Perth Airport has issued an assurance that it will remain open to support the resources sector, despite the “catastrophic” impact on passenger numbers wrought by the COVID-19 pandemic.
Apart from servicing the FIFO workforce, Perth Airport also plays a critical role in the movement of freight both into and out of Western Australia, including vital medical supplies to support and protect doctors and nurses on the coronavirus front-line.
Perth Airport CEO, Kevin Brown, said it was vital that the airport remain open despite the almost complete collapse of international and interstate passenger numbers.
Mr Brown has revealed that Perth Airport has taken a massive financial hit due to the coronavirus with an expected loss of up to $100 million in revenue in this financial year alone.
Passenger numbers confirm the extent of the revenue collapse faced by Perth Airport:
- In 2019, from April to September, more than five million interstate and international travellers moved through Perth Airport.
- With Federal and State coronavirus travel restrictions in place, that number is expected to be close to zero for the same period this year.
- FIFO flights normally account for around 20-25 per cent of Perth Airport passengers. For the foreseeable future, FIFO workers will be almost 100 per cent of passenger numbers.
“The Coronavirus has been catastrophic for the aviation and tourism sectors and airports have not been immune from this,” Mr Brown said.
“This is the biggest financial challenge Perth Airport has ever faced – but we are up for the fight. Western Australians are relying on us and we won’t let them down.
“We are doing everything possible to steer our company through this storm and to keep our runways and terminals operating.”
Mr Brown said that with WA’s economic prospects so reliant on the FIFO-based resources sector, failure was not an option for his team.
“But the reality is our passenger numbers have collapsed, and as we collect aviation revenue on a per passenger basis, there has been a devastating flow-on effect to our income,” he said.
With revenue charged on a per passenger basis, airlines are being charged less by airports because they are carrying fewer passengers. While airlines can also reduce their flight schedules to cut costs, airports do not have the same flexibility.
“Despite the dramatic slump in aviation revenue, we still need to maintain our airfield and terminals, provide security, cleaning, air-conditioning and power, pay land tax and council rates, service our debt, and pay our workforce,” Mr Brown said.
“In fact, we’ve had additional costs such as increased coronavirus-related cleaning and the move by resource sector companies to spread the same number of workers out over additional flights.”
Mr Brown said Perth Airport had already taken a number of steps to preserve jobs and keep the airport operational including:
- Advising shareholders (primarily Australian superannuation funds) there will be no dividend this year
- Working with the Perth Airport team to agree reduced working hours and the use of leave entitlements
- All members of the Executive taking a pay cut
- Cancellation of bonus payments for Executive and non-enterprise agreement staff
- Freezing all new recruitment
- Cutting all non-essential spending
- Placing the majority of the airport’s capital works program on hold
“We are also looking for additional operational savings, but we have been hindered by the fact we have five terminals stretched out over our 2000 hectare estate,” Mr Brown said.
“We are looking at ways we can partially close our terminals during the day or night and look to consolidate flight services around the FIFO demand.”
Ultimately, however, Perth Airport will have to temporarily close some terminals due to the almost complete fall-off of interstate and international flights.
“We have been working cooperatively with our airline partners, our retailers, our service providers and our tenants because we understand they are under the same financial pressures that we are,” Mr Brown said.
“We have been able to avoid redundancies or stand-downs to date. We will resist calls for Perth Airport to take on or absorb additional costs because this would simply move us closer to having to lay people off.
“Our team members have already made sacrifices with reduced hours or using leave entitlements.
“I’m proud of what they are doing to keep our airport operational and I’m committed to doing everything possible to preserve their jobs.
“The Federal Government’s JobKeeper package is a welcome move and may give us more time to ride out the storm,” Mr Brown said.