Sep 20, 2011

Speech to Australian Aviation Association – 2011 Aviation Outlook Forum

Speech to Australian Aviation Association – 2011 Aviation Outlook Forum

Parliament House, Canberra

The Hon Anthony Albanese MP

Minister for Infrastructure & Transport

Leader of the House

Member for Grayndler

20 September 2011

The skies ahead – responding to the challenges


Hello everyone — and thank you for the invitation to join you this afternoon.

Forums such as these are a terrific opportunity for Ministers and other Members to talk openly with industry representatives outside the usual meeting setting.

The last decade in Australian aviation has been perhaps the most tumultuous of any since the end of the Second World War.

Australian aviation has been exposed to events that have fundamentally changed the operating landscape.

The first of course was the terrorist attacks in the United States on September 11, and almost simultaneously, the collapse of Ansett Airlines.

Since then, the global industry has faced a new security regime, global health scares (SARS and bird flu), a major global economic downturn and the impact of volcanic ash.

Over this period we have also seen extremely volatile global crude oil prices that have placed real pressure on the bottom line.

Most recently, a strong Australian dollar has also made its presence felt.

While that has helped manage the impact of fuel price rises, it makes Australia a more expensive destination for overseas visitors.

Yet, despite these challenges – or perhaps because of them – we have also seen innovation and evolution in air transport.

Australia’s domestic aviation continues to grow and prosper.

The low cost carrier is now firmly embedded in Australia’s flying experience, new aircraft types have been ordered – some have finally arrived, like the A380, and others will arrive soon, like the 787 Dreamliner.

Aircraft such as these deliver real fuel savings and productivity gains, very important as we move to a low carbon future.

Less than a fortnight ago I released the latest domestic aviation figures for the 12 months to the end of June this year.

Our domestic airlines carried nearly 55 million passengers, accumulating just over 63 billion revenue-kilometres – record activity and a clear measure of the strength of the sector.

By 2030, there will be more than twice the current number of passengers travelling through our capital city airports – increasing from around 100 million passengers today to almost 235 million passengers by 2030.

Brisbane is forecast to have the strongest growth, with passenger movements climbing from almost 19 million in 2009 to over 51 million over the next two decades.

Right now, investment in airports is forecast to be $9 billion over the next decade to 2021.

Qantas plans to invest $5.3 billion over the next two years.

While Virgin has future capital commitments of $2 billion.

So while there are big challenges ahead, the aviation sector is strong and its outlook bright.



I can report that in the 18 months since the release of the Aviation White Paper, almost every one of the 134 major policy initiatives has either been fully implemented or is well down the path to completion — with major work undertaken in the priority areas of safety, security and airport planning.

Let me give you a little detail on how we’re progressing with the 13 security initiatives in the White Paper.

We now have more sensible rules for prohibited items, unaccompanied baggage and oversized duty-free liquid purchases.

The Australian Government is supporting this change with $200 million across customs, policing and security agencies to improve Australian transport security.

And I have done my bit.

On August 1st I launched the body scanner trials at Sydney International terminal and I can assure you it didn’t hurt a bit.

Contrary to expectations, passengers were queuing up to try out the new equipment.



In this country, aviation was once all regional.

QANTAS, as you know, started by offering joy rides and air taxi trips.

Today, regional aviation employs some 2,500 people and plays a pivotal role in keeping our regional and remote communities connected to each other and to our major cities.

Flights are more affordable and more people are flying today than ever before.

Most of this growth has occurred on routes that connect cities and major regional towns, particularly towns with thriving tourism sectors, or in the resource-rich areas.



I know that a number of you here today represent the non-commercial general aviation sector.

You have a rich history in this country and you perform an essential role providing services such as charter flights, search and rescue, surveying and aerial photography, aeromedical services and pilot training.

I am also conscious that the general aviation sector is often a starting point for many pilots and maintenance engineers who go on to work in the commercial sector, taking with them invaluable skills and experience.

You also encompass private and recreational flying which is on the increase.

Private flying makes up 13 per cent of overall general aviation activity.

Private aircraft flew some 240,000 hours in 2009, a 4.9 per cent rise on the previous year.

Along with training aircraft, private flying was the only category of general aviation to record an increase.

General aviation is a big contributor to the economy – contributing about $280 million in GDP and employing almost 3,000 people.



It is encouraging to note that there has been an increase in training activity.

But it’s clear the aviation industry needs a well-trained and highly skilled workforce.

I know training arrangements in the past have been complex.

That is why we have expanded the role of the Industry Skills Council to improve training through an Aviation Training Package.

The Skills Council will also help improve coordination between the industry and Registered Training Organisations.

We have made loans available to people who want to take up training in the aviation sector.

This will remove the financial barriers that often stop them from undertaking the training the industry needs.

More generally, the last Budget included significant investment in training and skills development with $1.75 billion over six years to support long term reform of the vocational education and training sector.



I want now to turn to a topic that I know is of particular interest.

And that is the carbon price and the effect it will have on your sector.

The Government has a comprehensive plan to move to a clean energy future and all transport modes will need to play a part in reducing Australia’s carbon emissions.

Central to that is placing a price on carbon pollution.

We understand that this will have some affect on both costs and prices.

Let me assure you that the direct impact will be only a small fraction of world fuel price fluctuations we have seen over the past several years.

In the last decade alone, oil prices have ranged from US$40 to US$130 a barrel.

When the new arrangements are in place, a typical flight from Sydney to Armidale, or Adelaide to Whyalla would involve a carbon price impact from fuel of around a dollar a seat.

Likewise, a flight from Mildura to Melbourne, or Brisbane to Rockhampton, would see an impact of under $2 per seat.

And there will be special assistance for air ambulances and the Royal Flying Doctor Service.



Australians have always been at the forefront or air travel and we can be proud of our achievements.

However, as I’ve said a couple of times — when I took up the role of Minister for Infrastructure and Transport, I inherited an ad hoc ‘wing and a prayer’ attitude to tackling national aviation issues.

Well that’s not how this Government addresses aviation policy.

I am proud to say that the Government has worked with industry and the community, and has taken the hard decisions to ensure a national approach and great future for Australian aviation.

I welcome the role of the Australian Aviation Associations’ Forum as a body to bring together views from across the aviation sector.

You make a most important contribution to the public policy debate.

Thank you.