Sydney Airport expects to receive Badgerys Creek contract this year

The federal government has officially "declared" Badgerys Creek as the site for a second airport in Sydney. (Jordan Chong)
The federal government officially “declared” Badgerys Creek as the site for a second airport in Sydney in August 2015. (Jordan Chong)

Sydney Airport says it expects to receive a “Notice of Intention” from the federal government regarding the proposed Western Sydney Airport at Badgerys Creek later in 2016.

The company told the Australian Securities Exchange in its full year results presentation on Thursday, which showed a 5.6 per cent increase in revenue and 5.8 per cent improvement in earnings before interest, tax, depreciation and amortisation (EBITDA) for the 12 months to December 31 2015, that the consultation process with the government and evaluation of the proposed airport was continuing.

“The Commonwealth Government has indicated that it may issue Sydney Airport with a Notice of Intention in 2016,” Sydney Airport said.

“Sydney Airport would then have either four or nine months to exercise the option to develop and operate the new airport.

“The opportunity continues to be evaluated with the impact on all stakeholders being carefully analysed.”

The notice of intention is effectively a sales contract to build and operate the proposed airport.

Sydney Airport has a right of first refusal (ROFR) to build and operate a second airport within 100km of the Sydney CBD.

The government released the draft airport plan and environmental impact statement (EIS) for the proposed Western Sydney Airport at Badgerys Creek in October 2015.

The documents covered indicative flightpaths, noise contours, the building requirements for stage one of the airport’s development and the long-term vision for the facility. The 60-day public consultation period ended on December 18 2015.

The Department of Infrastructure and Regional Development said on its website it was currently reviewing public comments on the draft EIS, with “finalisation” of the document “expected by June 2016”.

The federal government “declared” Badgerys Creek as the site for a second airport in the Sydney basin in August, which ensured further planning work on the airport could proceed and airspace around the proposed facility was protected from potential high-rise buildings.

Sydney Airport said the decision on whether to exercise its ROFR over Badgerys Creek would be based on five key principles – hurdle rates of return, cash flow and yield, growth potential, downside projections and impact of the existing airport at Mascot.

“Rigorous and proven principles will be applied to the evaluation of the Notice of Intention,” Sydney Airport said in a slide presentation accompanying its 2015 financial results.

“The ability to expand the business over time will be vital.

“We will ensure that any impacts on our current business are understood and factored into our analysis.

In terms of the financial figures, Sydney Airport reported revenue of $1.229 billion in calendar 2015, up from $1.164 billion in the prior corresponding period, while EBITDA came in at $1.004 billion, compared with $948 million previously.

Sydney Airport said the number of passengers travelling through its domestic and international terminals rose three per cent to 39.7 million in 2015. Chinese arrivals at Sydney rose 17.8 per cent and was the second-fastest growing nationality in 2015 behind the Filipino visitors, which were up 36.7 per cent on the prior year.

“I’m delighted to announce we have delivered another strong result due to the continued growth of international passengers and investment driving yield expansion across all businesses,” Sydney Airport chief executive Kerrie Mather said in a statement.

“It’s been a very successful 2015. Our business strategy remains on track, and we’re well positioned to continue to deliver EBITDA and cash flow growth well above passenger growth.

Sydney Airport declared a final distribution of 13 cents per stapled security, bringing its total distribution for 2015 to 25.5 cents. The company said it planned to lift distributions to 30 cents per stapled security in 2016, which Mather said reflected “our confidence in continued business performance and growth in free cash flow”.

“The macro environment is supportive, and operationally we continue to capitalise on aeronautical and commercial opportunities through investment and innovation,” Mather said.

“We’re in excellent financial shape, with a strong balance sheet and financial flexibility to support the ongoing delivery of business expansion and ultimately cash flow growth.”

Sydney Airport said parking and ground transport revenue rose 7.6 per cent to $151 million, while revenue from aeronautical charges was up 7.5 per cent to $523 million, reflecting the growth in the number of travellers at the airport in the year.


  1. Dane says

    I don’t get how Sydney Airport has any say in the building of Badgerys Creek. If they want to keep traffic at KSA all they have to do is make the costs of operating at Badgerys Creek ridiculously high and no one will go there. Having another airport operator at Badgerys would mean competition and the customer/user would benefit greatly.

  2. Craigy says

    If memory seves me correctly, SAC got first option on the 2nd airport as part of the lease agreement with the Howard Government when the airports were privatised

  3. Marc says

    @ Dane
    This is what happens when governments – of any political persuation – negotiate deals with the private sector. Truly horrible clauses just to get their hands on a few one-off bucks.

  4. prutten82 says

    Just give the contract to the Wagner Family, it’ll be built thst way in 2 years….not 5 to 10.

  5. Rodney Marinkovic says

    Hopefully, fence vill be fitted on WSA. After next Christmas, earth moving equipment should move in.
    Over half centaury dream will be over. In just few weeks I should visiting side. Next year about this time,
    fence vill stop me to walking on present meadows. Second airport to raising Sydney metropolis.
    So great. So exsayding!✈. WESTERN SYDNEY AIRPORT✈!.
    Rodney & Son. Serbia✈