No plane sailing for Avalon Airport as limited flights threaten survival

Avalon terminal is often empty. Just five flights take off from its airstrip each day.
Avalon terminal is often empty. Just five flights take off from its airstrip each day. Photo: Getty Images/Pat Scala

There are drinks for sale at the Flying Fox Bar, coin-operated massage chairs of questionable utility, and regular PA announcements discouraging unattended baggage.

The only thing missing are the passengers.

As Sydney clamours for a second airport, Melbourne's sits seemingly idle. Flights at Avalon Airport have dwindled to a third of what they were at their peak a few years ago. Just five now take off from its airstrip each day. And all of them go to Sydney. It is the only destination available since the airport's sole remaining airline, Jetstar, axed the Brisbane service in April.

Now the airport is fighting desperately to keep its last remaining carrier from abandoning it. After years of losses on discounted flights, low-cost airline Jetstar is reviewing its operations at Avalon and the possibility of leaving.  

It leaves Avalon at a critical juncture in its 10-year history as a passenger airport, with the Lindsay Fox-owned operation struggling in the shadow of Melbourne Airport.

Jetstar has delivered a "use it or lose it" ultimatum to passengers who drive past Avalon on their way to Melbourne Airport. It says a record number of Geelong passengers are choosing Tullamarine. 

"Melbourne does need a second airport, all the good cities in the world have one," said Avalon Airport chief executive Justin Giddings.

The reasons why travellers prefer to use Melbourne Airport instead of Avalon are a mystery to Mr Giddings.

He lauds the cheaper parking - $49 for two days compared to $115 - that is found right outside the airport terminal and believes the hospitality amenities are up there with those at Tullamarine.

But while Avalon is "on the right track", Mr Giddings concedes the airport needs more flights to other parts of Australia if it is going to truly match its giant rival.

 About 23 million domestic passengers move through Melbourne Airport each year, but it's unclear exactly how many are using Avalon. The airport won't reveal detailed statistics for commercial reasons because Jetstar is the only tenant.

Mr Giddings also refuses to disclose the financial position of Avalon, as it is privately owned by Linfox, but he believes the airport's long-term lease and low costs leave it well positioned to make a strong turnaround.

"Melbourne Airport is probably the biggest monopoly in Victoria. Avalon is a challenger coming up against it, it's going to be tough," Mr Giddings said.

That battle will become even more difficult if Avalon loses its only commercial airline.

Jetstar threatened to pull up stumps last year but was encouraged to stay after being provided with a rescue package, including $5.5 million from the state government.

The threat of the airline's departure is being taken seriously. Geelong mayor Darryn Lyons is fronting a campaign on roadside billboards urging more people to travel via their local airport and keep Jetstar from leaving.

The region has taken a battering recently with closures or job losses at Ford, Alcoa and Target. Around 1000 people work at Avalon.

"For me personally, it would be a bit of a backbreaker to the economy," said Cr Lyons.  

"Jetstar has to support our area, otherwise it would be a devastating blow to the region."

The airline's current deal with Avalon is set to expire next April and any extension looks like it will rely on government support of some kind. 

There is hope the state government will come through with its election promise to build a $250 million passenger rail link to Avalon, although that has been delayed.

There is also a push to make Avalon capable of international flights, after the airport struck a deal with Chinese airline Hainan to establish flights there by the end of next year. 

For now, the task of persuading Jetstar to stay is the main game – and that task is looking increasingly tricky, particularly as the local aviation industry continues to struggle. Last week, Jetstar's parent company, Qantas, announced a big loss of $2.8 billion based on writedowns of its international fleet. Jetstar posted losses of $116 million, down from a profit of $138 million the year before.

While the airline's domestic arm remains profitable, Jetstar chief executive David Hall said it had suffered significant losses at Avalon since becoming the sole carrier in 2011. Profits at Avalon have been in "sharp decline" for some time, he said. 

"While some of our flights to and from Avalon are full, this is only because we're heavily discounting fares to fill the aircraft," he said.

Mr Hall said there was no expectation the state government would come in again to provide another lifeline.

"We're simply not in a position to absorb losses in perpetuity," he said.

At its peak, Avalon handled 30 flights per day, in and out. That was before Tiger Airways pulled out its operations in 2011 and Qantas closed its heavy maintenance facilities earlier this year, costing 300 jobs. 

Now, the terminal sits deserted for hours during the middle of the day as it waits for the next flight of passengers. Security staff yawn by the X-ray machine while maintenance staff in hi-viz clothing keep the terminal cafe ticking over. 

Apart from trying to woo passengers from Geelong, Avalon's major goal is to encourage them to get in their cars and drive down the Princes Highway from Melbourne. But that might be difficult. 

Professor Kevin O'Connor from the University of Melbourne researches urban planning and the development of airports in cities. He said while Avalon was well located to capitalise on population growth in the state's west, most people who fly are based in Melbourne's south, east and centre. Avalon was better suited for freight logistics, he said, and probably wouldn't be needed to provide domestic flights for at least the next decade. 

"We have to admit that Melbourne doesn't need a second airport yet," he said. 

A Sydney think tank reporting on that city's urgent need for a second airport recently put it more bluntly. Avalon, it said, was "little more than a converted paddock with large tin sheds". 

The comments were not well received by Mr Giddings, who does not believe Avalon has a branding problem. It's more a case of breaking the "generational habit" passengers have for using Melbourne Airport. 

And until that happens, it's not worth contemplating the doomsday scenario of Jetstar leaving Avalon without an airline.

"I reckon it would be a massive move, politically and reputationally," he said.

"They've been here for 10 years. Leaving an airport with the future it has for someone else to come in would be a big call."

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