Advocacy Alert: Lower airfares would mean more jobs in North Queensland

An Economic Impact Assessment into regional airfare affordability has found that if Townsville’s airfares were reduced by as little as 10%, 289 more full-time jobs would be created in the region.

Cost, availability and reliability of air travel is a key consideration for North Queensland, which is why Townsville Enterprise commissioned AEC Group to conduct the Economic Impact Assessment (EIA). The report is supporting a formal submission to the Senate Committee inquiry into the ‘Operation, Regulation and Funding of Air Route Service Delivery to Rural, Regional and Remote Communities. The submission is recommending both improved transparency for Townsville’s airfare pricing and reregulation of the Mount Isa to Townsville flight route.

The EIA found that high airfare pricing is a handbrake on North Queensland’s economic growth and that as little as a 10% improvement in flight affordability would provide a significant impact on local jobs creation and annual economic activity through additional inbound visitation. This would be achieved through:

• 289 FTE jobs (including 173 directly employed)
• $57.5 million in output (including $26.0 million in direct activity)
• $30.8 million contribution to Gross Regional Product (GRP) (including $14.0 million in direct activity)
• $16.8 million in incomes and salaries paid to households (including $8.6 million directly)

Of the 558 people that AEC surveyed from Brisbane, Sydney and Melbourne, 95% said they are more likely to travel to Townsville if the airfares decreased by 10%. The EIA confirmed that the cost of regional airfares has been acting as a significant impediment to increased investment, business and tourism to Townsville North Queensland for decades, and now there is proof that its also restricting local job creation.

The cost of regional flights is not only an impediment for tourism, but is also increasing overhead costs for businesses. The cost of air connections is a vitally important component of doing business in regional Australia and the increase in costs is proving unsustainable for our local businesses. Air connectivity is also a significant consideration for individuals and families considering locating outside of major metropolitan centres, with costs and service levels impacting on both the desirability and affordability of lifestyle in regional areas such as North Queensland.

The report also identifies Townsville as the major regional service centre for both North and North Western Queensland, a region which stretches over 900 km to Mount Isa in the West. Rural centres to the west heavily rely upon these services, yet the costs are skyrocketing. A return flight from Townsville to Mount Isa is regularly the same price as an overseas flight from Brisbane to LA. Given the extensive distances, and associated time constraints and safety risks associated with road transport, affordable air travel is critical. Without effective regional air services, the viability and sustainability of these regional communities is substantially impacted. Likewise, the costs and availability of airfares from North Queensland to service these areas on a competitive basis represents a substantial constraint.

The reporting date from the Senate Standing Committees on Rural and Regional Affairs and Transport is expected by 20 September 2018.

Click here to download the North Queensland Air Route Services Economic Impact Assessment and view an extensive library of member only reports and documents.

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