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Badgerys Creek firms as second Sydney airport

Badgerys Creek in far-western Sydney is set to be nominated as the site of the city’s second airport.

Deputy prime minister Warren Truss says the Abbott government will base its decision on major analysis already completed and would not delay the announcement by conducting more studies.

The latest study was completed by the previous federal government and NSW state government, and overwhelmingly backed Badgerys Creek as the best option. That study also suggested that the existing air force base at Richmond in Sydney’s north-west could be used for limited commercial aviation, until Badgerys was completed. Wilton, 45kms south of Badgerys has been ruled out by Mr Truss.

Sydney airport capacity is slowly filling up. All slots available for planes to land and takeoff at Sydney Airport between 6am and noon and between 4pm and 7pm would be full by 2020. Those are the times when most people want to travel.

Airport flights are currently capped at 80 an hour, and increasing the cap would buy some extra time, but not for very long. That number drops to 24 for ‘shoulder periods’ between 5am and 6 am and 11pm to 12am, and there’s an outright ban on commercial flights between midnight and 5am.

Virgin Australia (ASX:VAH) CEO John Borghetti wants regulators to ease up on flight caps, that currently keep the airport below capacity. Qantas Airways (ASX:QAN) isn’t optimistic about caps and curfew changes, but does see considerable potential for improved efficiency at Sydney Airport.

Sydney Airport (ASX:SYD) currently owns and operates Sydney airport, and holds the rights of first refusal to build, own and operate a second Sydney airport, but the company is not keen to split its interests. Interestingly, Sydney Airport believes it could double capacity in 20 years, with no changes to curfews, no change in the aircraft movement cap, no new flight paths or runways and no change to access arrangements for regional airlines.

Foolish takeaway

The government will wait for a separate master plan being developed by Sydney Airport to be completed, which is expected by the end of this year, before making its decision.

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Motley Fool writer/analyst Mike King owns shares in Sydney Airport.

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