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Apr 15, 2017

Is it true Sydney Airport can't afford to screw 2nd airport users?

The dream of a Sydney with two large airports competing on car parking and passenger user charges might just be about to come true

Badgerys Creek airport site may yet escape from monopoly ownership risk

What better timing could there be than an Easter Holiday weekend story or two putting the owners of Sydney Airport in a headlock over the fate of their right to gouge travellers and airlines for another 88 years or so as the monopoly lease holders of existing and future airport facilities in the entire Sydney metropolitan basin?

The Australian obliges today with a ripper of a story (subscription required) in which the Federal Government calls the bluff of Sydney Airport Group over its insistence that it might not take up its first dibs on building and operating the second Sydney Airport at the Badgerys Creek site.

The Sydney Morning Herald takes a different, but no less painful approach in a story about claims that the WestConnex road project might not only cost three times as much as officially claimed, but still doesn’t have a plan to connect drivers to the existing airport.

As Plane Talking has pointed out over the years since Sydney Airport was sold for $5.6 billion in 2002 to a consortium that was then free to totally screw users of the asset for anything short of prices that would collapse demand for airline services to Australia’s largest city, this was the worst privatization of a publicly owned asset in the country’s history.

But the dream that somehow a way might be found to prevent Sydney Airport from exercising its right to extend the screwing to any additional new airport in the metropolitan basin may be about to come true.

Sydney Airport, the company, has baulked at the idea of spending maybe $3 billion to set up the first stage of the Sydney West airport and a May 8 deadline for it to pay up or p*ss off, is bearing down on it. And as The Australian reports, the Feds have locked in place their Plan B for financing Sydney West, pending no doubt, a future sale to different private owners, or maybe even a Sydney Airport that has undergone some attitude readjustment therapy.

Whatever else might happen, it seems that the Turnbull Government (and most likely any government that might follow) is determined that the Sydney basin will have a second jet airliner airport by 2026. In economic terms, this would be like giving a patient who will otherwise die of congestive heart failure a new lease on life.

Will Sydney Airport blink? Let us hope not. The countdown is running out of days. The ruinous decision taken by the Howard/Costello government might just be torn down.

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15 comments

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15 thoughts on “Is it true Sydney Airport can’t afford to screw 2nd airport users?

  1. Ian Fraser

    Let’s hope so Ben.
    But I wonder if games will be played with legal rights as to the consultation period in order to buy themselves more time.
    That is, just what is the new management strategy after Kerrie Mather’s departure – a different view of the world, or not?

  2. comet

    Was Sydney Airport the worst privatisation?

    Maybe. But there are some close contenders. The privatisation of the country’s electricity assets. The privatisation of the nation’s gas supplies and subjecting it to global markets. The privatisation of telecommunications monopoly Telstra, then the renationalisation buy-back of the copper network.

    I’m not against privatisation per se. But most of the big ones have turned into disasters.

  3. ghostwhowalksnz

    Once the airport is built and up and running but struggling under its fiance /depreciation costs, Sydney Airport will rush in as white knight and scoop it up for far less than build cost. Isn’t that how those private infrastructure projects work out in Australia ?
    Remember Montreals ‘second airport’

    1. comet

      Montréal’s Mirabel airport was built without any rail link. :-\

  4. Ben Sandilands

    Ghost,
    That was certainly true of Sydney Airport’s rail link, and the city’s Cross City tunnel, both of which were calamities for the original and even second owners, and for a long time, anyone using them. The airport rail is finally getting substantial patronage with the non airport stations also being subsidised by the state to the extent of removing the station gate fees since they now have a growing customer base that use them for everyday commuting from new high rise residential developments and so forth.
    But unlike benighted Mirabel, which is where no passengers fly, and Bombardier does its thing, Badgerys Creek won’t be short of punters, domestic or international. In my opinion, its footprint, of 1700 hectares or twice that of Sydney Airport, will quickly prove too small for purpose, and those hints you find in various studies of a ‘Nepean’ option, taking up almost vacant land to the west adjoining the site, might yet turn into something vital to its growth beyond two parallel runways. This isn’t something Governments want to talk about yet, the focus is on getting the baseline airport up and running, but I think the topic will get a workout probably even before Sydney West opens.

    1. ghostwhowalksnz

      Its great for people like me, that Sydney airport has a rail link, as I would use it. But as I showed before the numbers using the airport stations, not those getting on at other parts of the line, show the passengers dont really use them. I havent got the numbers for Brisbane but hear its similar- using airport trains from existing stations OK but from the airport not so much.
      But heres an idea to bring the cost down to what all commuters pay( the highly subsidised cost), get the airport to pay any top up. After all its the public highways that have to be built to take the peak traffic flow. I dont think it will make a huge difference to travelling passenger numbers but might get a lot of airport workers.

  5. ggm

    I hope I am not alone in wishing we had a government with balls enough to leave it named badgerys. Sydney west is about as anodyne as a shit sandwich. “Oh no, sorry love your flight departs from badgerys Creek,” how more quintessentially strayan can you get? The airport code would also have to be BGRY

    1. Dan Dair

      ggm,
      I too would like the Badgery’s Creek name maintained.
      I think it’s very Australian, yet not parochial.
      Most airports are initially named after the places where they’re situated, so why not.?
      It’s not as it we’re going to invite the world to the doorstep & then put them into tents, is it.?

      Badgery’s Creek Sydney or
      Badgery’s Creek Sydney West are my preferences,
      but I could probably cope with
      Sydney Badgery’s Creek.

  6. comet

    Montréal’s failed Mirabel airport could have worked.

    The provincial Québec government stuffed it up. They had domestic flights at the older Dorval Airport, international flights 30km away at the new Mirabel Airport, and no transport links in between.

    Montréal also didn’t get the expected increase in passenger numbers after the halo of World Expo and Olympic games wore off. But an airport like Mirabel, 39km from the city could have worked if done properly.

    Any parallels for Sydney? Lack of rail links is one insane decision in common. It would be tough for anyone to transfer between Kingsford Smith and Badgery’s Creek, but maybe passengers will book their flights so they don’t have to.

    1. Dan Dair

      Comet,
      IMO this is exactly why BCA will succeed.
      It’s completely stupid to expect passengers to transfer between such distant airports. London lays claim to six officially-titled London airports & none of them are quickly or sensibly linked to eachother. Which is why they’re still talking about a Heathrow replacement or upgrade, despite the fact that none of the other airports are anywhere close to capacity.
      Emirates intimated a couple of years ago, that for take-off time convenience, they’d be very interested in flying their 11.30 SYD arrival into BCA at around 1am. Presumably, they’ll be looking to have the departure time the following morning about the same as is currently from SYD.
      IF that were to actually happen, in an instant it would generate a need for 2,3 or 4 domestic flights from BCA to other Australian destinations for the onward travellers.
      One would assume an equal number of flights arriving at BCA with passengers for onward transfer to Dubai.?

      Instantly, one piece of action has created 2 or more other services
      and once people start to transfer through BCA & find the whole experience more pleasurable than SYD it will begin too generate it’s own momentum.
      The same will probably be true for the West Sydney ‘locals’.? Once they have a service going where they want, at a price similar to what they want to pay
      AND they can then look at the savings on parking, travelling, congestion & not having to endure SYD, they’ll probably be wiggling-their-fingers-in-glee.?

      The B-side of this is that it would force SYD to shape-themselves pretty fast, to start to change all the things about their airport which people hate.
      So ultimately, it would be a win/win for the travelling public.?

    2. Arcanum

      The other reason Mirabel failed is because its construction coincided with the decline of Montreal and ascendance of Toronto as the largest city and major international gateway for eastern Canada. Melburnians and Sydneysiders can draw parallels as they wish.

  7. Ben Sandilands

    Ghost,
    I think that’s a good suggestion and there is no doubt it would pack the existing trains to the airport to their double rafters (each car is a double decker) for those not attempting to board with bulky luggage. However this link refers to very strong growth in use of the airport stations:
    http://www.bordermail.com.au/story/4278162/13-million-weekly-windfall-from-sydney-airport-station-fees-for-nsw-government/?cs=7
    I believe this growth is predominantly for domestic flights, and often by those making a day trip to Melbourne or Brisbane and carrying very little by way of luggage and unlikely to have checked baggage.
    There is a further problem. The airport trains are infrequent, even though the line could in theory easily take one train in each direction every three minutes. This is because once these trains merge with the other lines using the City Circle stations the capacity that can be allocated to them is drastically reduced. This infrastructure squeeze on the actual CBD stations reflects very poorly on 90 years or so of state governments failing to add significant new platforms, new tracks or new stations to the city area. The NW Rail Link does add a few new stations in the main Sydney CBD but the planning tragically in my view, failed to provide a direct metro link to the airport stations, so won’t actually make Sydney Airport rail access better in any way.
    The only glimmer of forward planning that can be seen in the current airport rail line is that it is built to be easily extended to the Badgerys Creek site via Glenfield. However that connection would be unlikely to be of use to those travelling to the CBD. This easy option for Badgerys Creek is all about making it possible to reach the second Sydney Airport from close to 200 metropolitan suburban rail stations.

    1. Ian Fraser

      Ben
      Have a look at the FlytoGet express rail service between Gardermoen Airport in Norway and Oslo Central, etc.
      Last I heard some 40% of users of the airport took that rail line – I have a friend who’s used it, I haven’t, but it looks pretty good on the web at these links:
      http://flytoget.no/flytoget_eng/About/Service-excellence
      http://flytoget.no/flytoget_eng/About/Our-story2

      They have also ordered new Spanish trains with a view to upgrading the line to 250km/h top speed.

  8. Jaeger

    Sydney Airport declines[*] offer to run second airport at Badgerys Creek
    http://www.abc.net.au/news/2017-05-02/sydney-airport-declines-to-run-badgerys-creek-airport/8488616

    * “on the terms provided”.

    1. Ben Sandilands

      New post here:
      https://blogs.crikey.com.au/planetalking/2017/05/02/sydney-airport-says-no-badgerys-creek-future-fee-gouging/

      Notice the to and fro between Sydney Airport and Govt toward end of linked ASX statement.