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Sydney's future airport needs.

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13 December 2000 A197/2000


Sydney Airport is comfortably handling its growing level of air traffic and the Federal Government, after lengthy and careful consideration, has concluded that it would be premature to build a second major airport in the city. Instead, the Government has decided to make Bankstown Airport available as an overflow airport for Sydney.

The Government has concluded that Sydney Airport will be able to handle the air traffic demand over the next ten years. The advantages of operating to the airport are so great that the airlines will adopt aggressive commercial strategies to maximise their use of the airport. These will include the use of larger aircraft, as announced by Qantas, and operating direct services that bypass Sydney, such as between Canberra and Brisbane.

The Government has reaffirmed its commitment to the existing operating arrangements at Sydney Airport. We will not alter the curfew, the 80 movements per hour cap, or the guaranteed slots for regional airlines.

The Government will continue its policy of guaranteed regional airline access to the airport and maintain the existing price regime for regional airlines. Sydney Airport is an essential transport hub for regional New South Wales, and our policy recognises its vital importance.

The number of regional slots allocated in peak periods will be capped at its current level. The Government’s decision will facilitate the further growth in the number of regional passenger movements through the airport by encouraging the use of larger aircraft for regional services and the trend to hub-and-spoke operations.

The Government will amend the slot management scheme to encourage airlines to introduce larger aircraft progressively. The amendments to the scheme will not affect the allocation of slots to which operators, including regional operators, have historical precedence. They will be used to determine the allocation of new slots. We have decided to establish a minimum aircraft seat limit for allocating new slots, and the limit will be determined in consultation with industry. No existing services will be affected.

The Government is confident that the commercial decisions by the airlines and our policy measures will ensure that Sydney Airport will be able to cope with the increasing air traffic until the end of the decade. Accordingly, it would be premature to build a second major airport. It would be under-used for many years.

The Government will break up the Sydney Airports Corporation and privatise it as two separate and competing companies. One company will operate Sydney Airport; the other will operate Bankstown, Camden, and Hoxton Park Airports.

The sale conditions for Bankstown Airport will encourage its operator to upgrade the airport so it will operate as an overflow for Sydney Airport and, in time, become an attractive alternative for some airline services. The operator will be encouraged to extend the main runway so it can handle jet aircraft and build a new passenger terminal, subject to the completion of the necessary environmental assessments. There will be no pricing restrictions at Bankstown Airport. The airport will not be capable of handling large jet aircraft such as 747s. The Bankstown Airport airspace will be upgraded and operations in the area will be controlled more tightly.

The private sector operator of the airport will be free to adopt innovative commercial policies to attract airlines to the airport, such as offering reduced landing charges.

The Government will retain ownership of the Badgerys Creek site. We will legislate to protect the site from incompatible development in surrounding areas.

After careful consideration, the Government has decided not to examine further the possibility of constructing an airport on the Kurnell Peninsula. The Peninsula’s unique place in Australia’s history and its environmental significance as a RAMSAR-listed wetland outweighs the many good arguments for locating an airport there.

The Government will facilitate the development of Canberra Airport to international wide-bodied jet standard. The upgrade of the airport will provide a further option for international charter airlines, as well as enabling VIP 747 aircraft to fly directly to the nation’s capital.

The Government will further review Sydney’s airport needs in 2005.

Very High Speed Rail

The Government has also decided to terminate the Sydney-Canberra Very High Speed Train tender process on the grounds that we are not convinced that the Speedrail consortium’s bid meets the no net cost to government criterion. Speedrail had been invited to prove up its bid after being recognised as the consortium that had come closest to meeting the tender requirements, but as a substantial up front public subsidy would be required to make the project viable it has not been accepted.

The NSW and ACT Governments have indicated they are either not prepared or financially unable to subsidise Speedrail’s construction and operation. The Government accepts their position.

Nonetheless, strong public and business support for Very High Speed rail transport solutions has been demonstrated throughout the process. The Government believes that very high speed rail could be part of Australia’s transport future.

Accordingly, the Government will enter into negotiations with the states and the ACT to join it in a comprehensive scoping study to examine options for an east coast VHST network, linking Melbourne, Sydney and Brisbane, together with Canberra, major regional and coastal centres along the route.

The initial inter-governmental negotiations will establish the parameters for the scoping study. These will include: technical performance requirements, route, risk management, patronage, project structure, indicative project costs, economic impact, government involvement and financing.

The consideration of financing arrangements will include the preparedness of governments to make financial contributions to the project because clearly public investment would be essential to make the VHST vision a reality. The major conclusion that can be drawn from the Speedrail process is that passenger volumes in Australia are not sufficient to make high speed rail commercially viable without public subsidy.

The Government also believes that if an east coast VHST is achievable it could provide a high speed transport alternative to aircraft in this important national transport corridor with significant prospects to extend the life of Sydney Airport. The east coast VHST study will be an important input into the review of Sydney’s future airport needs in 2005.


Media contact: Paul Chamberlin 02 62777680


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© Commonwealth of Australia 2000 Last updated:  Wednesday, 13 December 2000