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AIRPORT PROFILES Last modified on January 16, 2014

Ready and willing

While the politicians are talking about a new airport for Sydney, Kerrie Mather, CEO of the existing one, is getting down to the business of running Australia’s busiest gateway. Lucy Siebert reports.

It is not often that airports feature in election campaigns, but in a year that Australia had no less than three prime ministers, Sydney Kingsford Smith Airport found itself at the heart of local and federal politics.

The debate about whether Sydney needs a brand new 24-hour airport – and where that might be located – has been around for years, but it shot back towards the top of the political agenda during 2013.

Supporters of a new airport argue that Sydney’s growth means the current airport, which operates under an 11pm–6am curfew and a restriction of 500,000 aircraft movements a year, will be unable to meet demand in the coming decades.

The location of any new airport is always a political hot potato, but the current front runner is Badgerys Creek, 51km west of Sydney’s Central Business District (CBD).

Supporters of the project argue that the area could use the jobs boost a new airport would bring, and handily, the government already owns the land there on which a new gateway could be built. Prime Minister, Tony Abbott, has publicly backed the Badgerys Creek site.

Now, it is believed that Australia’s Transport Minister, Warren Truss, is aiming to make a decision on any proposed new airport in early 2014. Truss has been widely quoted in the media as saying he believes a 24-hour airport will be required before 2027.

 

A different view

While some Australian politicians might be backing a new airport project, the operator of Kingsford Smith, Sydney Airports Corporation (SAC), which also has the right to operate any new gateway, believes the current airport has plenty of scope for growth and expansion. It argues a new gateway would not be required for another three decades.

The operator submitted its master plan to the government in December, outlining its belief that it will be able to service Sydney’s air transport needs until 2045.

The master plan forecasts passenger numbers rising to 74mppa by 2033, with aircraft movements increasing to close to 410,000. The airport operator argues this is well within its current capabilities.

Sydney Airport CEO, Kerrie Mather, is quick to point out the facility’s scope for future growth.

“We’ve got capacity to serve the very strong growth potential we are seeing here in the market. There has been a lot of misinformation about our capacity, given the debate around the second airport, but a number of government studies have been done in recent years confirming Sydney Airport has capacity for the foreseeable future,” Mather tells Airport World.

“We have a number of operational restrictions that were put in place to alleviate noise – they were put in place 20 or 30 years ago – well before new-generation aircraft that are having a very favourable outcome on noise. They don’t reflect modern aviation,” she adds.

 

Industry changes

The CEO, who has headed up the listed Sydney Airport Holdings Limited since 2002 and has been managing director and chief executive of Sydney Airport since June 2011, believes structural changes in the industry have transformed the way the gateway operates.

Mather says new-generation aircraft will allow Sydney to meet demand, even with current restrictions in place, well into the future.

“The way our capacity is being used at the airport is fundamentally different to the way it was used five years ago, or even 10 years ago. It is unique because we are an O&D market,” she says.

“We are not a hub – we are the end of the line of major long-haul routes. If you look at those operation restrictions, we have close to 500,000 movements per year, and we are using about 320,000 of those. That hasn’t varied a lot over the past 10 years because those new-generation aircraft and the low-cost carriers are carrying significantly more passengers per aircraft.”

Highlighting this is the fact Sydney was the first airport to receive a commercial A380 service in 2007 with Singapore Airlines, and it now handles 120 super jumbo services a week.

Mather says this type of investment from the airport’s airlines bring major benefits for all stakeholders.

“The airlines are all investing significant amounts in this new-generation technology, which is driving better outcomes for them with more fuel-efficient operations; for passengers, it’s driving great product experience; and for the community, it leads to better noise outcomes,” she says.

Mather continues by pointing out the impact that the growth in low-cost carriers, including Jetstar, Tigerair Australia and AirAsia X, are having on Sydney’s operations.

Meanwhile the Qantas–Emirates partnership has also altered scheduling at Sydney, with the Flying Kangaroo now hubbing through Dubai instead of Hong Kong or Singapore.

“Once upon a time, when Heathrow via Asia was a major hub, most of our growth was into our peak, but we are finding that is moving throughout the day. And the LCCs are increasing their operations in the off-peak as they are serving the markets at different times of day,” she says.

Expansion plans

With Sydney Airport Corporation in no doubt Kingsford Smith has sufficient capacity to meet the medium-term demand, its master plan includes a number of proposed schemes aimed at expanding facilities and improving the airport experience for passengers.

The main one of these is integrating the domestic and international terminals under one roof.

Mather explains: “The concept creates two integrated precincts each accommodating international, domestic, regional and freight. It is actually a mixing of international and domestic, and will improve the airport experience and make our operations more efficient.”

She adds that the plan is possible as there is “no overlap” between the three busiest international hours and the four busiest domestic hours of the day.

“There are significant periods of the day the airport is relatively empty so the mixing of terminals provides a better balance of activity between the two precincts,” she adds.

Transport headaches

While the city of Sydney is known for its sweeping harbour views and beach-side living, it is also famous for its transport woes.

The airport is no exception. While it is just eight kilometres from the CBD and its fast and efficient airport rail link is popular with passengers, the gateway still suffers from road transport congestion and delays.

To address this, the master plan foresees the creation of an integrated ground transport system and an upgrade of major roads and intersections around the airport.

“We are working closely with the government on some of the issues to improve the traffic flow to the airport. The government has now prioritised Sydney Airport in terms of ensuring the transport links, investment in and expansion of the major intersections are one of the highest priorities,” says Mather.

Under the plan, there will be a new one-way ring road for the T2 and T3 precinct, and a new free-flowing road through the T1 precinct, as well as a new city-bound exit by 2018.

The airport claims this will increase ‘green light’ time at key intersections by up to a third. There will also be a new bus and multipurpose parking facilities.

 

Ongoing investment

And despite the uncertainty surrounding the future of Sydney’s airport system, Mather points out the operator has continually made significant investments over the past decade.

“We’ve invested A$2 billion in capacity and improved facilities over the past 10 years and we will continue to invest significantly in enhancements,” she enthuses.

“The investments in recent years include the significant expansion of Terminal 1, which completed in 2010, and a significant capacity expansion of nearly 30% at Terminal 2.”

And during December it opened a new domestic two-level car park, creating an additional 964 car parking spaces. This brings total car parking across the airport to 16,700.

So while there are question marks around what the future might hold for Sydney Airport, Mather is adamant that the current gateway will continue to play its central role in Australia’s economy for years to come.

“Every airport plays a vital role in the economy but Sydney has a particularly vital role in facilitating tourism and providing all the associated infrastructure for tourism and growing the economy,” Mather concludes.

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