Sydney Airport expects to receive Badgerys Creek contract this year

written by australianaviation.com.au | August 18, 2016
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 has reported a double-digit improvement in half year net profit says its evaluation of the proposed Badgerys Creek airport is ongoing as it waits for the federal government to issue the sales contract before the end of 2016.

The company reported net profit of $160 million million for the six months to June 30 2016, up from $134.6 million in the prior corresponding period.

Sydney Airport chief executive Kerrie Mather said it was a successful half year, with passenger growth across both the international and domestic sector.

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Australia’s busiest airport by passenger numbers handled 20.3 million travellers during the half, an increase of 6.7 per cent compared with the prior corresponding period. Domestic passengers were up 5.3 per cent and international travellers rose 9.3 per cent.

Mather said the airport continued to evaluate the proposed new airport at Badgerys Creek in Sydney’s west even as the federal government was in caretaker mode during the election period, focusing on factors such as the hurdle rates of return, growth potential and impact on the existing facility at Mascot, among other issues.

“We continue to evaluate the opportunity using the same rigour we apply to all capital expenditures,” Mather said during Sydney Airport’s half year results presentation on Thursday.

“Western Sydney airport is a greenfield development and therefore subject to higher return requirements.”

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Mather said she expected to receive the federal government’s Notice of Intention (NOI), or sales contract to build and operate the proposed Badgerys Creek airport, some time in 2016.

“The Commonwealth indicated prior to the election it intends to issue the Notice of Intention to Sydney Airport in 2016 and there has been no change to that advice,” Mather said.

Sydney Airport chief executive Kerrie Mather at AAA national conference.
Sydney Airport chief executive Kerrie Mather.

“Ultimately the timing of the NOI is a matter for the Commonwealth and we continue to consult with them on all aspects of the development and operation of the airport.”

Once the NOI has been issued, Sydney Airport would have either four or nine months to decide whether to exercise the option to develop and operate the new airport.

When the Commonwealth sold Sydney Airport in 2002 it included a 30-year first right of refusal to build and operate any airport within 100km of the existing terminals at Mascot.

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 the 5,000 public submissions on the draft airport plan and EIS.

Both sides of politics have proposed restrictions on operations at Badgerys Creek.

Labor proposed in April a “no-fly zone” would be in place at night, requiring simultaneous airport operations where aircraft take off and land in one direction – south west of the airport – during overnight hours. The plans has been criticised by pilot groups.

And in May, the federal government asked for flight paths at Badgerys Creek to be redrawn to eliminate a “point merge” at about 5,000-7,000 feet over the Blue Mountains community of Blaxland, just west of Penrith. Instead, flightpaths would be spread out as part of a comprehensive noise mitigation plan to be contained in the final EIS.

Sydney Airport chief financial officer Hugh Wenby said the company had spent about $18 million so far on its evaluation of the proposed Badgerys Creek airport, including $3 million in the six-month period to June 30.

3 Comments

  • Murray Howlett

    says:

    Is a corporate monopoly really such a good idea – where is Real competition policy when you need it?

  • Iain

    says:

    Just get on with it!
    Close 16R34L and 25/07. Keep 16L34R as an ‘London City’ type premium airport with noise restrictions on type and hours of operation. Domestic only. Redevelop the rest of the KSA land and on sell to help fund Badgerys.
    Open a dual Rwy full service AD at Badgerys as a turn key operation with transport infrastructure in place from day one
    Pick a date now and get on with it

  • john

    says:

    FFS-this airport will be finished by 2050

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