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Federal

Jun 17, 2009

The Sydney airport capacity kerfuffle

Anthony Albanese’s diligence in getting Access Economics to put Sydney Airport’s 20 year master plan under the microscope points to a policy break point, says Ben Sandilands.

Infrastructure and Transport Minister Anthony Albanese’s diligence in getting Access Economics to put Sydney Airport’s 20 year master plan under the microscope points to a policy break point in relation to privatised airports in general.

There is, according to the leak in the Sydney Morning Herald, little doubt Albanese will sign off an approval of the plan by this Friday.

But it is the finding of the review, that the plan is inadequate, that now sets the scene for the selection of a site for a second Sydney airport.

When the gateway airports were sold to private consortiums, with Sydney the last to go in 2002 for $5.6 billion, the cash bonanza to Canberra came with the loss of real competition as well as planning control over vital airport infrastructure in perpetuity.

Buying a capital city airport was seen as acquiring a licence to gouge the airlines and the public for ever.

But perhaps the government is now signalling that this isn’t necessarily so.

Sydney Airport is still reported as being $6 billion in debt, and has crawled to the airlines begging their indulgence over its unwillingness to pay for $90 million in fairly ordinary upgrades in the next 18 months.

All work supposed to be paid for out of the fees it has been charging the airline.

Sydney airport’s cash needs are much less about funding future infrastructure than funding the financing structure set up when the Macquarie Bank lead consortium offered the biggest windfall to the Howard Government.

Sydney Airport’s incapacity to handle a projected 79 million passengers a year by 2029, as claimed in the Access Economics review, is a serious blow to the grip the city has on being Australia’s main gateway.

Both Melbourne and Brisbane (including the corridor to the Gold Coast) can strip Sydney of the economic benefits of being the business and tourism hub of the nation by exploiting easy and convenient options for growing their existing main airports or even in the case of Brisbane, replacing the Gold Coast airport with one located midway between the northern end of the strip and Brisbane.

It is in planning terms, as easy for Melbourne or SE Queensland as stealing candy from a baby.

The burning issue of course is where would a second Sydney airport be. There is a perfectly good site at Badgerys Creek within easy reach of the M7 Motorway, but somehow, it is considered political poison.

Or there is the option to fit a handful of domestic flights into Bankstown and Richmond, each of which comes with the certainty of their own poisonous political consequences.

Or there is the bankrupt-the-nation option of building a remote second Sydney Airport that is guaranteed to drive the major generators of business out of Sydney, because the prerequisite of reliable, frequent and convenient air links do not by definition come with a two hour trip to or from Bullamakanka.

And there is another trap in this for Sydney. The notion that somehow “nice” business travellers will be segregated into full service flights to Sydney Airport, while the low cost segment somehow absorbs the costs of a transfer to the bush is ludicrous.

In reality, the days of such segregation are going the same way as first class on horse drawn trams 100 years ago. Almost all air travel, including corporate travel, will be made on lower-cost-carriers in the future, and the days of largesse in business flights are over, as carriers low cost and higher cost all scramble to put in premium economy products to deal with the changed reality.

The situation facing Albanese, and Sydney, is very messy. But the times have changed, and the comfortable assumptions once made that Sydney Airport could always meet the city’s needs are about as stuffed as its access to future port facilities.

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