AVIATION in Bathurst should be the concern of every single person in the community, a group of concerned pilots and operators say as they continue their six-year long battle with council.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Since 2012, lease holders at Bathurst Airport say they have received excessive rate increases from council, with some rising by 350 per cent, Aircraft Owners and Pilots Association executive director Benjamin Morgan (AOPA) says.
He said aviation was vital to the community as it involved the air ambulance, firefighting, tourism, pilot training and recreation.
However, he said running an aviation business in Bathurst had become impossible due to skyrocketing lease fees and difficult tenure agreements that result in business operators not being able to borrow money to build on their leased site.
Bathurst businessman Graham Burke addressed fellow airport lease holders at a meeting on Wednesday and called for council to provide “fair and reasonable” rates for every lease site.
He said rates range from three cents a square metre (for the Royal Australian Air Force Cadets) to $12 a square metre for Mr Burke’s site, which, following his complaint to council, was reduced to $9.
“It doesn’t generate one single solitary red cent into this community,” he said of the cadets.
Mr Morgan said council has implemented a 100 per cent ‘full cost recovery’ model that aimed to recoup airport costs from the 23 current leaseholders.
Mr Burke said in recent years 18 aircraft had left the airport, three flying schools had dropped to one, and three aviation maintenance organisations had dropped to two.
It is an absolute shambles and I have never in my life come across a model that’s so impractical … it’s just an absolute disgrace.
- Pilot Graham Burke
“It is an absolute shambles and I have never in my life come across a model that’s so impractical … it’s just an absolute disgrace,” he said.
Mr Burke called for an independent arbitrator to step in on the situation so “we can get if fixed once and for all”.
Council general manager David Sherley disputed that there had been a decline in private operators and said just one of the 25 leaseable sites was vacant.
“The disputes centre around the value of the ‘market rate’ and the recognition to those lessees that have installed the services on their leased site at their own cost,” he said.
“The leases issued at that time recognised the works that were undertaken.
“As leases come up for renewal council has resolved to apply market rate in line with other council leases.”
Bathurst Regional Council’s full response
COUNCIL currently has 25 leasable sites at the Bathurst Aerodrome, although this number will increase as the next release area becomes available.
Almost all of the existing 25 sites are under an existing lease agreement, all with differing terms and commencement dates.
It is important to note that each lease currently relates only to the land, and not the hangar itself. The hangar remains in the ownership of the lessee. If, after the expiration or termination of a lease, the lessee
vacates the site and leaves the hangar in place, the ownership of the hangar would then transfer to council.
In recent times, a number of lessees have disputed the increases in their annual lease fees. The disputes centre around the value of the ‘market rate’ and the recognition to those lessees that have installed the services on their leased site at their own cost. The leases issued at that time recognised the works that were undertaken.
As leases come up for renewal council has resolved to apply market rate in line with other council leases. The terms of market rate were included as a provision in the renewal leases. Market rate was informed by independent consultants engaged by council and evidenced by recent new leases at the airport.
Council’s full cost recovery policy applies to the entire airport. Lease revenue contributes to approximately 20 per cent of airport revenue. The full cost recovery policy attempts to operate the airport at a break-even position.
Council’s 2018/2019 budget is projecting an operating loss for the airport of approximately $500,000, and it is therefore being subsidised by council. A review of the Bathurst airport operations, completed in 2012, identified that the airport should be achieving a rate of return, better than or equivalent to the 10 year Commonwealth Bond Rate.
In today's markets this suggests a rate of return of 2.25 per cent or better, or a profit of $300,000. Hence, it could be suggested that council is subsidising the airport to the amount of $800,000.
With assistance from the federal government, council is investing over $6 million dollars in infrastructure upgrades to the airport. Current and future upgrades include construction of a large sealed aircraft parking area and sewer reticulation, a new fence around the perimeter of the airport, tie-down facilities for smaller aircrafts.
This year alone, council is spending $1.8 million on improvements, which are part of the ongoing improvement works for the airport. This includes the construction of additional leasable hangar sites, construction taxi ways and more CCTV equipment.
Bathurst Airport has not seen a decline in private operators. In fact, currently only one out of the 25 leasable sites is currently vacant.