPORTS IN AUSTRALIA
                                    45

                                    40
   Passengers per year (millions)

                                    35

                                    30

                                    25

                                    20

                                    15

                                    10

                                    5

                                    0

Source: Airport Traffic Data, January 2017. Bureau of Infrastructure, Transport and Regional Economics

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

LARGEST AIRLINES IN AUSTRALIA
The biggest airlines operating in Australia measured by number of passengers moved
is Qantas Group and Virgin Australia who dominates the domestic market. Both of
them have bought smaller airlines to retain big market shares as seen below*.

     Fleet size: 124                                                             Fleet size: 110

     Destinations: 85                                                            Destinations: 54

     Discount carrier: Jetstar                                                   Discount carrier: Tigerair

     Qantas domestic market share:39%                                            Virgin domestic market share: 30%

     Jetstar domestc market share: 20%                                           Tigerair domestc market share: 6%

     Total domestic market share: 59%                                            Total domestic market share: 36%

Sources: Planespotters.net, qantas.com, virginaustralia.com
*Data from 2016: www.anna.aero/2016/10/20/qantas-is-averaging-30-percent-passenger-share-in-its-top-international-markets/

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

REGIONAL AIRLINES IN AUSTRALIA
Both Qantas and Virgin operate regionally but many other airlines fly in Australia.

                      Top 10 regional airlines excluding Qantas and Virgin
    Operator                            Main hub           Founded   No. Of aircrafts   Destinations
    Regional Express Airlines
                                        Sydney, NSW        2002      52                 54
    (REX)

    Fly Tiwi                            Darwin, NT         2008      30                 9

    Airlines of Tasmania                Hobart, Tasmania   1978      19                 2

    Sharp Airlines                      Hamilton, VIC      1990      14                 9

    Air North                           Darwin, NT         1977      13                 22

    Seair Pacific                       Gold Coast, QLD    1985      11                 7

    West Wing Aviation                  Townsville, QLD    2000      8                  14

    Maroomba airlines                   Perth, WA          1985      7

    Hinterland Aviation                 Cairns, QLD        1984      7                  11

    Fly Corporate                       Brisbane, QLD      2016      5                  8

Sources: Planespotters.net, airfleets.net

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

AIRPORTS IN AUSTRALIA
Over the past five years airports in Australia have seen an expansion. This expansion is highly
concetrated around the capital cities especially Sydey, Melbourne and Brisbane.

The expansion is highly due to the rising number of visitors from Asia and an increase in low-cost
international airlines.

One of the main issues due to the rising passenger movements is congestion around the big
airports which have become a major issue. This issue has in part led to big projected investments
in many of the biggest airports across Austraila

Sources: IBISWorld, Report I5220, December 2016.

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

CURRENT AND FUTURE PROJECTS
Sydney
Sydney airport is looking to expand and redevelop significantly in the future. This is mainly due to
the rapid growth from Chinese and North Asian passengers by 23% as well as a solid domestic
growth of 3.8%. The airport is undertaking more than 200 capacity projects which are expected to
increase the number of jobs by 200,000 by 2034. The projects include expansion of T1, improved
access to the airport as well as greater focus on premium passengers and more hotel capacity.
Sydney Airport are looking at new designs, best-practices, smart technology solutions and other
valuable knowledge to apply to their expansion. Furthermore, they are focused on waste
management creating opportunities for Danish suppliers.
New Western Sydney Airport will be build by the Australian government. The airport is expected to
generate around 20,000 direct and indirect jobs by the early 2030s. As the airport grows, more
jobs will be generated. The Western Sydney Airport will begin operations in 2026.

Melbourne
The second biggest airport in Austraila, Melbourne Airport, is working on a 20 year plan and are
set to invest up to $10 billion in that period. This includes a multi-level transport interchange, new
aircraft bases, a new security screening area, new entrance to the airport, a new T4 terminal that
are currently home to the airlines of Jetstar, Tigerair and REX. Besides this, they are looking to
reduce the airports total emission by up to 30 percent.
A new $7-billion proposal for a new commercial airport in the South-East with an estimated size of
the airport of Canberra with roughly 2.8 million passengers per year.

Sources: Westernsydneyairport.gov.au, sydneyairport.com.au, Melbourneairport.com.au

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

CURRENT AND FUTURE PROJECTS
Brisbane
Brisbane Airport (BNE) is investing $3.8 billion over the next decade to both develop as well as
expand the airport. The investments include both airside, landside, terminals, building projects,
hotels and a new runway. BNE aim to more than double number of passengers, jobs and
investment in the coming 20 years. The biggest project is set to be Brisbane´s new runway
opening in 2020 running parallel to the existing runway and will be 3.3km long and 60m wide.
Perth
The western airport of Forrestfield-Airport Link in Perth together with the State Government have
several investment plansm and are looking to expand the infrastructure needed to meet the
increased demand from passengers. A total of $2 billion will be invested in construction of rails,
tunnels, stations and other associated infrastructure.
Adelaide
Australias fifth largest airport have big plans of expanding the current airport. A total of up to $1
billion expansion plan for Adelaide Airport have been approved by the Federal Government in
2015. Three major projects will be undertaken: Terminal expansion, expansion of the international
arrival halls and additional arrival gates. Managing Director of Adeliade Airport, Mark Young,
expects the investments to grow up to 38,000 jobs within the 20-year forecast.

Sources: Brisbane Airport, bne.com.au. Major Development Plan, Forrestfield-Airport Link. Adelaide Airport´s $billion expansion, Adelaidenow.com.au, January
2015.

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

CURRENT AND FUTURE PROJECTS
Newcastle
Newcastle Internatiol Airport have recently revealed plans of big investment projects.
The airport is planning a big extension to its existing immigration area, with the aim of speeding
up the arrival process for passengers travelling from Asia. A total investment of up to $5 million.
Besides the immigration area, the airport is seeking permission from the Newcastle City Council to
extend its passenger departure lounge. The total investments should amount to $30 million over
the next few years also including a new radar system and improved digital signage in the check-in
areas.
A new masterplan has also outlines the airport´s developement plads up to 2030 and are looking
at increasing the number of jobs associated with the airport from its current 7.800 to 10.000 by
2030

Source: www.newcastleairport.com

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