Article: Cut airport rail costs, top tourist body urges

[somebody]

Cut airport rail costs, top tourist body urges

Date
    January 28, 2013

Jacob Saulwick
Transport Reporter

Commuters waiting for a train at the Domestic airport terminal Railway station that was built for the 2000 Sydney Olympic

Overpriced ... the cost of travelling to the CBD from the airport is one of the most expensive airport trips in the world, according to a TTF survey. Photo: Brendan Esposito

THE tourism industry is renewing a push for the government to cut the price of tickets on the airport rail line, which charges passengers an extra $12.30 for every trip.

A report by the Tourism and Transport Forum claims the cost of travelling to the CBD from the airport works out, per kilometre, to be one of the most expensive airport trips in the world - about $2 a kilometre.

A TTF survey of global cities found it costs less than $1 a kilometre to travel to the centre of the city from airports servicing Paris, Beijing, New York, Melbourne, Copenhagen, Brussels and London.

''First impressions are important,'' the deputy chief executive of the TTF, Trent Zimmerman, said. ''Particularly for the price-sensitive market, to get to the platform and find it costs an extra $12.30 - that does not create a great first impression.''
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Any reform of ticket prices to the two private airport stations would not come cheap. In 2011, the NSW Parliamentary Budget Office put the cost of buying out the stations at $276 million.

The O'Farrell government's adviser, Infrastructure NSW, recommended cutting the cost of travel at the airport stations.

''It is costly but, in the absence of anything else you can do to dramatically improve capacity around the airport, it makes such good sense it is hard [to imagine] it can be resisted forever,'' Mr Zimmerman said.

Travel between Mascot station, where there is no extra station access fee, and Town Hall costs $3.60 an adult ticket. Travel between the domestic airport station and Town Hall costs $15.90.

The Transport Minister, Gladys Berejiklian, said it was not government policy to buy out the airport rail line.

Read more: http://www.smh.com.au/travel/travel-news/cut-airport-rail-costs-top-tourist-body-urges-20130127-2deym.html#ixzz2JEoLNrMY

$276m is nothing if you ask me.
Shadow charge for using Green Square & Mascot = $37k/weekday
Station access fee for Domestic & Intl = $178k/weekday

Ball park figure of income = $65 million p.a.

Something is wrong here.

[somebody]

No Shane, available evidence suggests that such an acquisition would be very strongly earnings accretive.  Hence my comment that something isn't right.

None of your other suggestions will make as much difference for the $ spent.

What you are suggesting is that the market should be surrendered to taxis.  With 2 people in the taxi, it is actually cheaper to reach a sizeable portion of Sydney.  The CBD is especially expensive to reach on the train.

You can still use the 400 bus to Bondi Junction or Burwood.  You can't use a bus to the CBD.

[somebody]

I didn't say to just have standard Cityrail fares.  Most airport services charge some kind of surcharge.  Costings I posted above assumed no change to fares.  Let's try it again assuming $10 is sliced off the fares:

$37k/weekday from Green Sq+Mascot (shadow surcharge is currently being paid by the govt to Airportlink)
$33k/weekday from Airport

= $21m p.a. Still an economic return at a government's borrowing rate.

I'd expect if fares were as cheap as that patronage could easily triple.  That makes the take for the govt about $50m p.a. more.

It wasn't as economic for Airportlink to drop the fare as they didn't collect the flag fall or the fare from the suburbs.  Only the surcharge.

[#Metro]

There is a simple fix. departure tax on aircraft landing and takeoff at sydney and include a portion of the rail fare in the price.

[HappyTrainGuy]

Make it a simple ticket that you buy. No need to add confusion about having plane tickets, boarding passes and if you can travel this far using it. If I want a cheap ass flight I don't want to be slugged extra for a service that I might not even end up using. Make it a good price either by intergrating it with normal ticketing prices or by adding an additional surchage on top of normal ticketing. It should be pretty easy to do on their Opal system just like we have here with the GoCard. It should be very simple fix. If they don't buy it out then do what they have done here (ticketing wise). Its a private line so expect to pay whatever the operator wants to charge.

[somebody]

The problem is that the operator chooses to price it far too expensively, particularly for CBD bound journeys.  You can't (or shouldn't) tell them what price they have to set the fares at.  Better to just buy them out.  This assumes that they are selling.  I for one would not dream of selling for the prices suggested.

[HappyTrainGuy]

Are they under a similar scheme to us up here?

[somebody]

Are they under a similar scheme to us up here?

Similar in the sense it reverts to public ownership after 30 years - 17 years left.  Seems a bit more complicated now, and the deal was changed along the way.  Here's a reasonably detailed paper on the arrangements: http://www.parliament.nsw.gov.au/prod/web/common.nsf/cbe381f08171c2e8ca256fca007d6044/2d0fc9c7b068f41aca2578bf0014e7af/%24FILE/C001.pdf

I thought they only collected the gate pass aspect which is now $12.30 for a single.  but the above paper reckons they collect 85% of the Cityrail portion of the fare.  I'm confused about the bit in the paper which says revenue amounts above $181m revert to govt/Railcorp 50%.  Perhaps that is ever?  Seems the only way it makes any sense.

[HappyTrainGuy]

Yeah, that's what I thought so.

Hmmm. Strange. I also thought they only got the money from the gate passes that they sold.

[somebody]

Yeah, that's what I thought so.

Hmmm. Strange. I also thought they only got the money from the gate passes that they sold.

I suspect that was the original agreement.  Looks like it's been renegotiated.

[SurfRail]

The benefits of getting the stations on the standard fare scale would flow beyond getting visitors to use the train.

The major benefit would probably be reducing surface traffic demand around the entire Mascot/Port Botany/Marrickville etc area, to the point where silly things like WestConnex make even less economic sense to build.  (The irony that INSW promulgated both of these ideas is not lost on me.)

Really annoyed the government did not take the opportunity to buy out the airport line up here! Would only have needed around $100m.  Drop in the bucket.

[somebody]

The benefits of getting the stations on the standard fare scale would flow beyond getting visitors to use the train.

The major benefit would probably be reducing surface traffic demand around the entire Mascot/Port Botany/Marrickville etc area, to the point where silly things like WestConnex make even less economic sense to build.  (The irony that INSW promulgated both of these ideas is not lost on me.)

Really annoyed the government did not take the opportunity to buy out the airport line up here! Would only have needed around $100m.  Drop in the bucket.

Might have been even less in Sydney in 2005.  $276m is a drop in the bucket for Sydney given the surcharges on Green Square and Mascot are also thrown into the bargain.  More than triple the patronage involved.

[somebody]

Green Square and Mascot surged because they are commuter stations. Also have to wonder where these fares actually came from? Did they shuffle the PT deck chairs from buses to trains? Or did they actually come from cars?

To some degree, yes there was a mode shift from buses to trains.  I think Qantas workers stopped driving to a degree too (http://visual.bts.nsw.gov.au/barrier/). What makes that a bad policy here but a good policy re:NWRL?  (If you are about to throw that back at me, CBD capacity is a big reason)

Airport stations I highly doubt will tripple

Well it probably doesn't need to to make such a move pay.

In 12-15 years time, if I recall correctly, both state govts wil get their airport line/stations for free, thats a better deal.

17 in Syd, 22 in BNE.

[ozbob]

Crikey --> Should the O'Farrell government lower Sydney airport rail fares?

[ozbob]

Sydney Morning Herald --> State reaps $310m over four years from station fees on Airport Line

The amount of money the NSW government collects from fees paid by train passengers using stations on Sydney's Airport Line has passed $100 million a year due to soaring patronage.

A 16 per cent surge in revenue from the so-called station access fee last financial year takes the total amount reaped by the government over the past four years to $310 million.

A one-way train trip between Sydney's CBD and Australia's busiest airport costs an adult passenger $18.70 during peak hours, making it the most expensive journey on the city's rail network. Of that fare, $14.30 comprises the station access fee.

The latest payments to the state are detailed in annual accounts filed with the corporate regulator by the private operator of the nine-kilometre Airport Line.

Under a revised contract, the government has been entitled to 85 per cent of the sales revenue from Airport Link Company since July 2014, almost all of which comes from the station access fee.

The private operator said in the filings that it "expects continued revenue growth and positive cash flows" in the new financial year and beyond.

It means the government will reap larger windfalls from the access fee in the coming years.

More than 33,000 passengers pass through the station gates at the domestic and international terminals on a busy day, a 42 per cent increase on 2012.

Transport for NSW said there were no plans to remove the station access fee, arguing it would cost hundreds of millions of dollars.

"All funds collected under the agreement with Airport Link go towards public transport improvements like more services and better infrastructure," it said.

However, Labor has promised to cut the station access fee to $5, and abolish it altogether for the tens of thousands who work at the airport, if it wins the state election in March.

The access fee for the airport stations is capped at $29 a week for Adult Opal card holders who travel by train to the airport more than once a week.

Some passengers avoid paying the fee by catching trains to Wolli Creek or Mascot, and walking to the international and domestic terminals.

Others have exploited a loophole in the ticketing system that allowed them to pass through the station gates at the airport with negative balances on their Opal cards. But the government closed the loophole last week by making passengers with negative balances add credit to their Opal cards before they can pass through the gates.

Sydney Airport has long argued for a cut to the access fee to encourage more people to opt for public transport, in a bid to reduce pressure on nearby roads.

In a draft master plan released late last year, the airport said discussions would continue with the state's transport agency on the access fee arrangements for stations at Kingsford Smith.

"If the access fee were reduced or removed, an additional shift [of people] to rail could be expected with a likely positive impact on the performance of the road network," it said in the planning documents.

The airport forecasts the number of passengers flying in and out of Kingsford Smith to surge by 51 per cent to almost 66 million over the next two decades.

Last year, the private operator of the Airport Line proposed making an upfront payment likely to run into the hundreds of millions of dollars to the government in return for a greater share over the next decade of the revenue share from the service fees passengers pay.

The offer remains under consideration at the second stage of the government's unsolicited proposal process.

The boost to the government's coffers from the access fee for the airport stations is offset by the state having to "compensate" the private operator for passengers using Green Square and Mascot stations. That compensation was estimated at $22 million in 2016.

The access fees at those two stations have been subsidised by the government since 2011. Under the public-private partnership, Airport Link Company's rights to operate the four stations on the line ends in 2030, when their ownership will revert to the state.