Would we use an airport train (as much as we say we would)?

Ground transport mode share for Melbourne Airport passengers (%) - data from Melbourne Airport

Yesterday’s post on the unreliability of predictions fits nicely with the latest round of calls for a rail line to the airport. The stimulus this time is a report in The Age last week on Melbourne Airport’s plans to upgrade freeway access and build a new terminal.

It set off a predictable and familiar landslide of calls for a train line. There were 141 comments on the article, virtually all of them advocating an airport train. I must say that I’ve hardly met a Melburnian who doesn’t think an airport train should be a high priority of any and all governments.

Some doubtless think others would use a train and thus, they imagine, reduce congestion on roads leading to the airport. But I expect most see themselves avoiding gridlock, punitive airport parking fees, or high taxi fares by using the train for most of their airport travel.

And yet if the train were built, there’s no doubt their prediction would prove to be enormously over-optimistic. Brisbane has a train from the CBD to the airport that carries just 5% of all travellers (another 3% come by bus). Sydney has a train too – it only carries 10% of all travellers (and a further 2% access the airport by bus). As Jarrett Walker observes, the political popularity of airport rail “is always several orders of magnitude above its actual ridership”.

Is there any reason to think that a train to Melbourne airport would increase public transport’s existing share of travel by a significantly greater amount than the trains have in these other cities?

Even without a train, Melbourne Airport already has a higher public transport mode share than either Sydney or Brisbane, with 14% of travellers accessing the terminal by bus. The former Government’s specification for a future airport train was a $16 fare, 20 minute trip time and 15 minute frequency. That’s much the same as SkyBus provides at present.

It’s true trains are generally more appealing than buses, but I can’t see that’s likely to lift public transport’s share significantly – certainly it hasn’t been enough in Brisbane and Sydney. It’s more likely it would cannibalise SkyBus and perhaps gain one or two additional percentage points of mode share.

If the latent demand for better public transport service between the airport and the CBD was as strong as readers of The Age think, then SkyBus – which offers the best frequencies and span of hours of any public transport service in Melbourne – should be doing much better than it is now (and it’s doing quite well).

It’s often argued that if an airport train were priced at a Zone 1-2 fare, it would attract higher patronage than SkyBus. That’s likely to be true, but it’s totally unrealistic – no Government is going to spend billions on an airport rail line and then subsidise its operations. And nor should it.

In any event, I doubt the increase in patronage would be anywhere near as dramatic as some assume. There is a host of reasons why the great majority of travellers would still prefer to drive or take a taxi than pay even a Zone 1-2 fare.

For example, most airport trips are to or from homes and workplaces in the suburbs – a taxi or a car is usually going to be more convenient than going to the local station and transferring to the airport service at Southern Cross. For many regular travellers, taxis and parking are cheap because they’re a business cost.

For tourists, it’s easy to justify a taxi for an occasional and important trip. Most tourists also travel with at least one other person, so in many cases that will improve the competitiveness of a taxi, or the long term car park, relative to public transport (I’ve elaborated on these reasons in previous posts – see Airports & aviation category in sidebar). Read the rest of this entry »

Are parking prices at the airport a rip-off?

Mode share at five largest Australian airports - all users (%)

The new draft report by the Productivity Commission on Economic Regulation of Airport Services has sparked outrage among readers of The Age for its finding that parking fees at Tullamarine are “not a ripoff”. Last time I looked there were 110 comments on The Age Online, virtually every one of them dripping with vitriol.

Whether you’re happy with its conclusions or not, the thing about the Commission is that, relative to The Age’s readers, it’s put a lot of effort into this review, its assembled facts and figures, it’s made its assumptions transparent and its set down its line of reasoning. So far as I can see, none of that is true of the angry and furious readers who commented on The Age’s story.

The Commission examined lots more than parking but I’ve only had a chance to look at the chapter dealing with landside transport. It starts by acknowledging airports have the potential to raise parking prices above competitive levels and to control access to the airport by modes that compete with airport parking. It also notes the ACCC expressed concern the operator of Melbourne Airport seems to restrict entry by off-airport parking operators and private bus operators.

The Commission examined three sources of evidence for the possible existence of monopoly practices i.e. the ability of an airport to use its market power to restrict competition.

It looked first at whether there are effective substitutes for on-airport parking. The availability of alternative means of travel puts a ‘natural’ cap on what airport operators can charge. Hence all forms of transport must be taken into account. For example, at Melbourne Airport, travellers can use a private car (pick up and drop off; on-airport or off-airport parking), catch a taxi, take Skybus from the CBD, or use the 901 orbital SmartBus (which connects the Airport with Broadmeadows rail station) at standard Metlink fares (there are some other private bus operators too).

Off-airport parking is a particularly important substitute for those who drive. As the exhibit shows, this has a much larger role at Melbourne than at other airports. There are 14 private parking operators near the airport, providing 10,000 parking spaces in total. This is half the total number available on-airport. (The Airport operator is also examining a proposal for a new parking area where ‘meeters and greeters’ can wait until summoned by phone by the passenger they’re collecting).

The second issue the Commission addressed is the reasonableness of parking prices, noting that they are made up of a number of components. The obvious one is the cost of building and operating parking facilities (surface parking costs $2,000 per bay, multi-level parking stations $20,000 per bay). The total number needed is determined by peak demand (a few days at Christmas), meaning for most of the time some bays aren’t earning revenue.

Other components are the need to use price as a means of rationing demand (e.g. keeping long-term parkers out of scarcer and more valuable short-term spaces) and, finally, there’s the opportunity cost of the land used for parking – its value in an alternative use. The Commission cites a study of Sydney Airport’s international car park which found the parking charges were lower than the land could earn if developed commercially.

The third piece of evidence is more straightforward. Much as I did in this post 18 months ago, the Commission examined the claim that parking comprises a much larger proportion of Melbourne Airport’s total revenue than it does at other airports. This is taken by some as incontrovertible evidence that Melbourne Airport is engaging in monopolistic pricing.

Melbourne Airport has a lot of parking spaces (20,029). This is double the number of the next largest airport in terms of parking (Perth), so it’s not surprising it earns a lot more revenue from this source than other airports. However, Melbourne earns an average of $12.70 per bay, per day. This is the same as Adelaide ($12.20) but considerably lower than Brisbane ($16.60) and Sydney ($21.50). The importance of parking in Melbourne Airport’s revenue stream is also larger because it has the lowest aeronautical charges per passenger of any of the five airports examined. Read the rest of this entry »

Is Avalon side-tracking Tullamarine rail?

Some famous faces spruiking Avalon Airport to Chinese investors

The Baillieu Government is determined to press on with its election commitment to start construction of the $250 million rail link to Avalon Airport in its first term. The Premier did this nice photo op last week waving-in planes at Avalon.

The Age reporter, Andrew Heasley, took a clever line, asking how the Government could commit to Avalon while spending just $6 million on a feasibility study for a rail line to Melbourne Airport. That produced this bizarre explanation from the State’s Aviation Minister, Gordon Rich-Phillips, who effectively said Avalon is going ahead because it’s easier:

There are challenges around an airport link for Melbourne ……Avalon is a clearer project than Melbourne in terms of the logistics associated with doing it. The reality is.…the lack of development around its [Avalon’s] immediate vicinity makes a lot of those logistics questions at Avalon easier than they are for Melbourne….. We have committed to work at Avalon and we’ve committed to feasibility at Melbourne. We don’t have a project for Melbourne [Airport], we have a feasibility study for Melbourne.

While I admire Mr Rich-Phillip’s unusual and possibly courageous frankness, I can’t see that ease matters more than need. Otherwise we’d build new schools where it’s cheapest rather than where the population is growing. Or the Government would be putting Protective Services Officers in retirement villages rather than on rail stations.

I won’t go into depth about what a silly idea the Avalon rail link is because I discussed it only a few weeks ago (Is the Avalon rail link Baillieu’s folly?). Suffice to say that Melbourne Airport is 22 km from the CBD, is the second busiest airport in the country, and has enormous scope for expansion; Avalon is 55 km away, has just six scheduled flights a day, and has enormous scope for expansion. Even if a rail line were built to Avalon, you’d have to wonder what the frequency, hours of operation and ongoing financial losses would be – it’s got to be sobering that Brisbane Airport’s train stops running at 8pm. I don’t have any problem with Avalon Airport per se, my worry is why taxpayers have to kick in when there are better uses our dollars could be put to.

This fascinating PR video produced to market Avalon to Chinese investors (see exhibit) shows what a cast of famous characters are backing Lindsay Fox’s Avalon venture, from the Prime Minister to the Lord Mayor. I know some gilding of the lily should be expected, but seriously Robert Doyle, how could you say “Avalon is the gateway to Melbourne” with a straight face? And as if, Lindsay Fox, travellers using Avalon could continue to get “on a plane in five minutes” if it really did grow to the size you imagine and hope it will?

What I didn’t know until I viewed the video is the Victorian Government, according to the Premier, has “committed to build a fuel pipeline for jets” to Avalon. This is all on the back of Avalon being “Melbourne’s second international airport”. As I’ve said before, it’s time we were given some explanation for what a second international airport actually means – is it something more than a place for motor racing teams and pop stars to land their cargos once a year? No one is going to seriously believe they’ll transport Ferraris to Albert Park or amplifiers to Rod Laver Arena by rail. What’s the logic behind it? We need a clear explanation – in terms of quantified benefits – of why governments are apparently prepared to spend hundreds of millions on infrastructure for Avalon.

Of course, construction of Avalon rail will have minimal practical effect on the need for a rail link to Melbourne Airport, although it could conceivably have a big effect on whether the Government feels obliged politically to proceed with the latter project. What they both have in common however is that no considered case has yet been made for either one. However The Age’s story – subsequently taken up as fact by these letter writers to the paper – implies that rail to Melbourne Airport is automatically a good idea. It’s certainly an infinitely better idea than rail to Avalon (what wouldn’t be?), but it’s by no means obvious that it’s needed now, as I’ve pointed out a number of times before (see Airports & Aviation in Categories list in the sidepane). Read the rest of this entry »

Is the Avalon rail link Baillieu’s folly?

In her famous book, The march of folly: from Troy to Vietnam, multiple Pulitzer Prize winning author Barbara Tuchman describes how governments sometimes persist, despite overwhelming evidence to the contrary, with policies that are against their own interests.

Ted Baillieu’s folly might be his Government’s unconditional election commitment to build a rail line to Avalon Airport. Handed the perfect opportunity to begin stepping backwards from the project by reports of Tiger Airway’s imminent withdrawal of all services from Avalon in favour of Tullamarine, the Premier was steadfast in his support for the Avalon link.

Although Tiger accounts for half of all Avalon’s airline business, the Premier is reported as saying that he doesn’t think a pull-out by Tiger would have any longer term implications for the airport. In another report, the Premier told The Age planning for the rail line would continue irrespective of what Tiger does:

The rail link is part of the development of Avalon and if you look at the numbers around Melbourne airport, there is going to be a need for a second international airport

No doubt there’ll come a day when Melbourne does need a second major airport, but as I’ve explained before, we’re a long, long way from that now. In fact spare airport capacity is one of the city’s great competitive strengths compared to arch-rival Sydney. If the Federal Government’s current investigations conclude that High Speed Rail between Sydney and Melbourne is viable, the warrant for a second major airport in this city would recede even further into the future. In any event, given the majority of Melbourne’s population lives south of the Yarra and will be for many years yet, it’s not obvious that locating an airport near Geelong would be the most sensible course to pursue.

Now is the time to be planning long-term for a future airport, not to be building the associated infrastructure – yet the Government has committed to starting construction of the Avalon rail link in its first term. Read the rest of this entry »

Is there a case for rail to Avalon Airport?

A bum rap

One of the great mysteries of 2010 is why the then Opposition promised to spend taxpayers funds to provide a rail service from the CBD to Avalon Airport. This wasn’t a promise to conduct a study, as was the case with the Doncaster, Rowville and Melbourne Airport rail lines, but a firm commitment to take action, with a minimum of $50 million to be spent in the first term of a Baillieu Government.

I’ve been scratching my head to come up with a rationale for this rail line, which Mr Baillieu says will cost $250 million. As I understand it, the Government will contribute the first $50 million and share the remaining $200 million with the Commonwealth and Lindsay Fox (although the size of each party’s contribution has not been revealed).

It’s hard to believe, with the range of other transport problems confronting Melbourne and a tight budgetary outlook, how this could even be on the table, much less be the Government’s highest priority.

The customary rationale for building a high capacity transport system is that current arrangements are approaching or exceed capacity. When I discussed this proposal during the election campaign last year, I noted there were only around 13 scheduled departures from Avalon on a weekday and that just 1.5 million passengers use the airport annually. This compares with 26 million using Tullamarine.These Airservices Australia figures indicate Melbourne Airport handles over twenty times as many aircraft movements as Avalon.  I went on to say:

If an Avalon train service performed at a level comparable with Brisbane’s Airtrain and captured 9% of current passengers, it would only carry 135,000 persons per year (an average of 370 per day). Skybus carries around 2 million passengers per annum.

Sita Coaches currently carries fewer than 200 passengers per day between Avalon and the CBD for $20 each. So on the face of it, it’s hard to see why public funds should be prioritised to an Avalon rail line for any reason whatsoever, much less ahead of Melbourne Airport (which is itself a long way from needing rail at this time).

One argument I’ve heard is that Avalon needs a rail line to expand its air cargo capacity. This sounds particularly unlikely to me. Just why customers would pay a large premium to send high value, low weight, high priority articles by air from interstate and overseas, only to then have them transported from Avalon to the CBD and beyond by rail, is a mystery. Couriers were invented to provide speed, flexibility and demand-responsiveness for just this sort of task. The owner of Avalon might want a rail line, but it’s not apparent that its purpose would primarily be to service air traffic. In any event, I’m not sure it would be a good idea for the taxpayer to fund rail for an airport operated by a company that has its own logistics operation.

Another possible argument for an Avalon rail line might be that Melbourne Airport has capacity constraints. This is probably the least convincing of any rationale. Melbourne Airport’s great advantage, especially compared to its key rival in Sydney, is that it has enormous potential for expansion and no curfew. It has a primary north-south runway and a secondary east-west runway with the potential to accommodate two further runways as well as additional operational areas, terminals, aviation support and commercial facilities. Read the rest of this entry »

Is the proposed airport train off the rails?

Royal wedding preview

The idea of a high-speed Melbourne Airport-to-CBD rail line is in the news yet again, this time advocated by the RACV.

You’ve got to give the Royal Automobile Club of Victoria its due. While simultaneously calling for roadworks to reduce congestion and improvements to traffic flow in Hoddle Street, it’s morphing into a general transport lobby group that “advocates improved transport services for all its members, including those who use public transport”.

This story on the RACV’s call for an airport train has attracted over 100 comments, most of them favouring a rail line. There’re the same themes that come up every time The Age runs pro-airport rail stories – it’s embarrassing that Melbourne doesn’t have a dedicated rail line; car parking prices at the airport are extortionary; Skybus fares cost an arm and a leg; the contract with Citylink won’t allow competition; and the airport and taxi industry won’t let anyone kill their golden goose.

Even while they approvingly cite the example of Sydney’s and Brisbane’s airport trains, commenters nevertheless generally assume an airport train would be high speed, would solve congestion on Melbourne’s freeways and would cost no more than a Zone 1-2 fare.

I’ve explained before why an airport rail line is unlikely to make sense for a while yet, but it’s a good idea to take another more considered view of its prospects than those advanced by unabashed boosters. Here’re twelve reasons why a rail line to Melbourne Airport is unlikely to make sense for a while yet.

First, Skybus already provides a dedicated public transport service from the airport to the CBD with higher frequencies and longer span of hours than any train service in Melbourne. Most times trips to Southern Cross station take 20 minutes. While they blow out to over 40 minutes in peak hour, that could be addressed for a fraction of the cost of a new rail line by extending the existing dedicated on-road lane to other sections of the route that are prone to congestion.

Second, there’s little to be gained from spending more than a billion dollars to replace a high quality public transport service (Skybus) with another one (train), when the money could be spent on providing better public transport to areas that don’t currently have adequate service.

Third, every study undertaken to date has concluded that a rail service isn’t warranted. It might be in the future but not yet. In the meantime, there is considerable potential to increase the capacity and speed of Skybus. As pointed out here, Brisbane’s south-east busway already carries 15,000 passengers per hour. Read the rest of this entry »

What should we do about the Airport?

Proposal for an orbital Bus Rapid Transit service

The key transport challenge at Melbourne Airport isn’t to build a rail line to the CBD. Rather, it’s how to move growing numbers of travellers from dispersed suburban locations to the airport and back again. Here’s a (speculative) idea about how that might be done.

This is a pressing issue because passenger movements through the airport are projected to increase from 26 million in 2009/10 to between 44 and 55 million by 2027/28. That’s potentially a doubling of demand within twenty years. On current settings, with 69% of trips to the airport made by private car and 17% by taxi, the outcome could either be gridlock or massive expansion of the freeway network.

Providing a high capacity connection between the airport and CBD is an important part of the answer but it won’t work for all those travellers whose journey starts or ends in homes and workplaces in the suburbs. Theoretically, they could take a train to Southern Cross and transfer there to the airport service, but they’d be unlikely to do that for a number of reasons.

First, the journey would take too long – travellers would have to walk, drive or bus to their nearest station, transfer to a train or tram, and transfer again at Southern Cross station. Second, parking is inadequate – many would seek to drive to their nearest station, but there’re severe constraints on expanding parking in built-up areas. Limited economies of scale mean it would also be hard to provide an acceptable level of security for cars parked overnight at Melbourne’s 200+ rail stations. In addition, baggage would be problematic on peak hour public transport, which wasn’t designed with this purpose in mind. There would be delays in loading and unloading trains, trams and buses at rush hour and suitcases in aisles would reduce capacity.

Trying to leverage the existing suburban rail system would, in short, be too hard. Most Melburnians would simply continue to drive to the airport, leading to worse congestion. They would apply intense political pressure to have the freeway network expanded.

I’d like to offer a different solution. I think two key actions will be needed over the next twenty or so years. The first is to restrict access by car to the airport – unless there is a positive disincentive to driving (something less damaging than congestion!), alternative modes will not be viable. The second is to move the effective entry to the airport to multiple locations in the suburbs. Here’s a broad schematic of how I think it might work:

  • Set charges that are high enough to discourage the great bulk of motorists from entering the airport or using the short term and long term car parks
  • Provide an orbital transit service running from the airport to the west and to the south east along (mostly) existing freeways – see map
  • Construct a small number of car parks with transit stations along this route, near freeway interchanges
  • Aim to operate at a frequency and span of hours at least comparable to that currently provided by Skybus.

Under this scenario, Melburnians could drive to the ring road, park in a secure facility, and board the airport transit service. It would be little different from using the current long term car park and shuttle bus – the only real difference is the car leg would be shorter and the transit leg longer (although the overall time should be faster!). I also envision that ‘farewellers and greeters’ and taxi users would mostly go no further than the nearest transit station. The idea is the stations would be the effective ‘entry’ to the airport. Read the rest of this entry »