Letter: Council Rebukes Dutton on Airport

Filed in editorletters, Recent News by October 16, 2019

Dear Editor,

It is broken and we do need to fix it.

Council is committed to saving the Upper Hunter’s only regional airport. It has been operating for over 60 years and Scone Regional Airport could still be operating in another 60 years. But if we fail to act now, it will not be licensed by the Civil Aviation Safety Authority (CASA) by the end of 2020.

We have repeatedly advised the community about what airside works are required to keep the airport open, and what the impact would be on emergency services and local industries if the airport were to close.

Through a planned substantial airport upgrade, including more facilities and a new Warbird Visitor Aviation Attraction, the airport could also pay for itself, instead of currently costing $300,000 a year to run.

Daryl Dutton does not believe this is achievable or necessary and is entitled to his opinion, however it differs from the advice we received in comprehensive reports conducted by independent experts in finance, engineering and aviation.

To briefly address the main inaccuracies and assertions in his letter:

Scrutiny missing? Council has undertaken all due diligence in planning, approvals and Government funding of this project. All of this information including the Capital Expenditure Review, Safety Reports, Statement of Environmental Effects, traffic and noise assessment, and the 2016 Airport Masterplan are available via a link on the front page of Council’s website.

Comply or close: Mr Dutton is incorrect about grandfathering provisions of the new regulations.  Scone Regional Airport is currently a registered airport and will be required to become a certified airport under the new legislation which commences on 21 August 2020.  CASA will not ‘grandfather’ known and/or existing safety hazards and non-compliance items where an order to rectify has been issued.

Taxiway, Runway and landing numbers: In brief, a $2M Runway Pavement Upgrade completed in 2011, began failing in 2015 and is becoming dangerous. The result of not addressing the sub-pavement moisture levels and other aspects of construction has resulted in the construction joints opening, which are now cracked and releasing loose aggregate material generating Foreign Object Debris (FOD) on the runway.  FOD in any form is considered a hazard to aircraft operations.

The 2017 independent engineering report ‘ Pavement Investigation, Assessment, Maintenance and Rehabilitation’ is also available on our website airport project page.

The works that are planned now are to construct drainage along the full length of the runway to address the sub-pavement moisture issues, remove, reconstruct and lime stabilise areas of sub-pavement that have failed and a full length runway asphalt overlay to airport specifications.

This is one of several non-compliances – including runway lighting and the 2011 Runway End Safety Area – that need to be fixed before the commencement of the new legislation in August 2020, in order to keep the airport licensed.

Further there have been a number of near miss incidents where aircraft have nearly flown into each other due to the vertical curve on the runway which restricts visibility from one end to the other.  Due to the known safety hazard, the parallel taxiway is required to minimise or eliminate the known risk. 

Mr Dutton’s figures of the number of aircraft using the airport as less than 14 per day reflects 2017/2018 total landings.  More recent figures show 16 per day, two of which on average are emergency services.  Aircraft landings have increased from 3500 in the 2014/2015 to 5830 in 2018/2019 and are forecast to continue to increase. 

Landing Fees: The business case provides for an annual increase in landing fees of 3% (which is the current practice).  The increase in revenue is a result of increase in usage.  With the new business operations and the tourism attraction, the business case has forecast growth in airport usage which results in increased landing fee revenue over the 10 year period.

Hangar Fees: Mr Dutton’s claim (quoted as page 3 of the Capital Expenditure Review, actually page 31) that the largest increases in revenues from the proposal are related to the lease of new hangars is misleading: the report makes clear this is the largest increase from ‘normal’ airport operations, which are considered separately to the Warbird Visitor Attraction. 

An additional $2.5M investment is proposed in year 6 to build more hangars (with loans to be repaid by lease fees) but this will be based on an assessment of demand at that time.  At this stage, based on discussions with local operators and businesses looking to relocate from Sydney there is considerable demand for the new hangars, and lease fees proposed are based on discussions with other operators in the airports association).  It is important to understand that this demand is driven in no small part by closures of airports in the greater Sydney region and land availability and increasing flight constraints at Bankstown.

Extensive commercial and in-confidence research was undertaken on the hangar lease fees for commercial operations by The Stafford Group.  It was confirmed that the average fee for new commercial hangars across regional Australia is $35 per sqm including all outgoings.

How many employees? The majority of the proposed hangars are not for light aircraft, but commercial operations.  Council has been in discussions with new commercial operators seeking hangar space at Scone Regional Airport.  New businesses at the airport will also support the local economy and job growth.   

Realistic Business Plan: Mr Dutton’s claim that Council will incur “another” $1.5M in operating losses over the first three years is misleading: Council currently subsidises the airport by over $300,000 a year, so the cost to the community will be at least $900,000 over 3 years even if the project did not proceed. 

Consider the impacts of the project over the longer term, as the loans are repaid, and as revenues increase with a growth in visitor numbers, the financial modelling suggests that Council will be able to completely eliminate its subsidisation of the Airport and generate a surplus that can be reinvested in community services and infrastructure.

Drought Stimulus: The NSW Government’s $170 million Drought Stimulus Package funds shovel-ready infrastructure projects with the objective of “delivering economic stimulus for local economies experiencing the flow-on effects of the drought”. The Scone Airport project was assessed by the NSW government as supporting the community by generating local jobs and stimulating the local economy.  The funding was provided specifically for the Airport and Council cannot allocate it to other projects. 

Airshows: As outlined in the independent Project Feasibility Study for the Warbird Over Scone airshow, attendee numbers are projected to increase from 8,000 in 2020 to 15,000 by 2028. Expenditure does not increase at the same rate as most of the costs are fixed (eg advertising and insurance). 

1000 visitors each week: Visitor numbers for the Warbird Aviation Centre are assumed to start at 20,000 to 25,000 a year (more in years when a major Airshow is held) and increase to 30,000 to 50,000 per year over 10 years.  Temora Aviation Museum attracts around 40,000 visitors a year and has a smaller population catchment than Scone.  Assumptions for ticket prices for general admission (on non-Airshow days) are lower than Temora’s. The increase in revenues in year 5 is partly due to continued growth in visitor numbers in the early years (growth is less in later years) coupled with a proposed 20% increase in ticket prices in year 5 (this is clearly identified in the Capital Expenditure Review).

General Aviation nose-diving: There are enormous challenges facing small airports and many are going to close. Use of Scone airport however is still growing, therefore the closure of other airports (particularly in the greater Sydney region, as discussed above) is an opportunity for further growth, if we create facilities that meet demand.

Small aircraft aviation is not going to cease, and particularly its use by emergency services.

Steve McDonald

General Manager
Upper Hunter Shire Council

Unfortunately Council only provided this response to Mr Dutton’s letter 24 hours after providing it to other media. We have asked why this was the case, but have not received a response. It did make us smile though that Council had obviously read our version of Mr Dutton’s letter, as we inserted sub-headings, which they have adopted in their response to Mr Dutton.

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