Kingscote Airport Business Case Appendices - Kangaroo Island ...

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PRELIMINARY ASSESSMENTKangaroo Island Air Passenger DemandPAC has assumed that a “double” mid‐case scenario – that is, a mid‐case of visitor growth and a midcaseof air travel demand share of visitors – should form the basis of assessments of likely demandfor air services. Under these scenarios, current demand is sufficient to warrant 2‐3 daily Saab 340flights (consistent with the current offering by Rex). Assuming a continuation of these scenarios, afourth daily Saab 340 would be sustained by demand in 2016, and a fifth in 2018.Assuming a second entrant to the Kangaroo Island‐Adelaide market, and ongoing services by theincumbent carrier, PAC’s modelling shows that a double mid‐case scenario would support a threetimesdaily Saab 340 service and a daily 70‐seat service (such as an ATR72) by 2018. PAC notes thatKGC’s existing infrastructure appears insufficient to cater for this outcome. By 2023, PAC’s modellingshows that KGC demand could support three‐times daily Saab 340 services and twice‐daily 70‐seatservices.Kangaroo Island‐Melbourne DemandPAC has also considered the likely demand, and timeframe for implementation, of flights toKangaroo Island’s next‐nearest major market (after Adelaide) – Melbourne. PAC has assessed thelikely demand for a Melbourne flight from each visitor source market: For instance, it has beenassumed that the Victoria‐Kangaroo Island visitor market would experience demand stimulation,with air passenger demand representing 40% of post‐stimulation visitor numbers. Foreign marketsare also expected to be significant sources of demand for a Melbourne service, given the significantinternational connections offered at Melbourne Airport – considerably more than exist at AdelaideAirport. With these assumptions, it is expected that, following stimulation, there is sufficient existingdemand to support a daily Melbourne service using Q300 equipment 5 , or a 70‐seat service by 2016.5 Without stimulation, Melbourne market demand is likely to support a daily Q300 service by 2015.Page| 7
PRELIMINARY ASSESSMENTKangaroo Island Air Passenger DemandInfrastructure ImplicationsPAC’s modelling has assumed that Kangaroo Island can continue its strong performance in visitorgrowth, and turn around the decline in air passenger demand. PAC recognises that these are strongassumptions, and in the case of air passenger demand, represent a departure from current trends.Nonetheless, with the mid‐case scenarios employed, it is clear that KGC will face significant pressureon existing infrastructure within the next 5‐10 years. It is likely that there will be demand to supporta 70‐seat operator by 2016‐2018, either as a competitor to existing services to Adelaide or with anew service to Melbourne.The lack of adequate infrastructure (including runway, terminal and security considerations) at KGC,however, is an absolute inhibitor of these scenarios being realised. PAC considers it unlikely that analternative scenario whereby the incumbent (Rex) increases frequency to cater for expected demandto six or seven daily flights will occur. If competition is to occur, it will likely occur with aircraftcurrently too large and heavy for KGC’s infrastructure. Without air competition, the currentdownward trend in air travel is likely to continue due to the incumbent’s higher cost base (resultingin higher fares), limited network connectivity to major source markets and monopoly position.The counter‐factual scenario – or the ‘low‐low’ scenario – shows that current capacity to Adelaide islikely to be sufficient to cater for expected low‐growth demand, and demand will remain insufficientto warrant competitor entry. By contrast, Melbourne demand is likely to support an ATR72 flight by2019 under a ‘low‐low’ scenario, implying similar infrastructure needs.ConclusionBased on the modelling undertaken by PAC, and the information provided to PAC, Kangaroo Islandfaces a critical infrastructure ‘crunch’ in the next five to ten years. It is expected that demand for aATR72/Q400 service will exist by 2019, under even the most conservative of scenarios 6 . Of course,there is no guarantee that any operator will necessarily allocate aircraft for this opportunity shouldthe demand exist, however KGC’s inability to cater for this aircraft would certainly close theopportunity of either a Melbourne service or competition on the Adelaide route.6 Furthermore, the incumbent operator (Rex) is likely to consider airframe replacement for Saab 340 aircraft inthe 5‐10 year horizon. It is not known what aircraft are likely to be considered as replacement airframes,however there are no aircraft in the 30‐50 seat size range currently being manufactured – therefore, it is likelythat Rex will need to consider larger aircraft than its existing Saab 340 aircraft.Page| 8
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Page 16 and 17: Kangaroo Island Airport Upgrade Bus
Page 18 and 19: Document History and StatusRev Desc
Page 20 and 21: 6 Terminal Building 166.1 Descripti
Page 22 and 23: 1 Introduction1.1 Scope of ReportTh
Page 24 and 25: 3 Future Development Scenarios3.1 S
Page 26: 4 Site Investigations4.1 OutlineA s
Page 30 and 31: Coober PedyKingscoteAccordingly, a
Page 32 and 33: For aircraft landing to the north a
Page 34 and 35: Table 5-1New Pavement ThicknessesPa
Page 36 and 37: In this Study, allowance has been m
Page 38 and 39: An additional 20% of the gross area
Page 40 and 41: 7 Landside Facilities7.1 Car Parkin
Page 42 and 43: This situation will require monitor
Page 44 and 45: 8 Capital Costs Estimates8.1 Introd
Page 46 and 47: Table 8-2Pavement Element Compariso
Page 48 and 49: 8.4.3 Security Screening CostsIn ad
Page 50: Appendix AKingscote Airport - Curre
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Appendix CCalculations Terminal Bui
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Appendix DCapital Cost Estimates Sc
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Kingscote Airfield ReviewKangaroo I
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Kangaroo Island Airport Upgrade Bus
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CONTENTSContents ..................
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Kangaroo Island Futures Authority D
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