Tick tock: Melbourne airport records 5.1% FY16 passenger growth

Melbourne's Tullamarine airport published its latest passenger numbers on July 20th and announced it had achieved 5.1% passenger growth in the financial year ending June 30. This comprised 9.5% in international passenger growth compared to the same time last year and 3.7% passenger growth in the higher volume domestic segment.

At June 30th 2015, 32,192,000 passengers either originated or terminated a trip at Tullamarine's terminals and a further 122,000 transited at Melbourne to weigh in with a financial year 2015 total of 32,314,000 passengers.

Contrast this with the financial year just finished: 33,876,000 origin/destination passengers - made up of 9,165,000 international and 24,711,000 domestic trips - and coupled with a further 91,000 transiting passengers, the financial year to June 30 2016 total 33,967,000 passengers.

That's 1,684,000 more passengers that will have needed to travel to or from the airport terminals, compared to last year. All of those transfers/last mile trips will have taken placed on roads: on SkyBus, smart buses, private cars, taxis, Uber, town car services or shuttle buses. And that's only the passengers, never mind the legions of people who work at or near the airport precinct.

Aviation passenger statistics have peaks and troughs - at different times of the year and at different times of the week - for simplicity's sake by dividing the year-on-year growth number by 365 days in the year, we come up with an average of 4,613 new passenger trips along the Tullamarine Freeway, Airport Drive or Bulla Road.

But what is it going to be like in 10 years if similar growth continues?

According to the Bureau of Infrastructure, Transport & Regional Economic's aviation statistics, in the past decade Melbourne airport has no recorded a negative calendar year of passenger growth. We've had two years of slow growth (1.3% in 2009 and 1% in 2011), however we have had on average 4.73% passenger growth each year since 2006. (See the data here).

Calendar Year Projected passenger growth 4% p.a. Projected passenger growth 2% p.a.
2016 34,101,000 33,446,000
2017 35,465,000 34,114,000
2018 36,884,000 34,797,000
2019 38,359,000 35,493,000
2020 39,894,000 36,203,000
2021 41,490,000 36,927,000
2022 43,149,000 37,665,000
2023 44,875,000 38,418,000
2024 46,670,000 39,187,000
2025 48,537,000 39,981,000

* The above passenger projections are based on BITRE's 2015 Calendar year figure of 32,790,000 (rounded to nearest thousand) with 4% and 2% per annum growth scenarios accordingly.

Both growth scenarios above - the high growth scenario representing less than the average which has occurred over the past decade - paint a picture of Melbourne airport seeing between 40 and 49 million passengers either originating or terminating their trip at Tullamarine.

And all of these passenger trips through the airport terminals are going to be dependent on the road network.

The Citylink-Tulla widening project that is set to add an extra freeway lane from the West Gate Freeway all the way out to the airport is set to be complete and the short-term road capacity unlocked in 2018.

The Melbourne Metro Rail project, which according to its business case documents is a dependent project for the Melbourne Airport Rail Link, is not set to be complete until 2024.

Assuming a best case scenario where the planning, approvals, tendering and financing of the Melbourne Airport Rail Link were to occur in the latter stages of the Melbourne Metro Rail project's construction phase, so that construction can start in earnest soon after the Melbourne Metro Rail project is complete, we'd be looking at a rail link to Melbourne opening sometime in or after 2027 assuming a quick three year turnaround for construction of the Airport Rail Link.

10+ years from the time the new freeway capacity is unlocked (I give it, maximum, five years before we're back to the same congested status quo, just with higher volumes of traffic) to when a potential rail link would open is enormous. And risky from a congestion point of view; not just at the airport, but on many other segments of the Tullamarine Freeway.

The roar of engines on their take-off roll is only going to increase in frequency, yet this relentless passenger growth, both current and projected, is met with silence on providing real structural change in the way we interface with the airport.

Tick, tock.



Lead image credit: wongm's rail gallery


Michael Berquez's picture

How could they have not seen this coming years infuriates me...even moreso now that in the last three months alone I have missed two flights soley due to traffic on the roads, even after allowing myself hours to get to the airport from as close as Middle Park.

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Primal Beauty's picture

Start using the private jets and Essendon airport Michael he he...not sure about conspiracy theories but in this case Transurban is to be blamed according to some people...they want their toll roads to pay off, heavily, mind you...and Jeff Kennet apparently promised it to them...I have to say I loved the Jeff Kennet era though... I was just new to Australia and so much positive happend in Melbourne while he was in government...but I will leave the politics at this and say that we really desperately need that airport link now!

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SYmlb's picture

Would it be cheaper for them to consider opening a new international airport in the eastern suburbs versus a rail link? What are the costs associated with this? This would help add extra flights and reduce congestion and provide competition to Tullamarine's outrageous fees. Oh well, we could dream.

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Alastair Taylor's picture

$3.6 billion is being spent on a road network to service the new Badgery's Creek / Western Sydney airport.

(That's just to build the road network to service the airport). Doesn't include building the runway/terminals nor the rail line that our illustrious Sydney PM is now talking about for Badgery's Creek either.

Building MARL will be a lot cheaper than building a new airport in the outer South East (there's no place in the East where an airport could go).

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SYmlb's picture

I believe an international airport is proposed still somewhere past Cranbourne if I remember correctly. Land has been allocated there for some time and will probably need to happen if the latest population figures are to be believed.

Have they provided a business case for MARL yet? Would it be profitable at all?

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Mark Baljak's picture

Tooradin is the location - not worth holding one's breath though

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johnproctor's picture

The reality is that trips to the airport are a few times a year issue for most people.

There are 35 million passenger trips at Melbourne airport per year. There are 500,000 vsitors to the City of Melbourne every day. (thats 180 million per year for those playing at home). How long has it taken us to get up a new central city train line (Melbourne Metro).

One interesting thing about the airport line is that it does seem to be referenced much more in financial return terms than economic returns.

An interesting little spreadhseet financial analysis of how 'profitable' the line could be... or more to the point what % of the capital cost could be funded by fares.

Take 2025 4% growth number of 48 million trips. Assume 20% rail ridership (skybus is currently about 10-12% and Sydney Airport is about 15% but in another 10 years time congestion and user behaviour could make 20% achievable). Is 9.6 million annual trips. (for comparison as a line that 9.6 million out of 230 million trips on the metro rail network today - i.e. from a justification perspective a low percentage of total probably less than the Glen Waverly line).

assume a $15 fare per trip. (skybus is $17 one way today and $26 return so I've assumed that the majority of trips would be return trips).

(can't be bothered doing/explaining a full spreadsheet but assume ticket price escalation, opex escalation and profit discount back to a base year) to get something roughly equivalent to what follows:

so its roughly $150 million in revenue in 2025. Probably $50 million in opex. = $100m 'profit'. year on year on the operations. as a very rough guide take the profit and times it by 7 years to get the 'value' someone would be prepared to pay for the asset and you have a $700 million capital contribution to the end capital cost of the project available IF the government is willing to allow Skybus fares as the basis of the airport rail link (presumably in a similar way to the Sydney link works with a specific airport levy).

$700 million might cover 30-50% of the cost of building it... so not too bad an outcome, and potentially similar to what East West Link tolls or Western Distributor specific tolls would cover on those projects.

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