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Brad geatches


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  • 1. Perth AirportRedevelopment & Outlook22 August 2012WA Transport 2012
  • 2. Overview• Background• Aviation Demand Trends & Outlook• Long-term Plans• Redevelopment Update
  • 3. Background3
  • 5. Perth Airport OwnershipShareholders %Utilities Trust of Australia (Hastings) 38.3Australian Infrastructure Fund (Hastings) 29.7Perth Airport Property Fund (Hastings) 17.3The Infrastructure Fund (Hastings) 4.3Australian Super 5.0Officer‟s Superannuation Fund 3.2Colonial First State Private Capital Ltd 2.2Total 100.0• Approx 80% of Perth Airport is held for AustralianSuperannuants
  • 6. Role of Perth Airport• Yes, physical infrastructure: safe/secure reliable customer service value/affordable• Also, a strong aviation development role: Attracting airlines to WA - new routes, more competition =lower fares & more choice6
  • 7. A Capital Intensive Business• Annual Turnover - $350m• Current Debt - $1.2bn:o Bank Debt (3 to 5yrs)o Corporate Bonds (7yrs)o US Private Placement (10-15yrs)• Credit Rating – Moody‟s Baa2, S&P “BBB-”• Value of Shareholder‟s equity - $2bn• Capital Investment next 2 years - $800m7
  • 8. Critical Public Infrastructure• Commercial aviation is critical to WesternAustralians given our geography & demography• Critical to social, health, culture, economics• Life blood of tourism• Critical link in resource sector supply chain (FIFO)8
  • 9. Our Corporate ObjectivesIncrease shareholder value by:• Ensuring our facilities & services are safe & secure for all• Helping our airline & other business partners develop their business• Meeting the needs of our customers• Conducting our business in a commercially astute manner• Identifying & managing risk• Conducting operations in an ecologically sustainable manner• Providing our employees with satisfying employment• Facilitating travel, trade & industry in Western Australia• Ensuring we are a responsible & caring corporate citizen
  • 10. 010203040SYD MEL BNE PERPax(million)Source: BITREFY11 Total Airport PassengersAnnual Passengers - 4 Major Airports3527.52010.6
  • 11. Perth Airport has fully supported WA‟s strongeconomic growth & not constrained activityin any way... 5 yrs to 2011, Perth Airport – 6m additional aircraftseats on way from 7.5m to 12m pax Same period, Sydney - an airport 3.5 times larger -5.99 m additional seats Growth in demand has been extraordinary,unprecedented Perth Airport has enabled this growth safely, reliably &cost effectively11
  • 12. Perth Airport has proven to be highly successfulin its aviation business development role,working closely with the WA Government... In 5 years to 2012: Air service capacity (as measured by seats) hasincreased by 60% Number of international airlines has increased from11 to 16 % of international seats delivered by Low CostCarriers has increased from less than 5% to 33% WA public has substantially greater choice,convenience & lower airfares as air service capacityhas expanded12
  • 13. In 2007 Perth Airport recognised that LCC‟s hadnot discovered Perth – we specifically targetedthem & they came, stimulating a competitiveresponse from other airlines...13
  • 14. Low Cost Carrier growth has deliveredgreater competition & lower fares...14
  • 15. 05001,0001,5002,0002,5003,0003,5004,000198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012TotalInternationalPax(000s)International passenger trend – in recent years thedampening effect of the GFC & strong AUD wasmore than offset by the stimulatory affect ofincreased capacity, driven mainly by LCC growth...Source: BTRE, WAC15
  • 16. 01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012TotalDomesticPax(000s)Source: BTRE, WACDomestic passenger trend – strong Australian & WAeconomies & increased competition in domesticaviation following collapse of Ansett in 2001...16
  • 17. General Aviation Traffic History02550751001251501752002252502753003253503754004254501993199419951996199719981999200020012002200320042005200620072008200920102011Year end 30 JuneLandedtonnes(000s)General Aviation/Charter Activity (indicator of resourceFIFO) doubled between 2005 & 2007, flattened duringGFC, then accelerated over past 2 years...17
  • 18. Perth Airport‟s productivity & efficiency has meant thatwe have contributed to the State‟s competitiveness bykeeping airport charges low – this is particularlyrelevant to the State‟s tourism industry...$-$5.00$10.00$15.00$20.00$25.00$30.00GOLDCOASTPERTHMELBOURNEDARWINADELAIDECAIRNSSYDNEYBRISBANEInternational Charge Comparison FY12Security Airfield &Terminal18
  • 19. Perth Airport -Trend in “Overall Airport Experience” RatingSource: Quality of Service Monitoring results 2006-2011 (ASQs result calibrated to match QSM scale for 2006-2009)2006 2007 2008 2009 2010 2011International DomesticExcellentGoodAveragePoorVery PoorThe only objective measure of service quality aresurveys of statistically relevant numbers of passengersfor the purpose of ACCC annual monitoring ofAustralia‟s large airports ...19
  • 20. • Brisbane „good‟ (4.20)• Perth „good‟ (4.09)• Melbourne „good‟ (4.09)• Adelaide „satisfactory‟ (3.81)• Sydney „satisfactory‟ (3.68)In 2011, survey results undertaken for the ACCCpassengers rated the overall experience at PerthAirport as “Good”...Notwithstanding these results, Perth Airport recognises that thepassenger experience is not what it needs to be in peak periods& airlines rate the facilities poorly – the major airportredevelopment, which is underway, will address these issues 20
  • 21. Private Sector Participation in the WACommercial Aviation Sector (airlines &airports) has underpinned its success21
  • 22. The Role of the Private Sector• Commercial aviation in WA success depends on owners(airports, airlines & other service providers) making timelycapital investments• Other airport ownership models worldwide are proving to beproblematic (poor investment decisions, mountinggovernment debt) – productivity/efficiency are undeniablyimportant22
  • 23. Privatisation of Australian airports has been inthe public interest according to the ProductivityCommission...• Australia‟s 10 largest airports (87% of pax movements) areprivatised, including many regional airports• 14 years & 3 comprehensive reviews by the ProductivityCommission airport privatisation was/is sound public policy –(PC reviews have included global benchmarking of efficiency,levels of service, charges & costs)• By all these measures Australia‟s private airports comparefavourably23
  • 24. Conclusions reached by theProductivity Commission in 2012...• In its review completed this year the Productivity Commission stated:o “Compared to their overseas counterparts Australian airports have achieved:• relatively low aeronautical & non-aeronautical revenue per passenger;• relatively low total cost, operating cost & staff costs;• relatively high profits; and• average to above average capital expenditure per passenger.”• “The productivity of Australian airports has improved while any changes inefficiency or technology have been favourable over the post-privatisation period”• “There is evidence of significant investment in aeronautical infrastructure atAustralian airports in the period since the light-handed monitoring was introducedin 2002, with significant future investment planned. Compared to other Australianinfrastructure, airport investments compare favourably”24
  • 25. Europe...25“the public sector has been slammed for reckless public spendingwhich is contributing to the countrys financial woes after itemerged up to 30 of the 47 state-run airports only deal with100,000 passengers per year” - Travel Mail Reporter 25 May 2012
  • 26. Perth Airport Redevelopment26
  • 27. Perth Airport – Airfield Development Plan• The final Airfield Development Plan is defined & includes three further majorrunway developments:• Extend main runway (03/21) from 3444m to 3800m• Extend cross runway (06/24) from 2163m to 3000m• Construct 3rd runway – 2700m27
  • 28. Perth Airport – Terminal Development Plan28
  • 29. Major Redevelopment Components$200m invested over past 3 years - further $750m underwayWhat $m Start ReadyNew Domestic Terminal 120 Underway December 2012International Arrivals 80 Underway Arrivals – mid 2013International Departures Pier 100 October 2012 Departures – mid 2014Terminal 1 Domestic Pier (Virgin Australia) 190 October 2012 2014Terminal 3 45 Underway 2012Airfield 100 Underway 201329
  • 30. 30
  • 31. New Domestic Terminal ($120m)31
  • 32. Terminal Animation
  • 33. International Arrivals ($80m)35
  • 34. Passengers will be using the transformedinternational arrivals facilities in 12-14 months
  • 35. 37
  • 36. New Pier ($300m)39
  • 37. Source: PAPLThe new $300m pier on the current InternationalTerminal includes additional international gates,departure lounge & international airline loungescomplete & construction tenders will be calledwithin 3 weeksConstruction of the new pier is expected to commence in four months time,and be complete by June 2014 (20 month build)40
  • 38. 41
  • 39. International 1st Floor Departures($30m)47
  • 40. Check-inRetailOCPSecurityUp toDeparturesCheck-in
  • 41. Image 3 – Reconfigured 1st Floor Security Screening Layout
  • 42. Transformed Access(Gateway WA)52
  • 44. Gateway WA Project