Breakthrough: Virgin Australia signs up for new Brisbane runway
A breakthrough in Brisbane Airport’s new runway crisis has been made with Virgin Australia agreeing to the funding proposal from the airport’s owners and signing up for major improvements to its own terminal facilities.
Brisbane travellers have increasingly experienced long delays caused by congestion on the airport’s single long runway, but Qantas and Virgin Australia had opposed the plan by which part of the $1.3 billion project to build a second major runway would be funded by increased landing fees.
(Brisbane Airport had previously said that BAC will invest 75% of the cost of the new runway through contributions from our shareholders and loans with 25% is to come through landing fees. It had estimated that this year, the airlines’ contribution would be an extra 35 cents per domestic passenger on their landing fees. All these fees would increase gradually to, at most, an extra $3.15 per international passenger in 2017, three years before the new runway is completed.)
This is the statement issued by the airport and Virgin Australia this morning.
Wednesday 19 June 2013: Brisbane Airport Corporation Pty Ltd (BAC) and Virgin Australia Airlines Pty Ltd (Virgin Australia) have reached an agreement that will enable significant enhancements to Virgin Australia’s facilities and support the development of critical infrastructure at Brisbane Airport.
The agreement includes:
- A series of major upgrades to the Virgin Australia-leased area at the Domestic Terminal including an expanded Virgin Australia lounge, new gate lounges to support the growing ATR Turboprop operations, expanded terminal seating areas and additional aerobridge gates for wide-bodied Airbus A330 aircraft;
- Ongoing runway access for the next 10 years and support for the development of the new parallel runway;
- The sale and lease-back of the Virgin Australia hangar at Brisbane Airport.
BAC’s Chief Executive Officer and Managing Director Julieanne Alroe said the signing of the agreement with Virgin Australia was a significant milestone for the airport.
“The agreement proves the commitment of both BAC and Virgin Australia to the growth of aviation services in Brisbane, Queensland and Australia.
“BAC is committed to building Brisbane’s new runway. The project is on track and on schedule and our investment so far, along with today’s announcement, demonstrates this commitment and is an important step forward”, Ms Alroe said.
Virgin Australia Chief Financial Officer Sankar Narayan said: “With 37% of our domestic flights arriving or departing the city each day, Brisbane is an extremely significant airport for Virgin Australia and is key to our growth aspirations.
“This agreement demonstrates that both BAC and Virgin Australia are committed to investing in customer experience and aviation infrastructure at Brisbane Airport.
“We have worked closely with BAC to achieve an outcome that is in the best interests of our customers, our shareholders and the state of Queensland”, Mr Narayan said.
The upgrades to the Virgin Australia-leased area at the Domestic Terminal will be completed over the next three years and further detail will be provided in due course.
The runway system agreement is a 10-year agreement that provides certainty to the ongoing development of infrastructure at Brisbane Airport.
The sale and lease-back of the Virgin Australia hangar is expected to be finalised by 30 June 2013.
The result is that Qantas is now isolated, but probably not for long, in its opposition to the increased landing fees proposal and Virgin Australia has gained terminal improvements that will improve its customer experience at Brisbane Airport, where it has been growing its market share, with plans to add to that when it gains control of Tiger Airways (Australia) as soon as next month.
For Brisbane travellers in general however it means that congestion will continue for years until the difficult engineering work required to stabilise the marshy foundations of the new runway has been completed, but that an end to the inconvenience is now in sight.