Airport Forward Capacity

The Cairns Airport numbers for December come with forward forecasts

First mover advantage on commentary is ceded to the Cairns Post.

Cairns Airport

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Queensland’s flaccid regions

Conus: Regional Building Approvals data shows the regions trailing off

Conus Trend approvals in Greater Brisbane for Nov stood at 2,008 (unchanged from Oct) and up 17.7% from the same time a year ago. In the Rest of Queensland the story was very different with Trend approvals at 1,334 (down from 1,376 in Oct), down 18.8% year on year and the lowest since March 2015.

The aggregated regional data for Rest of Queensland ex Brisbane from the ABS is also heavily influenced by Gold Coast as the largest region (with about a third of approvals currently) and Sunshine Coast as next largest.  A comparison over the series between Cairns and Gold Coast:

Approvals1

I always like to aggregate Brisbane, Gold Coast and Sunshine Coast into SEQ for comparison with the remaining ‘Bush’ regions. The Bush here is now at an all time low for the series since 2001:

Approvals2

A closer look over time at those flaccid regions:

Approvals3

Source data is Conus Trend from ABS SA4.

Over & out Auckland

AFR: Auckland International Airport finds buyer for Cairns Airport stake

The deal values Cairns Airport’s equity at $NZ1.51 billion ($1.38 billion), which is about 20-times forecast profit based on earnings forecast estimates by Kiwi stockbroker Forsyth Barr.
As Street Talk reported last week, Auckland International Airport has had First NZ/Credit Suisse marketing its stake recently, as part of a strategic review. The company told shareholders earlier this month that it had seen “strong buyer interest” in the non-core asset, and it was progressing plans to sell its holding.
North Queensland Airports owns Cairns Airport – Australia’s seventh largest airport by annual passenger numbers – and Mackay Airport.
North Queensland Airports reported $142.7 million revenue and a $46.8 million net profit after tax in the year to June 30, according to AIA’s annual report.

 

Will have to check back through AIA disclosures to verify but not a bad return over seven years since January 2010 if these media reports are accurate: Auckland Airport buys stake in North Queensland Airports

AUCKLAND International Airport said today it has agreed to purchase a 24.6 per cent stake in North Queensland Airports from Westpac Bank.
The Auckland-based company said the stake in North Queensland Airports, which operates the Cairns and Mackay airports in Queensland, will cost approximately NZ$166 million (A$132m).

This sale transaction is valued at A$370 million for the 24.6% AIA stake. Well at least we funded a hospital expansion from the privatisation proceeds of A$530 million in December 2008.

 

Entertainment in the City

Bates wants Courthouse Hotel reopened as a pub

Cairns Regional Council bought the heritage-listed former law court and pub for $5.75 million in late-2016 with plans to transform it into the centrepiece of a world-class arts precinct.
Those moves are still underway, and it took about six months for the sale to be finalised, but the venue has sat dormant for more than a year.

Meanwhile, Pokie revenue in Cairns CBD has been growing strongly in recent months despite removal of the 35 Courthouse Hotel machines from trade. The Barrier Reef also continues to trade restricted hours I believe.

Mug Punters

Note: Win here is a win for the pokie not the punter! Numbers are ex Casino for Cairns City SA2.

 

Quarterly rental data: nascent transition?

December quarter rental bond data from the RTA was pretty quiet in NQ but underlying trend changes continue to consolidate.

Rental December1

The largest overlap between tropical regional capitals with quite different housing stocks is three bedroom houses. Nothing went anywhere much. Cairns couldn’t push higher despite the continual media spin on tight vacancy rates as a goog thing. Townsville and Mackay continue to show evidence of a base and potential recovery.

Rental December2

Too early to call a trend change but difficult to see how this can continue to expand.

Lots of good stuff to explore in the RTA bond data which I really need to get around to. Particularly the number of outstanding bonds and new bonds for the quarter. However it’s a little known fact* that before employment all public servants are required to complete a course in how to make excel spreadsheets less useful so this could take some time.

*May be an alternative fact.

Dry New Year

The BOM weather station at Cairns Aero is now on the verge of reporting 13 straight dry days to end 2017. While there have been some fleeting sprinkles around the suburbs these have not been enough to trouble the Cairns City scorer.

In context: December average = 178mm. December 2017 = 26.8. This is how the seasonality works:

Metereology1

What it looks like in a longer term perspective with an annual moving average:

Metereology2

Meanwhile, in the northern hemisphere: Typhoon Tembin

It’s an interesting situation and consistent with the most recent BOM Weekly Tropical Climate Note due to be updated again this week after a festive break.

Update at Weekly Tropical Climate Note:

Australian monsoon onset unlikely in next week
While the monsoon trough briefly influenced the north Western Australia coast in association with tropical cyclone Hilda, northern Australia is yet to experience broadscale monsoonal flow this wet season. By convention, the Australian monsoon onset date occurs when the onset is observed at Darwin. Therefore, by this definition, the Australian monsoon onset has yet to occur—the last time the onset date was this late was during the 2011–12 wet season.
One factor contributing to the delayed start of the Australian monsoon is the continuing tropical activity in the northern hemisphere. A late-season near-equatorial trough persists in the northern hemisphere, extending from a developing low near the Philippines to another weaker tropical low in the Bay of Bengal. This trough lessens the likelihood of monsoonal flow developing in the Australian region, by deflecting energy associated with cross-equatorial flow from the South China Sea. This flow from the South China Sea ideally would energise a southern hemisphere monsoon trough and thereby assist in initiating the northern Australian monsoon onset.
The tropical depression near the Philippines may reach tropical cyclone strength in the next few days as it moves towards Vietnam. For tropical cyclone information in this region please see the Japan Meteorological Agency webpage here.

Airport: low altitude, low turbulence

November is typically an unexceptional month falling between peak season and Christmas and it was mostly unexceptional again this year. Domestic was up 2.1% on the previous year while International was up 0.6%.

Airport Nov 2Airport Nov 1

Commentary from Cairns Airport:

Interstate passenger growth of 0.5% was moderated by reductions on Adelaide, Darwin and Perth. Intra Queensland routes increased 6% due to strong Brisbane and regional growth, particularly on routes in support of mine operations and construction projects.

The Airport has previously commented on increased activity to Weipa. Some of this would fall in transits which are excluded in my numbers. Transits and transfers are lumped together both domestic and international. This was actually down -2% for the month and changes to the Cathay Pacific service may also be having some impact here.

Recent monthly numbers have been quite stable compared to the seasonally volatile first half. Chinese New Year moves a few weeks later into February in 2018 while Easter moves a few weeks earlier to the start of April.

Source: Cairns Airport

 

IVS fails to impress

The International Visitor Survey for the September 2017 quarter has failed to impress: IVS highlights problems for QLD and TNQ .

This is annual growth in international numbers for the leading 24 tourism regions with visitor numbers above 100,000 p.a.

IVS2

This is also where we should post a warning on sample sizes and margins for error as regions get smaller. Number of international visitors by region:

IVS1

Central Queensland is particularly interesting. Visitor nights allegedly increased by 37.8% while expenditure decreased by 34.7%. This leaves CQ a distant last on spend per night to an extent which could imply international visitors to CQ are living in poverty during their stay. Perhaps they are backpacking fruit pickers? Fraser Coast was second last.

Bigger is better in sample numbers so I think it is the key numbers for Queensland and Australia which highlight the problem. International visitors by category:

 

Queensland is actually doing ok in the fast growing education sector up 18%. Where it is not doing ok is in the dominant tourism holiday sector with growth at 3.0% well below national growth at 5.1%. Also concerning is that while holiday numbers are growing at 5.1% for Australia, expenditure per trip is actually down -0.3%.

Kate Jones remains tourism minister. Apparently there is a new political policy in Brisbane to make cabinet appointments based on performance and not factions.

 

Gordonvale too far away

To follow up on the previous post and comment on employment accessibility by car, geographical factors could also come into play. The regional cities in the framework report are defined by the SUA (Significant Urban Area) from the ABS. While the Gordonvale SA2 in included in the Cairns-South SA3 it is excluded from the Cairns SUA.

The regions of the SUA structure are constructed from whole SA2s. They are clusters of one or more contiguous SA2s containing one or more related Urban Centres joined using the following criteria:
they are in the same labour market
they contain related Urban Centres where the edges of the Urban Centres are less than 5km apart defined by road distance
they have an aggregate urban population exceeding 10,000 persons
at least one of the related Urban Centres has an urban population of 7,000 persons or more.

Measured by the road distance criteria Gordonvale Urban UCL (which starts at Draper Rd) is 7km from the Edmonton boundary so is 2k too far away.

Transport2

The SA2 boundary is the green line. So the exclusion of Gordonvale leaves out one of the faster growing suburbs and the entire Mt Peter planned precinct. Gordonvale SA2 was second only to Trinity Beach – Smithfield for residential building approvals in 2016/2017. I would have thought this a not insignificant (sic) problem in the context of the objectives.

This situation appears not to apply in this way to other regional centres like Townsville and Toowoomba where the contiguous SA2’s can extend well beyond the urban area. Yes, I am cynical (as always) about the position of Townsville in the traffic and jobs analysis. I’m sure getting in and out of the city from the suburbs at peak times can be an issue just as it is here and elsewhere. However, Google Maps tells me a keen worker can get from outer southern Kelso up to Rollingstone to pick pineapples faster than you can drive from one end of Cairns to the other. Consequently I am sceptical of the methodology and its value.

While the regional cities are ahead of the capitals for car accessibility they are often lacking in public transport.  The geography of Cairns and location of facilities can also come into play here. This is the Sunbus journey planner to get from Gordonvale to the JCU campus at Smithfield:

Transport1

Hmmm. Best to drive which Google Maps says will only take 41 minutes along the western arterial route in normal traffic.

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