Avalon Airport, including International Terminal

Economic Development Pillar

The Opportunity

Avalon Airport is seeking to expand its domestic operations and commence international passenger operations, which will provide a range of significant economic advantages to the G21 region.

Avalon Airport’s geographic location between Melbourne and Geelong makes it both a capital city airport and an exceptionally well-equipped regional airport, servicing a large catchment in western Victoria and providing connections to significant tourism destinations such as the Great Ocean Rd.

Growth in domestic passenger numbers throughout Australia has been strong over the past decade, and Tourism Research Australia forecasts a steady increase (1 per cent annually) that will continue over the coming decade. The vast distance between major population centres and the absence of a rapid intercity rail network virtually guarantees that the domestic market will continue to grow.

International visitation forecasts also indicate a healthy outlook for the aviation industry over the coming decade, with a projected increase of 2.3 million international travellers annually by 2019.

This highlights Avalon Airport’s expansion opportunities. As a major tourism destination within Australia, the G21 region requires convenient access via a fully functioning Avalon Airport for domestic and international travellers. They, in turn, will provide a valuable boost to regional tourism and the economy.

Jetstar has committed to operate from Avalon Airport, with an agreement that will see passenger services expand over the next 10 years. As part of the agreement, over the next 18 months Jetstar will increase the number of flights from five to seven per day and fly to two new domestic destinations. This marks a strong partnership that will secure the future of Avalon Airport and its workers for the next decade.

It will also lay the groundwork for future expansion that will cement Avalon Airport as Victoria’s second major passenger airport, including with future international carriers.

Avalon Airport is actively seeking to expand its passenger operations’ capability and introduce international flights.  Once an overseas carrier is confirmed, Australian Customs Service and Australian Quarantine and Inspection Service facilities will need to be established. This will require federal support.

There are further opportunities for the expansion of Avalon Airport including:

  • Freight services - Avalon Airport’s location, accessibility and capacity can support a significant number of specialist freight operations.
  • Engineering and maintenance – Avalon Airport can accommodate large heavy-maintenance facilities and infrastructure.
  • Retail/commercial services - including hotel, rail link, service station, industrial activities, commercial offices and retail facilities.

The airport is privately owned and operates as a commercial venture. The Avalon Airport international terminal and other retail/commercial services are budgeted and accounted for through private investment.

Project Aim

To support the continuation and expansion of domestic services from Avalon Airport

This will require assistance from both federal and state governments.

The State Government provides incentives for airlines to base aircraft in Victoria. However, this assistance needs to be increased to encourage airlines to better utilise Avalon Airport as Victoria’s newest airport.

The Federal Government and its fully owned aviation organisations such as Airservices Australia, should work to ensure Avalon Airport is provided with a fair platform to compete for domestic services. This includes ensuring pricing for services such as air traffic control, firefighting services and policing does not adversely impact Avalon Airport.

To support the development of Avalon Airport as an international passenger airport and in gaining international carriers

This will require both federal and state government assistance.

The State Government provides incentives for international airlines to operate in Victoria. Continued marketing assistance is required to develop Avalon as an international carrier.

The Federal Government has committed to funding the development of a new international terminal in the event Avalon secures an agreement with an international airline.

The Federal Government can also assist Avalon Airport’s international endeavours by providing appropriate border agency services (as required), priced so not to disadvantage Avalon Airport against its competitors. Under current practice some costs would be charged to Avalon Airport (or its airlines) where this does not occur at Tullamarine Airport.

The airport also has a large retail and commercial precinct which also has the potential to drive regional employment.

Project Champion

Justin Giddings, Chief Executive Officer, Avalon Airport

What has been committed

The Federal Government:

  • has approved a variation of the airport lease which will fast track a new international airport terminal provided the works do not exceed 10,000 square metres and cost more than $15 million
  • has committed funding for a new international terminal triggered by Avalon Airport securing an agreement with an international airline
  • will re-classify Avalon Airport to make it eligible for benefits associated under the current Regional Airport Package
  • has approved the Avalon Airport Masterplan.

The State Government has committed:

  • $12 million over 10 years to ensure Jetstar continues and expands passenger services operations at Avalon Airport
  • $2.7 million to progress development of an Airport Precinct Master Plan
  • to support Avalon Airport as the host of the Australian International Airshow until 2025
  • to support the development of Geelong as an international aerospace, defence and aviation hub.

What is required

A Federal Government commitment to:

  • provide border agencies once an international airline commits to operate at Avalon Airport
  • standardise border agency and Airservices’ charges equal to the rates charged at Tullamarine
  • assist Avalon Airport in attracting an international carrier.

A State Government commitment to:

  • support the introduction of new businesses into the Avalon Airport hangar heavy maintenance facility
  • assist in the realisation of the commercial/retail precinct
  • continued marketing support to attract tourism to the area utilising Avalon Airport’s services
  • assist Avalon Airport in attracting an international carrier.