SENATOR THE HON SIMON BIRMINGHAM
Minister for Trade, Tourism and Investment
Deputy Leader of the Government in the Senate
Senator for South Australia
World Routes Aviation Conference, Adelaide
22 September 2019
Good morning and welcome to Adelaide and my home state of South Australia.
I hope and trust you’re enjoying your stay here. I might be a little biased being a native South Australian, but I do hope you get the opportunity to experience some of the fine food and wine that our state is renowned for, and maybe even the opportunity to get out to some of our world-class wine regions.
It’s great to be with you at one of the largest aviation conferences in the world, and one of the most significant annual events for the aviation industry, whether you are from one of the 200 airlines, 350 airports, or many other organisations that are represented here.
I know it’s a very important conference for you, as a member of the industry to engage in discussions around exploring opportunities for new air routes or expanding capacity on existing routes.
As Australia’s Tourism Minister, I understand how important aviation access and capacity is, and for Australia we see this conference as a huge opportunity for us to demonstrate to you that our country is a destination worth investing in.
That’s why Australia has its largest ever presence at a World Routes event, with our Federal, State and Territory, and Regional Tourism Organisations and airports all in attendance under the Team Australia umbrella with the aim of both strengthening existing partnerships and forging new ones.
As an island nation, and a country that is far away from many parts of the world, air access is absolutely critical for Australia.
Critical in terms of exporting local produce and Australian made products to other markets and also critical in driving our $143 billion tourism industry – an industry that directly employs around 1 in 13 Australians, accounting for almost 10 per cent of our exports and that is a key driver of our economy.
The ongoing success of our tourism industry hinges on the growth of air services, new routes and connectivity. Currently there are around 60 international airlines and 1,929 international flights into Australia per week, equating to 27 million seats.
In 2009, we set a goal of increasing international aviation capacity to Australia by 50 per cent to 26 million annual inbound seats in total. This target was met four years early, however we need to continue to work hard to ensure aviation capacity increases ahead of demand.
Despite this strong growth, the industry both in Australia and globally is undoubtedly facing some headwinds. We know global aviation growth has slowed to around 3.6 per cent, Australia is a little higher at 4.2 per cent.
It is very much a team effort to continue to boost aviation growth. Our government continues to work with our airports as well as airlines to support them and their services – because getting more passengers on seats is everybody’s interests and most importantly in the interests of our tourism industry.
That’s why Australia’s dedicated marketing agency Tourism Australia has worked with 17 airlines in the last year and maintains memoranda of understandings (MoUs) with eight airlines, most recently re-signing a three-year MoU with Singapore Airlines.
Our partnerships with airlines have enabled the success that we enjoy today in hosting 8.4 million visitors in Australia each year and it is why we continue to value our airline partners as key to our business plans.
Since the start of this year we’ve supported some significant new routes, including:
- Qantas’ new Brisbane to Chicago and Brisbane to San Francisco service commencing April 2020;
- ANA’s daily Tokyo (Narita) to Perth service which commenced 1 September 2019;
And just a few weeks ago we had another major win with the announcement that the number of flights that can operate between Australia and Tokyo Haneda Airport will triple after Australia and Japan expanded their air services arrangements.
Japan is one of our most important tourism markets, with Japanese visitors spending $2 billion in Australia in the last year. It is our fifth largest market for visitation and spend.
Japan is also a great case study demonstrating the known link between aviation capacity increases and increases in international inbound tourism. Over the past five years Australia has secured six new air routes from Japan which has led to growth in inbound tourism numbers following some years of decline.
The new Haneda slots, which come off the back of ANA’s inaugural Tokyo to Perth flight, will pave the way for a significant boost to two-way traffic between our countries, helping to drive further growth.
In addition to these partnerships, Australia now has ‘open skies’ agreements with New Zealand, China, Japan, Singapore, the USA, the UK and India. These deals have done wonders for airline passengers and for tourism by providing more flight options, allowing competition to flourish and helping ensure more competitive fares.
India, which Australia has an open skies agreement with, is one market that presents huge future opportunities for Australia’s tourism industry but also for airlines and airports in both countries.
We’ve seen huge growth in arrivals from India. India has now recorded five consecutive years of double-digit growth in both arrivals and spend. To the year ending March 2019 arrivals reached a high of 342 000 representing a 15 per cent increase in the last 12 months alone.
Some projections, estimate the number of Indian visitors to Australia is expected to grow to around 1 million by 2030.
However, India’s growth in arrivals has not been matched with direct aviation services from India. Currently, Air India is the only direct flight provider, with eight flights to New Delhi per week.
That means 90 per cent of Indian visitors fly to Australia via South-East Asia on Singapore Airlines, Malaysia Airlines, Thai Airways, Cathay Pacific, among other carriers.
This demonstrates there is huge room improvement, particularly in terms of greater direct services. Sydney Airport identifies India as its most underserviced market, with five of its 16 underserviced cities located in India.
Having to come via another country can add time and cost to the Australian travel journey, creating a disincentive for potential visitors.
More direct flights would enable Indian travellers, in both business and leisure markets, to access Australia with greater ease and would makes us more competitive when potential travellers are considering where they might travel to.
But carriers shouldn’t just think of our major gateways of Sydney and Melbourne. Why fly over Perth, Adelaide or Darwin when each of them are amazing gateways into Australia that are closer to India.
Based on the projected increases in tourism numbers from India to 2030, to meet this demand, there will need to be growth of approximately 60 000 additional seats per year on average, over the next decade.
That is the equivalent to around an extra 250 direct flights per year, or five extra flights per week.
There is no doubt the Indian tourism market presents huge opportunities for airlines and airports in both Australian and India, and now is the time for us to all work together to better improve connectivity.
As a Government, we are very focused on the demand side. Tourism Australia continues to invest heavily in the Indian market through a range of consumer marketing, industry partnerships, trade events, PR activities and aviation attraction activities.
For example, last month I announced $5 million in additional funding to market the upcoming Women’s and Men’s T20 World Cup to be hosted in Australia in 2020 to travellers in India.
And last year, I launched the UnDiscover campaign. This campaign specifically targets high value travellers in India and aims to challenge the perceptions and stereotypes of what Australia offers as a tourism destination by showcasing unusual, unfamiliar and unexpected attractions and experiences – many of these in regional destinations.
When we look at what the future of aviation holds for Australia, there are many exciting opportunities such as India, but also other major developments which will help to drive further growth in this sector.
Looking first to our major gateways – here in Adelaide, you may have noticed that the airport is expanding its main terminal to significantly upgrade the international arrivals and departures experience, resulting in an 80 per cent increase in the overall size of the terminal’s retail and dining precinct across domestic and international areas.
One million international passengers passed through Adelaide airport in the last year, up 5.9 per cent on last year, so it is critical that we continue to expand our capacity and infrastructure to drive and cater for international demand.
In Sydney, construction of the city’s second international airport, Western Sydney Airport, began this time last year. The Australian Government is investing up to $5.3 billion to deliver this project and once completed in 2026, it will provide much needed additional capacity for the Sydney and surrounds catchment for both passengers and freight.
In Queensland, Brisbane Airport is also scheduled to officially open its new runway in July 2020.
However, while it is critical that we continue to improve and expand our gateways to accommodate growth, we must also look beyond these gateways and invest in infrastructure in key regional destinations so that they too can accommodate international visitation and importantly, encourage the dispersal of visitors all around the country.
Regional dispersal is recognised by the government as being key to ensuring a sustainable tourism industry. And pleasingly there is a lot of exciting aviation developments underway in regional Australia.
Queensland’s Gold Coast airport will welcome new flights from South Korea in December 2019 operated by Jetstar. This is the first Australian carrier in more than a decade to fly to South Korea, and complements the current expansion project that is underway to upgrade facilities and double the footprint of their existing terminal.
Further north at Queensland’s Sunshine Coast Airport, the construction of the new runway commenced in March 2019 and is scheduled for completion in late 2020, enabling the airport to service larger aircrafts and allow for flights from more destinations national and globally.
In Western Australia, Broome International Airport has benefited from two years of seasonal flights from Singapore operated by Silk Air in 2018 and 2019, which is the state’s second most valuable tourism market.
And I’m pleased to announce that tomorrow, at this World Routes conference, the Northern Territory’s Darwin Airport will be signing a new MoU with Haikou Meilan International Airport (Hainan, China), outlining both party’s commitment to work together to develop air services between the two sister cities.
This announcement comes off the back of Darwin establishing its first direct air services from mainland China operated by Donhai Airlines in Shenzen mid last year.
To ensure this growth continues across our regional areas, the Australian government has committed up to $100 million to upgrade regional airports across Australia. We want more people – especially families and small businesses – moving to and staying in the regions, and better connectivity through airports is a vital part of that plan.
Furthermore, an additional six domestic airports have become designated international airports, with Hobart, Newcastle, Avalon, Canberra and Townsville either already servicing international flights or will be ready to do so in the near future.
With all of the improvements in supply side developments across Australia, Tourism Australia will continue to work hard to build tourism demand from key international tourism markets.
Targeted tourism marketing plays an important role in supporting new routes. Last year, as I mentioned earlier, Tourism Australia launched its Undiscover Australia campaign in Indonesia, India, Singapore and Malaysia. This was the first time the South and South East Asia region has been targeted as part of a single, coordinated tourism promotion.
We’re also starting to see the dividends in terms of increased visitation from the USA, off the back of our successful Dundee campaign.
In wrapping up, I hope this has been useful in demonstrating why Australia is a destination that is worthwhile investing in and I very much hope that Australia is front of mind in your discussions over the next few days.
I want to once again welcome you to Australia, hope you enjoy your time here, and I trust this event will be productive for you and the organisations you represent.