DESTINATION DEVELOPMENT
ADVANCE CAIRNS PRIORITIES 2021/22
AVIATION AND TOURISM COUNCIL: ALL TNQ STATE ELECTORATE: ALL TNQ FEDERAL ELECTORATE: KENNEDY, LEICHHARDT
BACKGROUND
BRIEFING NOTE SUMMARY • Cairns is one of Australia’s most aviation dependent communities, with more than three times as many passenger movements per resident (31.6) compared to a city such as Brisbane (9.7). • During COVID-19, Cairns lost 95% of its total air capacity for the three months ending June 2020. Globally, international airline capacity is not expected to return to preCOVID capacity until after 2023. • 52% of TNQ’s 3 million visitors per annum come through the airport. Aviation capacity is currently sitting at less than 55% of pre-COVID seat capacity. • COVID-19 has had a disproportionate impact on the region with a forecast loss of $2.2 billion in 2021, impacting on more than 7,700 jobs in the visitor economy. • A Queensland Government investment of $100 million over four years is needed to boost statewide aviation capacity. In addition, TTNQ requires $10 million over four years to boost event tourism.
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THE ISSUE TNQ is one of the destinations most affected by COVID-19 in Australia, with visitor spend estimated to have fallen $2 billion in 2020 and domestic and international aviation seat capacity predicted to remain at less than 50 per cent of pre-COVID levels for at least the next two years. This would impact more than 7700 jobs in the region from the visitor economy. TNQ stretches from Cardwell to the Torres Strait and west to the Northern Territory border and receives nearly three million domestic and international visitors annually. This equated to an estimated $3.5 billion in annual visitor spend in the year ended March 2020. Two-thirds of the region’s visitor nights are domestic travellers, and one-third international. While international borders are currently closed, when they do reopen the reintroduction of international aviation capacity to Australia is likely to be slow. Cairns airport must therefore seek to maximise opportunities to recover domestic airline capacity and take advantage of travel ‘bubbles’ to markets such as New Zealand, Singapore or Japan as and when they become available. With limited international flights returning to Cairns in the coming 12-18 months, capturing as much domestic capacity as possible is crucial to support and re-energise the tourism sector and the local economy. The Cairns community welcomed the support of Governments in providing direct support to the airlines (Federal) and the airports (State) to support the reintroduction of domestic services to Cairns and across the region.
ADVANCE CAIRNS STATE BUDGET SUBMISSION
Air connectivity is key to the economic development of the Cairns region. It opens up new visitor markets, enables the export of agricultural produce and promotes growth in the education sector. A daily international wide-body flight to Cairns is potentially a $200 million a year export business, with $100 million of international visitor spend, $50-$150 million of agricultural produce sales, and the potential to deliver more than 650 new jobs widely dispersed across the region. Cairns Airport is the nation’s seventh busiest in terms of combined international and domestic passenger movements. It has historically handled around 130,000 aircraft and over 5.2 million passenger movements per year. The airport is widely recognised as one of the most significant economic drivers in the Tropical North Queensland (TNQ) region and its facilities are critical pieces of economic infrastructure. As the COVID-19 uncertainty and international border closures continue, further assistance is needed. The key international and domestic aviation gateways of Queensland (Cairns, Sunshine Coast, Brisbane and Gold Coast) joined forces to present an opportunity to government to review the current approach to aviation attraction funding structures and programs. A COVID recovery paper presented in March 2020 recommends a statewide investment in a new Aviation Capacity Expansion (ACE) program of $100 million over four years and continued Federal Government support for freight and international services under the International Freight Assistance Mechanism (IFAM). The route stimulus funding from government resulted in a return of nearly 70% of pre-COVID domestic seat capacity in December, when all state borders were briefly open for leisure travel (although that has since fallen and continues to do so). Packages such as the Alliance Airlines subsidy for the Sunshine Coast generated 931 seat sales, while the Virgin Australia seat subsidy in NovemberDecember generated 2422.
