LOOKING TO THE FUTURE

Joe Bates catches up with new Queensland Airports Limited CEO, Chris Mills, to find out how he has fared in his first six months in the role and learn more about some ambitious development plans.

It is still early days in the role for new Queensland Airports Limited boss, Chris Mills, who in many ways literally moved into the hot-seat six months ago as he succeeded the long-serving and popular Dennis Chant and some of his gateways are located in areas where the summer temperatures often exceed 30°C.

Indeed, Chant was the first and only CEO of Queensland Airports Limited (QAL) until his retirement last October, and in many ways the team he assembled over the last 17 years reflected his personality and determination to do the best for the group’s four gateways – Gold Coast, Townsville, Mount Isa and Longreach.

However, if Mills is feeling the pressure he certainly isn’t showing it as he has already brought in a few additions to the management team and is busy fine-tuning QAL’s plans for key new facilities at both Gold Coast and Townsville airports.

The fact that he has been promoted from within – Mills joined QAL as its chief financial officer in June 2014 – also ensured that he was able to hit the ground running due to his familiarity with QAL’s airport system and knowledge of its future requirements.

Since taking on the CEO role, Mills has restructured the business and the management team. Internal promotions have been balanced with some new faces, including a new chief financial officer with an airline industry background, a commercial expert from a major Australian airport, and someone to oversee the human resources and information technology aspects of the business.

He enthuses: “I’ve been given an exciting opportunity to take a successful and well-run company to the next stage over the coming years. Who could ask for more?” 

“Our management team has changed significantly. We have a great team, a good blend of experienced and established QAL people together with new faces who are bringing a different perspective to the organisation. Across the business we have wonderful people to make it all happen.

“I’m not here to see the business stay still – we want to grow, and we are well positioned to make that happen.”

He adds: “Because I didn’t come into the role cold, people know me and I know them and that has definitely made the transition to CEO much easier.

“My management style is about setting a clear strategy and goals, and working with the team to achieve those goals. I am visible and accessible – my door is always open. I have an experienced and supportive Board to guide me along the way.”

Mills describes his first few months as being “incredibly busy”, and he is not exaggerating.

For, in addition to the new faces, QAL has also welcomed a number of new routes and gained approval for major revamps of the terminals at both Gold Coast and Townsville airports.

In fact approval of the $300 million terminal redevelopment project at Gold Coast was granted in February this year and, as a result, construction of an extension building will begin later this year with completion expected in late 2017.

He also notes that in January the federal government approved plans to install an Instrument Landing System (ILS) at Gold Coast Airport, which despite being the sixth busiest gateway in Australia is the only one of the country’s top 12 airports not to have one today.

Reflections on 2015

So how would he describe 2015 for QAL?
“I’d say it was a good year for a number of reasons and 2016 is off to a great start,” says Mills.

His assessment is primarily based on traffic growth, new routes and the green light for a handful of projects across his airport network.

In terms of traffic growth, Mills notes that Gold Coast Airport – the jewel in QAL’s crown – handled more than six million passengers in a calendar year for the first time in its history in 2015.

And it achieved another major milestone in September with the introduction of services to Mainland China, courtesy of Jetstar flights to Wuhan. 

The route was joined by Hong Kong (Hong Kong Airlines) in January 2016 and contributed towards a best ever month for the gateway, when it handled more than 600,000 passengers.

He notes: “Our first Mainland China route wasn’t something that just happened overnight, it was years in the making and involved a lot of time and effort and being on the ground in China to build up our relationship with the travel agents and tourism companies.

“With our services to Wuhan and Hong Kong, I now feel that we have a foothold in China, but we have only just scratched the surface in terms of the potential.”

Some 1.6 million passengers (+0.2%) passed through Townsville Airport in 2015, which, most significantly, says Mills, saw the resumption of international services with the introduction of Jetstar flights to the Indonesian holiday island of Bali.

And an excellent period for that airport was capped off in January this year when QAL gained government approval for a $42 million terminal redevelopment project.

Developing sustainable businesses is a key focus for the future, and will be evident in the terminal redevelopments.

Mills also notes that a $3.75 million project is currently underway at Mount Isa Airport to upgrade the gateway’s existing car park and equip it with solar panels which will provide over half of the airport’s energy needs. Around 200,000 passengers passed through the airport last year.

This year also saw the completion of a project to install 396 solar panels on the roof the terminal building at Longreach, providing enough power to offset almost all of the airport’s energy needs during the day. The smallest airport in its network by quite some way, Longreach handled 37,000 passengers in 2015. 

Role of airports

QAL employs around 200 staff across its four airports, which all have a distinct and very different role to play.

Gold Coast Airport, located around 100 kilometres south of Brisbane, is tourism and leisure focused so the market it serves is very much concentrated on inbound holidaymakers and outbound passengers travelling on vacation or visiting friends and relatives (VFR).

Indeed, 65% of its passengers are visitors to the region and the bulk of its traffic can be broken down to leisure (46%), VFR (28%) and business travel (14%).

Its biggest markets are the domestic routes to Sydney and Melbourne, but the airport also serves a growing number of international destinations in New Zealand and South East Asia.

Townsville’s more diversified economy and the fact that it is home to a sizeable military base means that its passenger mix is more varied, with people travelling on business accounting for 37% of its throughput followed by leisure (33%) and VFR traffic (30%).

The presence of the army defence base ensures that the airport is operated under a joint use agreement with the federal government and its biggest market is Brisbane, which is served by 12 daily flights.

QAL’s smaller gateways of Mount Isa and Longreach serve the mining industry (coal and minerals) and farmland dominated regional and rural Queensland respectively.

Brisbane is Mount Isa’s biggest market and only regularly serviced domestic route. Locals account for 34% of all passengers and the figure has significantly increased over the last four years due to the slowdown in the mining sector. 

Its current mix is largely business (61%), VFR (18%) and leisure (9%), although up to 13% of its passengers pass through the gateway for medical and other reasons.

Going for gold

The importance of Gold Coast Airport to QAL cannot be underestimated and is one of the primary reasons behind its infrastructure development plans. 

The airport expansion is being designed to meet the needs of the airlines and their passengers. Mills and his management team also know that they have to improve its facilities to accommodate future growth and ensure that it can continue to compete against neighbouring Brisbane Airport for new international routes.

“The terminal redevelopment programme and new ILS will allow us to provide a product that can compete with Brisbane. It is a step change for the airport,” assures Mills.

The planned $300 million terminal revamp falls under the umbrella of Project LIFT (Let’s Invest For Tomorrow) and includes proposals to build a three level, 28,000sqm extension to the existing complex to almost double the size of the airport’s passenger facilities.

Designed by Australian firm Cox Architects, it will allow for more aircraft stands, four airbridges, 16 more retail/F&B outlets, and improved amenities for passengers.

Mills says that when integrated with the current terminal in late 2017 it will help create the first phase of a bigger, better and new-look passenger complex.

“It’ll be a real game changer for us in terms of our facilities and capabilities including common use check-in, self-bag drop and other opportunities to bring in current technology. We want the customer experience to be central to what we deliver,” he enthuses.

Next on the agenda after the completion of the 2018 Commonwealth Games in the Gold Coast, QAL will start work on a revamp of the existing terminal.

And Mills reveals that QAL has longer-term plans to develop 30 to 40 hectares of its land for non-aeronautical related activities to diversify the Gold Coast Airport’s offering and provide alternate sources of revenue for years to come.

Indeed, QAL is currently formulating a ‘property strategy’ to decide what opportunities are available to develop land on the airport site or just over the perimeter fence to complement existing development with new facilities such as hotels, offices and retail parks.

“It’s a very exciting opportunity and we are talking 20 to 30 years in terms of the full realisation of this strategy. The airport can continue to build on its aero success, and provide a broader offering in the years to come,” suggests Mills. 

He adds: “We are also looking to improve connectivity and our master plan provides for rail connections to the airport in the future.”

Route development

Is it safe to say that the introduction of low-cost services by airlines such as Tiger Airways, Jetstar, Air Asia X and Scoot have breathed new life into Gold Coast Airport?

“Yes, absolutely, low-cost carriers have been, and will continue to be, an integral part of Gold Coast Airport’s business and the Gold Coast as a leisure destination,” admits Mills.

“However we are seeing a shift in the mix, and the mix of full service has grown over the last three years. Full service operators include Qantas, Virgin, Air New Zealand and Hong Kong Airlines. This reflects the continued evolution of the Gold Coast as a whole, providing offers and experiences to all demographics.”

Although international traffic is on the rise, growing by a healthy 5.1% last year, domestic services continue to dominate at Gold Coast Airport with five of the gateway’s six million passengers travelling on flights within Australia, principally to Sydney and Melbourne.

Airport economics

We hear a lot from ACI about the economic realities of running the world’s airports and, that typically, smaller airports operate at a loss. Is this true for QAL and, if not, how have you bucked the trend?

“In the Australian landscape it is challenging for regional airports that run under singular control,” concedes Mills.

“QAL is an experienced airport operator, and by operating a group of airports we are able to create synergies through our corporate structure. We provide corporate support services such as business development and marketing, finance, IT and human resources. 

“This structure ensures the assets retain local autonomy whilst also possessing the ability to tap into the human assets of larger airports. Purchasing power is one example of the leverage we can achieve for the smaller airports.”

Sounds like QAL is in safe hands under Mills, who let slip the fact that he is actually a ‘Pom’ having been born and raised in London for the first few years of his life before his family emigrated to Australia.

He once returned to work in the UK for two-and-a half years but returned to Australia because he jokes that he couldn’t face a third British winter! A wise move indeed.

Mills certainly seems to have found his niche in Queensland, although now it is the hot summer weather keeping him awake at night and not the cold winter nights in London!