International Flights; Senator Calls For Townsville Airport Boss To Step Down

Corporatocracy Leadership Cohort Scrambling for Excuses

International flights out of Townsville to Bali will be discontinued by Jetstar from 22^nd March 2018 due to a lack of patronage the budget carrier said, putting Townsville’s capital of North Queensland claims in serious jeopardy and a Senator calling for the Townsville Enterprise (TEL) Chairman to stand down.

The CEO of Townsville Airport and TEL Chairman Mr. Kevin Gill campaigned aggressively in 2014-15 with local Townsville leaders to achieve federal government support for customs and border protection resources to be stationed in Townsville in order to boost the City’s international tourism numbers.

The Jetstar decision this week comes just days after Mayor Jenny Hill criticised the budget airline’s parent company Qantas for refusing to raise the price of domestic airfares by $3 per passenger as a means of funding the proposed $80 million upgrade of the airport.

Speculation that the feud created by Queensland Airports Limited and Mayor Jenny Hill demanding that Qantas increase its airfares to pay for the airport upgrade contributed to the Jetstar decision to axe the Bali flights.

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But the CEO of Jetstar’s Australian and New Zealand business Mr. Dean Salter may have unintendedly implicated Ms. Hill and Mr. Gill because he said the $3 levy would have made the route even more unviable. However, the $3 levy does not apply to international routes out of Townsville.

When Jetstar had agreed to deliver a Townsville to Bali service in 2015, the airport CEO and Chairman of TEL said: “I encourage North Queenslander’s to embrace the new service when it starts in September, proving that there is a growing appetite for direct international services from Townsville”.

Jetstar’s argument for closing the service is that insufficient support existed for the service, which could be frustrating for the TEL Chairman who anticipated the people of Townsville would prove Jetstar’s support for the city was justified. This was not to be.

Many questions must be asked now about the management of Townsville Airport and the suggestion that Townsville’s tourism marketing under the stewardship of TEL has been poorly executed in attracting international passengers from Asia through to Townsville via the Bali route.

Senator Ian McDonald called for Mr. Gill to stand down as Chairman of TEL.

This comes on the back of advice from marketing guru Don Morris in the Pure Projects report that puts Townsvilleans and the “experiences” tourism product of the City at the centre of any future successful marketing initiative.

Now it seems the lack of accountability in the Townsville cohort of leaders and the poor execution of an Asian and global marketing plan brings a sense of déjà vu just like the highly political collapse of Queensland Nickel under the weight of unviable commodity prices.

Townsville Enterprise CEO Patricia O’Callaghan said “It’s not about simply marketing, it’s much deeper than that.” she said in a comment to Townsville Bulletin reporter, Domani Cameron.

“We need to keep going and keep analysing new routes. It does definitely impact our brand and we’re going to have to work harder”, Ms O’Callaghan reported.

City’s international reputation at risk by “reckless” Mayor

Yet there was no suggestion of accountability among the Townsville leadership cohort except the local Senator Ian McDonald who called for the Townsville Airport CEO to stand down from his role as TEL Chairman or in his role with Queensland Airports Limited.

The owner of Townsville Airport, Queensland Airports Limited, has come under further scrutiny from a rambunctious Mayor Jenny Hill who has not only accused board members of a conflict of interest in not supporting Townsville’s bid to become the fly-in fly-out hub for the Adani coal mine, but directing her exuberant comments towards Qantas for not increasing prices on flights to cover airport upgrades and undermining the national icon’s brand.

Ms. Hill has become consistent in attacking commercial brands, even visiting journalists reporting candidly on the lack of appeal of the City’s tourist attractions, using bullying tactics as a weapon for negotiation that has seen the economy plummet into recession under the leadership of the veteran Labor politician.

Reaching out to another airline to fill the void of Townsville’s international descent by Jetstar fleeing the international scene could be a tall order considering the way in which the leadership treats company’s taking commercial risks in the region.

The local government authority and the leadership cohort have become used to demanding handouts and hand ups from the federal and state government, commercial enterprise and rate payers while castigating and ridiculing businesses that have already ventured their capital in the City for a little dividend over the past 5-10 years.

Despite the good news of economic stimulation projects in construction of housing, mining and energy, and the federal and state governments’ investments in social services in the City, the Townsville leadership, communication and marketing formula for success has alluded the current crop of leaders. At the glimpse of any further withdrawl of big business, the capital of North Queensland status could be stripped too if the City loses its international airport altogether.

Strategic airlines also cancelled Bali to Townsville flight in 2011 due to the lack of passenger numbers.

Again, the ripple effect of Townsville’s downgraded tourism status and lack of vision and commercial acumen within the leadership cohort of the City presents concerns for business confidence and the supply chains that service and provide opportunities to the stakeholders in the property market.

Political and climate change related risks are serious elements to the economic sustainability of the City and Northern Australia moving forward and the direct and indirect consequence on property yields and capital values.

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Who Knows Townsville Airport Sharing Infrastructure Is Strategically Important?

Townsville Airport and Defence Sign Joint User Deed (JUD)

One of Townsville’s most strategically important urban infrastructure properties in northern Australia was the subject of a revised Joint User Deed between the Department of Defence and Townsville Airport Pty Ltd (TEL) this week.

The sharing infrastructure economy in Townsville has been a long standing affair well before Uber and Air BnB rose to international notoriety.

TEL said Townsville Airport and the Department of Defence have this month revised a Joint User Deed, ensuring an ongoing productive relationship is shared between the two entities.

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The newly signed JUD acknowledges the importance of continual consultation and cooperation in relation to use of the Joint User Area of the airport.

Chief Operating Officer Kevin Gill said this was an important milestone in the longstanding relationship between the airport and Defence.

“Townsville Airport and the Department of Defence have a close working relationship, in that we share a runway.”

“Revising the JUD demonstrates our strong commitment to collaborative decision making between both parties.

“The original JUD between Townsville Airport and Defence has been in place for nearly 20 years, so it is important that we revised the deed to reflect current day requirements,” said Mr Gill.

Key revisions under the new JUD include Townsville Airport stakeholder representation at Major Maintenance Program planning sessions, and the implementation of monthly stakeholder meetings between both parties.

A spokesperson for Defence said, “The JUD infrastructure partnership with Townville Airport is an example of the broader benefits of collocating a Defence establishment in a supportive regional community. The partnership will continue to provide the Townsville community with local economic benefits and opportunities, while also supporting the Australian Defence Force’s ability to defend Australia”.

The new JUD will be reviewed on a regular basis to ensure changing requirements of both entities are considered.

Townsville Airport is operated by Townsville Airport Pty Ltd under a long-term agreement from the Commonwealth of Australia. The runway and taxiways are operated and maintained jointly with the Department of Defence under terms of the Joint User Deed dated 9 June 1998.

As a joint user airport, both civil and military aircraft movements are accommodated for within the Townsville Airport airspace. 

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Two Airports Call for Townsville; Conflict of National Security for Existing Air Transport Facility

Townsville's real estate industry is an instrument of calibration and diagnostics for the broader economy.

So the current limitations placed on Townsville's most strategic economic asset being controlled by national security interests or constrained by federal budget priorities is a subject worthy of further investigation and reporting in this article because of the impact on property and investment interests in the City.

The real estate industry is one of the most critical arteries that carries the economic life blood of capital and cash flow to the businesses and employees of the City. In fact the real estate, rentals and hiring sector is the highest contributor to the Gross Regional Product (GRP) in the Townsville economy.

As proposed by the Townsville Real Estate Blog (TREB), facilities development will be critical to achieve immediate economic stimulation and sustainable development for the City over the next decade.

The rejection of Townsville's bid for direct international air traffic carrying passengers and goods draws attention to a potential conflict of interest between border protection priorities and Townsville's business and property interests.

Conflicts of interest or fragmented decision making posses a direct threat to the short term creation of jobs and long term growth plans for the City. The security and commercial interests of Townsville's garrison city raises serious questions for town planners and political leaders.

The bid by a fledgling group of local private investors to buy the lease rights to the Port of Townsville under a State government initiative to reduce government debt is an example of the depth of feelings in the community to control such a regionally strategic asset.

As this strategic shipping facility shares parallel commercial and military functions like the Townsville Airport, it too is most likely to have similar uncertainties for investors that are inherent where ring fencing of government and national security interests is a punch line in today's environment of intense governance policies.

For decades the federal government's military and security assets in the garrison City has been attributed to Townsville's reputation for growth, stability and relative certainty. Achieving the status of being the Capital of North Queensland and a legacy of strong population and economic growth over the past 20 years are proud credits for a relatively conservative community in regional Australia.

The findings to the Taskforce on the Development of Northern Australia did no feature Townsville as some people may have expected. The focus of infrastructure and centres of business development instead is directed to a greenfield site in the Northern region of Western Australia.

One of the findings in the Green Paper, Joint Submission to the Northern Australia Taskforce, identified that "Governance arrangements across the various jurisdictions and regions of northern Australia are fragmented and require streamlining and/or collaboration. Land and water use arrangements are crucial examples of these governance challenges which are central to future development opportunities.", the Green Paper considered.

The Green Paper also identified that "Stagnation can only be overcome with new investment targeted at new markets and offering new experiences. Several proposed integrated resorts in the Cairns region (Aquis Resort and Ela Bay Resort) exemplify the type of large-scale investment that may be required to reignite tourist demand.

Townsville Enterprise claimed to be stepping up their lobbying efforts to secure international air services following the Australian Customs and Border Protection Service's decision to reject the proposal by Air Asia to launch direct services from Townsville to Denpasar.

The decision by Customs and Border Protection Services has suggested the rejection of the international carriers proposal was attributed to resourcing of security processing equipment and personnel.

One has to question the viability of strategic national security assets and commercial private sector assets operating in parallel on military controlled land and government controlled transport infrastructure such as the Townsville Airport, and to a less extent, the Port of Townsville.

Tourism has an economic impact less than real estate, rentals and hiring in Townsville. The Australian Customs and Border Protection Service's decision to reject direct services from Townsville to Bali is a massive limitation to the City's ambitions to develop a broad-based economy. Such a decision has heightened sensitivity in a region where unemployment is sitting at record levels, and tourism is a critical pillar in maintaining a comfortable balance for an economy retracting after a recent downturn in the mining industry.

The military priority of the Townsville Airport is a menace to sustainable economic development. For the people of Townsville, leveraging the airport is a passionate interest to facilitate international trade directly into the Capital of North Queensland, especially for the largest City identified in the federally proposed Northern Development zone.

Could the growth of Townsville's air transport economy mean that commercial and military traffic have access to separate dedicated facilities? Does Townsville now plan for an international airport to the west of the City?

During World War II, Townsville accommodated multiple airfields. One of which is still operational today used for amateur aviators near Woodstock only 30 minutes West of the City.

The Australian Defense Force has budgeted for an extension to the Townsville runway to accommodate larger logistic aircraft being added to the Royal Australian Air Force (RAAF) fleet. The extension of the runway could also accommodate larger international aircraft. As the runway extension is driven by RAAF imperatives, consideration for parallel commercial traffic could not be confirmed by local RAAF Command.

Townsville Enterprise confirmed a strong interest by international tourism operators for direct services between Townsville and Bali. Townsville Enterprise Acting CEO said; "This is an issue affecting Townsville North Queensland that will continue to undermine attempts to properly develop the city and achieve the economic potential of Northern Australia. International air services are critical in connecting the north of Australia to a global market which is vital to the growth of the region.

The Acting CEO continued to report that "Townsville residents remain disadvantaged due to the Federal Government’s policy regime that proposes significant additional costs for passengers using Townsville International Airport, which is the 11th busiest airport in the Nation. No such charge is imposed on passengers using any capital city international airport in Australia."

"Townsville Enterprise, Townsville City Council and the Townsville Chamber of Commerce have been leading a united charge on this issue over the past few months. The issue was at the centre of a number of Ministerial meetings in Canberra last month and correspondence is ongoing.", the Acting CEO commented.

In the context of heightened sensitivity for national security, a strengthening global free trade framework with developing countries, and a local economy entrenched with tourism services, could these conflicting elements mean a extended period of frustration and struggle for a clear passage for international traveller markets into the Townsville region?

This potential "Cold War" between federally controlled security assets and local commercial tourism and property investment interests could be the catalyst for broader debate about a second airport with international specifications for the Townsville region.

Townsville's economic ambitions are dependant on the direct link to international trade through increasing air traffic, shipping and ecommerce activity.

A federal government centred over 2000 kilometres from Townsville facilitating a conflict of interest contrary to the interests of the people of Australia's 2nd largest regional economy could again be called to action at the next ballot box should the community find the observations of TREB worthy of further comments and debate.

References:

Townsville Real Estate Blog
Townsville Enterprise website
Townsville Bulletin