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Speaker 1: Now, when we talk about airlines and we talk about

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Speaker 1: well seats, high load factors are critical for successful low

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Speaker 1: cost airline operations. But unfortunately Australia's Northern territory us here

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Speaker 1: in the end, we've consistently had the nation's lowest average

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Speaker 1: load factors. On average, one in three seats go empty,

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Speaker 1: or just over one million per year. Now joining me

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Speaker 1: in the studio to talk more about this is aviation

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Speaker 1: expert Bruce Dale. Good morning to.

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Speaker 2: You, Good morning Katie, and good morning listeners. It's great

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Speaker 2: to be back.

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Speaker 1: Yeah, lovely to have you in the studio. Now, Bruce,

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Speaker 1: tell me more about this data and where it was obtained.

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Speaker 2: Okay, certainly I'm a data nerds, so I hope I know.

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Speaker 2: Let's make this interesting. So there's two sources of data.

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Speaker 2: First of all, I was looking at the airport passenger

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Speaker 2: data which is published by the Australian governments. There's a

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Speaker 2: wealth of data which the government, federal government does provide.

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Speaker 2: And then I looked at the seats, which is obtained

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Speaker 2: from information sources which the aviation industry uses. That's based

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Speaker 2: on the scheduled flights and they know there's a flight

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Speaker 2: with one hundred seats. It community gets adds up over

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Speaker 2: the year and then you just look at the difference

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Speaker 2: this many passengers, this many seats, and this tells you

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Speaker 2: on average how full the flights are.

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Speaker 1: So, how are we tracking in the Northern Territory?

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Speaker 2: Okay? Compared to other jurisdictions states, Unfortunately Australia has a

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Speaker 2: territory problem. We are similar to the Capital Territory which

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Speaker 2: has again nearly one in three seats going empty. And

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Speaker 2: that's the only other jurisdiction which also had to decline

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Speaker 2: in seats over the past decade. Everywhere else the seats

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Speaker 2: were increasing in line with population except for Tasmania. That

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Speaker 2: was a wonderful standout performer because Tasmania really engaged how

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Speaker 2: it wanted visitors to come and see the state, and

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Speaker 2: that when gang buses that had forty four percent seat

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Speaker 2: growth over the same period.

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Speaker 1: And so is that do you reckon just because of

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Speaker 1: tourism that they've gone off?

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Speaker 2: Basically absolutely, the number of seats was blue so compared

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Speaker 2: to population was out of the water. They've made Tazzy

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Speaker 2: a fantastic place to come during the winter season. You know,

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Speaker 2: you've got dark mofo, all the food, you know Tasi

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Speaker 2: is suddenly it's not a cold place, it's the cool

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Speaker 2: place to visit, and that goes to show you what

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Speaker 2: it can be done if you have a real tourism focus,

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Speaker 2: transformation of a destination the way people talk about you.

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Speaker 1: Yeah, and I suppose we've tried to do it here

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Speaker 1: in different ways in terms of marketing ourselves during the

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Speaker 1: wet season and that kind of thing. But like you're right,

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Speaker 1: Tasmania it's absolutely taken off, Yes it has, so I

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Speaker 1: suppose we're going to have to maybe think about how

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Speaker 1: we do things differently. But tell us in terms of

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Speaker 1: those low load factors, what do they mean and what

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Speaker 1: kind of impact do they have.

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Speaker 2: Certainly, the way you need to think about the cost

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Speaker 2: of an airline ticket is how many empty or cheap

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Speaker 2: seats am I actually paying for. It's a different way

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Speaker 2: of flicking around. People think if I'm paying for my

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Speaker 2: seat as actually no, because it's it's like if you say,

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Speaker 2: have a taxi rider or an uber if you've got

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Speaker 2: one hundred dollars you know cost, and you're going to

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Speaker 2: share it with five friends. The more friends that peel

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Speaker 2: off because they get a better offer during the night,

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Speaker 2: the higher the cost it's going to be for you.

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Speaker 2: So if you end up with some Nigel No mates

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Speaker 2: footing the bill for a hundred dollars, it's exactly the

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Speaker 2: same principle.

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Speaker 1: They're right, So if the plane is full, it means

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Speaker 1: that those prices are going to be lower, and that's

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Speaker 1: what the airlines take into consideration.

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Speaker 2: Absolutely when they're like any business, if you know how

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Speaker 2: many customers you're going to get through, they're going to

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Speaker 2: set their prices for how many customers they know they

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Speaker 2: can attract. So by getting more customers through, that lowers

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Speaker 2: the breakeven fair, the break even point, and they do

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Speaker 2: pass those savings on because they want to actually stimulate

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Speaker 2: the markers that normally would mean more revenue for them

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Speaker 2: and more profitability.

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Speaker 1: I suppose some people might be listening thinking, well, I

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Speaker 1: got on a plane, you know, to Sydney and it

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Speaker 1: was absolutely chalkers. But the thing is there may not

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Speaker 1: be as many of those aircraft actually flying there at

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Speaker 1: this point. Is that correct?

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Speaker 2: Yes, So this is looking over the data over a

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Speaker 2: whole year. It's a bit like saying, okay, what is

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Speaker 2: how busy is tiger jen and drive? If you only

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Speaker 2: see it during the peak hours. You think it's absolutely

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Speaker 2: we crazy, we need to be spending more. But if

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Speaker 2: you drive you know, out of Darwin or the off

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Speaker 2: peak times eight, it's absolutely empty. And it's like any

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Speaker 2: business like that, it's seasonal, goes up and down. So

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Speaker 2: this is the collective data. Yes, of course there's going

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Speaker 2: to be some flights which go full, but then other

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Speaker 2: times of the year they're almost flying empty.

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Speaker 1: So just remind us, well, just sort of tell us

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Speaker 1: again in terms of those seats, So we're talking like

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Speaker 1: one in three is that correct?

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Speaker 2: Correct? So that's nearly one over one million. And the

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Speaker 2: other real impact on the territory is actually how long

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Speaker 2: our flights are. Yeh, we have the longest I would

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Speaker 2: say average flight length in Australia. It comes out about

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Speaker 2: twenty two hundred kilometers. So of course I'm looking at

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Speaker 2: Alice Springs. I know there's lots of people who listen

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Speaker 2: on your heart app and everything like that, so you'll

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Speaker 2: get a down there yea, and Darwin. So that average

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Speaker 2: t two hundred lolometers. When you multiply that by one

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Speaker 2: million seats, it actually ends up as two point two

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Speaker 2: billion seat kilometers. Now that's a huge number. How do

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Speaker 2: you explained.

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Speaker 1: I was just thinking, how do I wrap my head

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Speaker 1: around that.

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Speaker 2: It's actually the same as every single northbound flight from

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Speaker 2: Sydney to Brisbane going empty for a full year. Wow,

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Speaker 2: that is the scale of flying.

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Speaker 1: So what impact then does that have on us in

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Speaker 1: terms of our airlines and particularly you know the new

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Speaker 1: one that's into the market, bondser for example.

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Speaker 2: They look very carefully at Dale. We actually have a

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Speaker 2: northern territory. We have a disproportionate potential to have a

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Speaker 2: disproportionate impact on their bottom line because it's so big.

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Speaker 2: So when you have any low cost airline, they want

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Speaker 2: to fill their seats up to at least eighty eighty

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Speaker 2: five percent because they work on a volume based trend

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Speaker 2: business model. Absolutely during the peak periods they can do

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Speaker 2: that Christmas time, dry season, The question comes can that

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Speaker 2: actually happen in the wet season. The good news for

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Speaker 2: BONSA is the stats show that we've actually lost about

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Speaker 2: seven hundred thousand low cost seats, so there's an opportunity

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Speaker 2: in the market that's given them the confidence to fly.

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Speaker 2: Now try new things and try and open up new

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Speaker 2: new markets such as the Gold Coast or Sunny Coast

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Speaker 2: from Darwin and of course provide competition, low cost competition

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Speaker 2: down in Melbourne.

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Speaker 1: And then what does it mean for our existing airlines,

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Speaker 1: you know, the likes of jetst, the likes of Quantus

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Speaker 1: and North the ones that we've already got operating.

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Speaker 2: Yeah, they they do anything. It's like any business. They

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Speaker 2: will look at what they estimate the competitions doing and

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Speaker 2: respond according to what they value. I mean some might

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Speaker 2: want to compete, some might want to lower prices, others

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Speaker 2: they might even choose you know, good luck to them.

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Speaker 2: We've seen the market. Until we get international visitors coming back,

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Speaker 2: it's going to be challenging.

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Speaker 1: Yeah.

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Speaker 2: Yeah, that's what competition is about.

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Speaker 1: And so what's the answer do you think? You know,

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Speaker 1: in your space of aviation, what is the answer here

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Speaker 1: is it? You know, to be like Tazzy, we've got

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Speaker 1: to be marketing ourselves differently. We've got to get more

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Speaker 1: bums on and get them into the territory.

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Speaker 2: Absolutely, for me, that is what was always driven changes

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Speaker 2: in aviation markets. It's actually what happens in the destination.

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Speaker 2: Being absolutely positive about what there is to come and

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Speaker 2: see and do. I think particularly in Darwin in the

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Speaker 2: wet season, I always joke to people that ask me

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Speaker 2: what time is the best year to come, and I say, well,

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Speaker 2: you've got two options. I can say, you come in

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Speaker 2: the cool season when we have all that cool festivals

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Speaker 2: we have, you know, all the cooler weather, or you

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Speaker 2: come in the pool season, because what is better about

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Speaker 2: some of them diving into a lovely cool and it's

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Speaker 2: really focused on what we can deliver to our guests.

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Speaker 1: Yeah, that's true.

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Speaker 2: Yeah, we can't actually say let's go to Kakadoo. It

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Speaker 2: might close down. We all accept that that's what we

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Speaker 2: have to deal with. So let's focus on what we've

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Speaker 2: got to work with and make it fun and let's

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Speaker 2: talk about let's talk.

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Speaker 1: It up actually yeah, yeah, which I been really yeah, absolutely,

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Speaker 1: And if it's with your family and friends and that

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Speaker 1: kind of thing, you can be quite realistic about it

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Speaker 1: and so hey, you know it's going to be warm.

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Speaker 1: But these are the different things that we can do. Now,

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Speaker 1: what about into some of the fees and services and

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Speaker 1: things like that that the airlines have to pay. I mean,

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Speaker 1: is there ways in which there could be movement from that?

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Speaker 1: I know, the government and outsaer aviation. Oh, I can't

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Speaker 1: remember what we thought. That's it. That was the words

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Speaker 1: I'm looking for. They'd announced that a little while ago,

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Speaker 1: but you know, I guess they're potentially not going to

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Speaker 1: be able to do that forever. So what are the

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Speaker 1: different things that could potentially change to try to get

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Speaker 1: more bums on seats or to lower those prices.

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Speaker 2: I think they're working in the right area, which is

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Speaker 2: tourism marketing. They do some aer Differently campaign which won

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Speaker 2: an award for doing something successful, So huge shout out

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Speaker 2: to the team at Tourism NT for doing that. It's

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Speaker 2: actually creating the demand because if we think about it,

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Speaker 2: in the dry season, we can fill up our hotels,

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Speaker 2: we can fill up our airline seats at prices which

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Speaker 2: reflect that we're a bucketles destination of people willing to

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Speaker 2: pay them a premium for it. So what goes so

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Speaker 2: different in the wet season. We're still just the same

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Speaker 2: great place to visit. So what I mean, what would

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Speaker 2: life be without rain? Think of every romantic movie here

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Speaker 2: and Heroin they get together and meet under a rainstorm.

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Speaker 2: You know, the Indians celebrate the arrival of them monsoon.

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Speaker 2: They does so much to celebrate about the lids. So yeah,

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Speaker 2: it's yeah, it's not a for me.

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Speaker 1: Embrace the web, change our minds well, change the way

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Speaker 1: we think a little bit shat, get romantic and wet

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Speaker 1: you Bruce, I love it good to catch up with you.

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Speaker 1: As always. I really appreciate your time and appreciate your

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Speaker 1: insight when we talk about, you know, the ways in

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Speaker 1: which the airlines operate and the costs sometimes that we're

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Speaker 1: having to deal with as well.

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Speaker 2: Fantastic Thank you for your time, Katie, Thank you, Thanks

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Speaker 2: so much,