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ROCKHAMPTON AIRPORT

AVIATION BUSINESS DEVELOPMENT AND MARKET RESEARCH REPORT

6 AUGUST 2014 REPORT TO THE BUSINESS ENTERPRISE COMMITTEE OF ROCKHAMPTON REGIONAL COUNCIL

2 ROCKHAMPTON AIRPORT / BUSINESS DEVELOPMENT & RESEARCH DRAFT REPORT 11569r01 06/08/2014

Aims and objectives

Methodology

Research results

Analysis

Recommendations

Outcomes

Airline business case summary

CONTENTS INTRODUCTION

OVERALL AIM OF THE PROJECT The economic development of the Rockhampton region though increased air services and associated resources industry activity.


Workshop & Airline

Business Case

Aviation Environment

Consumer demand

Business demand

Three broad factors deliver growth in air services:

1. Increased local catchment demand

2. Increased demand from visitors to the region

3. A step-change in the aviation offer to consumers

DRIVERS OF GROWTH AND PROJECT METHODOLOGY METHODOLOGY

METHODOLOGY


PROJECT PLAN METHODOLOGY

Outcomes-focused methodology: scoping workshop first

Qualitative research next – resources drive the demand –

what do they want from air travel

Quantitative research last – gather the consumer and

business data

Workshop the data streams, SWOT and identify

Rockhampton’s USPs

Develop the airline business case and strategies to engage

resource companies.


Airbiz built a business case to airlines, targeted to the outcomes specified by Council, based on the research conducted.

The post-research workshop concluded that a market was demonstrated for direct services to Sydney and Townsville.

Townsville presented the stronger business case with more strategic benefits for Rockhampton Airport.

AIRLINE BUSINESS PLAN METHODOLOGY METHODOLOGY

Airline business case

Demand: Consumers

Passenger

Business

Quantitative: local business usage

Qualitative: resource industry

drivers

Supply: aviation

Capacity

Operational considerations

Strategic fit

Outcome Inputs


RESEARCH RESULTS SUMMARY RESEARCH

Qualitative Galilee Basin Proponents (5)

Export labour market is the best opportunity.

Collaborative approach with other centres; flying under

the radar; “optimum” dormitory town

Gracemere: Target large, regional/national supply

chain, secondary and tertiary industries

Regional aviation hub aspirations are currently

unrealistic.

Business survey (263) Larger businesses and resource

industry fly more. Good to encourage those groups.

Strongest demand for services to SYD/MEL, then

CNS/TSV.

Limited appeal for direct MOV/EMD/NTL.

Galilee: strong interest in serving the needs of the

Basin.

Gracemere: limited demand from local SMEs.

Passenger survey (1058) Pax are roughly half and half, locals vs visitors. Most travel for business.

Profile = regional airport /business focus.

FIFO/DIDOs =1 in 6 of all pax.

Locals travel for all reasons; Visitors = business / VFR.

SYD/MEL/TSV are the most popular new, direct routes.

Research key findings


SUMMARY OF QUALITATIVE DEVELOPMENT CONCEPTS QUALITATIVE RESEARCH

Concept 1. Ground-based logistics hub

Some appeal to southern

proponents

But contractors and supply chain will

drive the decision to locate, not the

resources proponents

Concept 2. Outbound FIFO labour

source market

Appeal to most proponents,

dependent on their workforce planning

Skills in underground mining are a

particular motivator

Concept 3. Aviation hub

No appeal, risk perceived around connecting flights

versus single point-to-point flight


Population

Economy

Infrastructure

Lifestyle

CONCEPT 2: WORKFORCE BASE REQUIREMENTS QUALITATIVE RESEARCH

NECESSARY Population with critical mass to support FIFO Affordable housing Capacity for growth Aviation capability (regional base, hangars, MRO) Political will Local support

DESIRABLE Attractive lifestyle/ education /partner employment Existing skill base Training and recruitment providers Affordable/ flexible labour Hub export potential


CONCEPT 2: OUTBOUND FIFO LABOUR SOURCE MARKET QUALITATIVE RESEARCH

Proponent C: POTENTIAL • Interested in skill base. •Rockhampton is the “optimum”

FIFO residence •no one region will be single source

workforce base •Regions should co-operate

Proponent B: SOME POTENTIAL •Planning regional recruitment,

North/South Qld split •Would consider CQ, Need a pod-

like no./crew to generate a flight. •Charter flying likely

Proponent E: LONG SHOT •Refused to name regional city

source markets. •Economic benefits to regions, flow

through etc. •Will engage with stakeholders as

the project progresses

Proponent D: POTENTIAL • Interested in skill base • Interested in regional workforce,

regions need to be pragmatic. •Will have SEQ base and CQ base –

could be ROK/GLT/MKY •Ready to talk to RRC after FID

Proponent A: LONG SHOT •Brisbane hub, Contractor will drive

recruitment policy •Economic benefits flow through,

local industry participation plan •Register with ICN (industry

capabilities network)


Male, 54% Female, 46%

GENDER

12%

20% 18% 22%

18%

18-24 25-34 35-44 45-54 55-64

AGE

NB: Gender and age are based on unweighted data

LOCALS (n=488)

VISITORS (n=570)

GENDER: Male Female

46.5% 53.5%

61% 39%

AGE: 18-24 25-34 35-44 45-54 55-64 65 or older

14% 13% 19% 20% 21% 13%

11% 26% 17% 23% 16% 8%

= statistically significant

FIFO 12%

DIDO 4%

Working, but not

FIFO/DIDO

68%

Not working

16%

FIFO/ DIDO – ALL DEPARTING PAX.

DEMOGRAPHIC PROFILE PASSENGER RESEARCH


AMONGST THOSE WHO WORK

TOTAL LOCALS (N=383)

VISITORS (N=498)

FIFO 14% 7% 19%

DIDO 5% 8% 3%

Neither 81% 85% 78%

EMPLOYMENT AND FIFO/DIDO PASSENGER RESEARCH

Working full time

75%

Working part time

9%

Student 3%

Home duties/ not

working 4%

Retired 9% EMPLOYMENT SUMMARY

Base: Total weighted sample (n=1,058)

DISTANCE FROM HOME TO WORK (DOOR TO DOOR)

5%

24%

5%

20%

47%

1%

14%

3%

19%

62%

Other

> 100 km

50-100 km

20-50 km

< 20 km

Locals VisitorsBase: Full time/ part time workers (n=887)

DISTANCE FROM HOME TO WORK

> 100 KM (N=173)

Car/ motorbike 25%

Bus/ train 1%

Plane 75%

TRANSPORT TO WORK


PASSENGER MIX PASSENGER RESEARCH

“Do you live in Central Queensland or were you visiting the area?”

Rockhampton RC 31%

Gladstone RC 1%

Livingstone RC

14%

Visitor 54%

Locals – 46% Visitors – 54%

4%

24%

65%

4%

2%

Overseas

Interstate

Other Queensland

Other Central QLD

Emerald/ Central Highlands

“Where do you live?”

Base: Visitor sample (n=570)

100%

11%

99%

56% 48%

89%

44% 52%

97% 100% 100%

CONSIDER ROK AIRPORT TO BE LOCAL AIRPORT

Base: Total 2014 weighted sample (n=1,058)


PURPOSE OF TRAVEL PASSENGER RESEARCH

1%

1%

1%

2%

8%

25%

62%

1%

1%

1%

11%

3%

23%

22%

38%

1%

1%

1%

6%

3%

15%

24%

51%

Other

Conference

Education

Medical

Event/festival

Holiday/ pleasure

Visiting friends/ relatives

Business

Total sampleLocalsVisitors

“Which one statement best describes the main purpose of your trip today?” – Locals “Which of these statements best describe your reasons for visiting the Rockhampton region?” - Visitors

Base: Total sample (n=1,058) Locals (n=488); Visitors (n=570)


SATISFACTION WITH AIRPORT PASSENGER RESEARCH

1 1 1

7

12

24

31

12 11

0 1 2 3 4 5 6 7 8 9 10

MEAN = 7.5

EXTREMELY DISSATISFIED

EXTREMELY SATISFIED

LOCALS: 7.59 VISITORS: 7.45


“Which of these facilities, if any, would you like to see at Rockhampton Airport?”

Base: Total sample (n=1,058) Locals (n=488); Visitors (n=570)

47%

18%

2%

8%

8%

14%

23%

Nothing

Other

Office accommodation

Hotel

Clothing/ accessories store

Service station

Undercover parkingLOCALS

(n=488) VISITORS (n=570)

Undercover parking 34% 14%

Service Station 11% 17%

Clothing/ accessories store 9% 8%

Hotel 8% 7%

Office accommodation 2% 2%

Other 12% 23%

Nothing 46% 47%

= statistically significant

‘Other’ includes: More food outlets Power points Cheaper parking More retail Chemist Better food outlets QANTAS Club Comfortable seating

ADDITIONAL AIRPORT FACILITIES REQUIRED PASSENGER RESEARCH


NEW ROUTE OPPORTUNITIES Sydney and Townsville RATIONALISATION Direct Sydney services viable, timing an issue. Frequent connections available over Brisbane No barrier to consumers making the journey Direct Townsville services are viable. Success dependent on identifying a carrier with a solid business model, flying at a time consumers will pay a higher fare for. AERONAUTICAL BUSINESS DEVELOPMENT RECOMMENDATION Pursue the Townsville direct service opportunity as a priority.

POSITIONING • Volume/LCC approach OR • Regional higher-yield focus

POSITIONING RECOMMENDATION Pursue regional airport positioning strategy

SUMMARY OF WORKSHOP OUTCOMES OUTCOMES

Business. Higher fare expectation. More frequent services on smaller gauge aircraft.

Discretionary market. Driven by lower fares. Less frequent services on larger gauge aircraft. Ideally requires major tourism drawcard.

Regi

onal

Leisure


SECONDARY RECOMMENDATIONS

• RRC Senior Resources Adviser position.

• Regional skills review, understand volume, capacity.

• Growth potential through training/migration.

• Market to tier one construction contractors.

• Review of RRC branding and positioning:

• Awareness: Raise awareness of the labour pool potential.

• Imagery: Refresh imagery for the region, make available (Google Images).

• Relocation: Develop web-based consumer information, to assist the general public in decision to relocate.

KEY RECOMMENDATIONS

1. Generic business case to all airlines.

2. Specific business case to establish a direct Townsville-Rockhampton service.

RECOMMENDATIONS OUTCOMES


Key message: Solid as a Rock!

SOLID MARKET

pax market is diverse, not

dependent on any one driver

Locals are a significant

component Visitors mostly

travel for business

GROWTH POTENTIAL

Galilee Basin export labour

Cost differentials to other regional

cities Economy & pop growth

potential; NRL bid

RESOURCES LABOUR FORCE

FIFO/DIDOs are 1 in 6

passengers Who are they?

Where and why are they

travelling?

TAGLINE: SOLID AS A ROCK!

KEY MESSAGE: Rockhampton is a solid, reliable passenger market with potential for sustainable growth, driven by local expansion.

Steady and sustainable growth is possible in Rockhampton through repeat and high frequency travel.

CALL TO ACTION: Maintain seat capacity, work with us to grow in the future.

THE ROCKHAMPTON STORY FOR THE AIRLINE BUSINESS CASE OUTCOMES

Call to action: grow Rockhampton, it’s a solid and safe market capable of sustainable growth