MILDURA Airport expects its existing terminal to reach capacity within 24 months as demand for travel increases and as cut-price carrier Bonza enters the Australian aviation market.
However, the airport does not expect to return to profit until the 2024-25 financial year after three years of losses, totalling more than $3 million, during the COVID-19 pandemic.
The airport expects passenger numbers will reach “well over” 300,000 within the next two years with the arrival of Bonza’s initial routes to the Sunshine Coast and Melbourne and a further destination expected by next June.
The number of Mildura passengers in March and April this year was the highest it has been since the pandemic began, with May and June figures tipped to go even higher.
Airport chief executive Trevor Willcock said he expected 25 to 30 per cent more passengers to and from the airport with the arrival of Bonza and travel high on the agenda for many people.
He said travel had rebounded “fairly strongly” over the past few months with a sharp increase in passenger numbers coinciding with last year’s Christmas holidays and the end of lockdowns.
Passenger traffic had since remained steady, he said.
However, he said airports had been one of the worst affected areas during the pandemic, with Mildura Airport facing losses in the vicinity of $3.3 million over three years.
After recording a $1.4 million profit in 2020-21, the airport has forecast losses, including depreciation, to be in the order of $1.27 million in 2021-22, $1.5 million in 2022-23 and about $500,000 in 2023-24.
Mr Willcock said the airport was running at about 70 per cent of pre-COVID traveller numbers after Virgin Australia axed its Melbourne-Mildura route in September 2020.
He said about 13,500 passengers passed through the airport in both March and April, when the pre-COVID tally would normally have been about 20,000.
“The 13,000 passenger mark a month is our cash break-even point at this stage, so we’ve hit that and the next step is to get back into a profitable situation,” Mr Willcock said.
“Qantas and Rex are pretty much doing the numbers they used to do before the lockdowns and with the two Bonza routes opening up – and then the third one mid-next year – we should exceed our pre-COVID passenger numbers by 2023-24, but hopefully sooner,” he said.
“If you took depreciation out of our expenses, we’re in a cash-positive position, but only just – we’re not making profits, but we’re not burning any more cash.”
Mr Willcock said he expected airport management and Bonza would engage in discussions about the third route once it began operating the initial two routes, expected in September.
“It’s all part of the package that they have to open a third route within 12 months to a new destination, so that’s still to be negotiated.
“I’m assuming it will be another Queensland destination – it could be something like Cairns – but it could even be a Canberra-Mildura route, so there are a number of options.”
Mr Willcock said with connections to Adelaide, Melbourne, Sydney and the Sunshine Coast to follow, the airport terminal could reach capacity within two years.
“I think Bonza will really help get us back to where we need to be,” he said.
“The terminal is designed for 350,000 passengers a year, and I believe we will hit that in the next 24 months, so there could be a terminal expansion in the not too-distant future.”
The airport is also planning to replace the 50-year-old runway, apron and taxiway lighting with LED lighting at a cost of about $2 million and resurface the secondary runway at a further $1.5 million outlay.
Mr Willcock said he expected the arrival of Bonza would be good news for air passengers, who would have more choice of routes and better control over ticket pricing.
The Australian Consumer and Competition Commission said it would monitor how existing airlines reacted to new competition, including by seeking information from the airlines to understand their strategic responses to Bonza.
