Chief Minister Andrew Barr's acknowledgement this week that there is little the government can do to secure regular international airline services beyond spruiking the territory's business and tourism virtues is a welcome admission of economic realities. Airlines will not schedule regular overseas passenger flights to and from a city where none has existed before except on the basis of sound commercial consideration. Many a state or territory leader has offered airlines or transport companies inducements or subsidies of various kind to set up shop in their home town, but the ACT government is in no financial position to go down that road. With international airline connections available just 280 kilometres away in Sydney, there is no real justification for it in any event.
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Canberra's claims to host direct international flight are not entirely groundless, however. As Mr Barr has noted, about 900,000 people live within two hours' drive of Canberra, which is a catchment not much smaller than Adelaide's, a city of 1.2 million served by 30 direct international flights each week. For people from the Southern Highlands and points further west who might be travelling to Singapore, New Zealand or China – the destinations likely to be on offer first in the event direct flights are introduced – the attractions of taking off from Canberra rather than Sydney would seem to be manifest. It's not just time and money that could be saved, either. Departing Australia from Canberra rather than Sydney would, from a passenger viewpoint, be far less stressful than negotiating the long queues and barn-like atmosphere of Sydney airport.
It's the airlines' hard-nosed business perspective that matter most, however. With Qantas and Virgin profiting from flying Canberrans to Sydney to connect with their long-haul flights in Sydney, there's arguably little incentive for the two Australian carriers to install the infrastructure needed to begin or terminate international flights in Canberra. But not everyone flying out of Sydney travels Qantas or Virgin. Setting up in Canberra would, theoretically give the two carriers' overseas operations a slight competitive advantage, an edge which would be further enhanced by the lower landing fees. Sydney charges the highest landing and aircraft parking fees in the country (and its car parking charges and retail rental are also notably steep) – a reflection of its monopoly status in Australia's largest capital city. Capacity at Mascot is also tight, particularly at peak periods, another factor, potentially, in Canberra's favour.
Having spent up big basing themselves at Mascot, the overseas airlines might understandably baulk at outlaying more money to establish permanent operations in Canberra, particularly if the economics around passenger loadings are chancy. However, until Sydney's second airport is built at Badgerys Creek, the owner and operator of Mascot, the Sydney Airport Corporation, will continue to dictate terms to the airlines. And even when Badgerys Creek is operational (sometime in 2025 if forecasts prove correct) the power imbalance will probably continue as Sydney Airport Corporation has the option of managing the new airport and will doubtless exercise it.
It would be in the overseas airlines' interests to come to Canberra if only to engender more competition in landing and airport charges. And if the potential market figures do not appear compelling now, they will doubtless improve when Canberrans are offered the choice of originating their overseas travel at a modern, efficient airport rather than one where kerb-side congestion is endemic and where times to check-in, to clear customs and immigration, and to collect baggage can be frustratingly slow.
The lack of a fast train service connecting the ACT to the wider regions probably weakens the case for direct flights, as does the fact that the freeway connecting Canberra to Sydney and Mascot is now first-class. But the city and region's strong population growth, and the increasing numbers of Chinese tourists and business people making their way to Australia, suggest international flag carriers will become a regular feature here sooner rather than later.
As Mr Barr has recognised, this process cannot be rushed. And it certainly shouldn't be enabled with taxpayer subsidies. The airport owner's plans to turn it into a freight hub are well advanced, and direct overseas flights will be a natural corollary to that. The government's role is to continue to facilitate this by talking up the considerable benefits of direct overseas contact with Canberra.
