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Business air travel yet to recover from mining slump

February 6, 2018 Headline News No Comments Email Email

The end of the mining boom took the steam out of business air travel in Australia to such an extent that strong economic growth over the past seven years has not been enough to compensate.

The two key mining states of Western Australia and Queensland experienced substantial decreases in business air travellers.

2.2 million Australians travelled by air for business purposes in 2017, equivalent to 11% of the population, however this was down a significant 1.3 percentage points since the height of the mining boom in 2010.

While that might seem a surprise in an economy that has experienced strong economic growth over the past seven years, deeper analysis by state reveals a substantial part of this fall has been concentrated in the mining states of WA (in which 11.6% of the population were business air travellers last year, down 4.1% since 2010) and Queensland (in which business air travel is down 3.9% to 10.2%).

Business Air Travel Destinations by State or Territory (2010 – 2017)

The prevalence of so-called “FIFO” workers (Fly-In-Fly-Out) in the mining industry has clearly declined significantly over the last few years as big mining projects have been completed and the workforce required to maintain operations is invariably lower than that required to ‘kick-start’ a new project initially.

Analysing the destinations for business air travellers over the past seven years shows that New South Wales has gained a significantly greater share of business air travellers now at 29.3% of business air travellers by destination up 4.4% since 2010.

However, although Western Australia is down the most, by 2.4% to 9.7% of business air travellers in 2017, other States including Victoria, Queensland and South Australia have all fallen over the past seven years by lesser amounts.

Commenting on the findings, Roy Morgan chief executive Michele Levine said the end of the mining boom hit many industries hard and the drop in FIFO workers employed at resource projects in Western Australia had an impact on airlines flying to WA that they had not been able to make up from elsewhere.

Business Air Travellers by State (2010 v 2017)

“Detailed analysis of trends in business travel in Australia show total business air travellers remained relatively static over the past seven years despite the significant increase in Australia’s overall population,” Levine said.

“In 2017, 11% of Australians, or 2.2 million people, travelled by air for business, down from a high of 12.3% in 2010-11, equivalent to 2.24 million people, at the height of the mining boom. WA business air travellers, which includes the so-called FIFO workers, led the drop, down 4.1 percentage points to 11.6%, from a high of 15.7% in 2010.

“Other States also dropped during the period by lesser amounts with Victoria the only State to experience an increase in business air travellers, up 0.3 percentage points to 10.5% –figure still significantly below the national average.

“Although the overall number of business air travellers around Australia was relatively unchanged over the past seven years far more business air travellers, now 29.3% up 4.4%, are heading to NSW. The rise of NSW as a business destination hasn’t only come at the expense of WA with Victoria, Queensland and South Australia all losing ground as destinations since 2010.”

Edited by Peter Needham

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