Does Sydney Need a Second Airport - Case Study Example

Does Sydney Need a Second Airport? 1.0 Abstract Sydney, the capital of New South Wales, is the commercial centre of Australia. The Sydney harbor bridge welcomes all travelers, be it by sea or air. Businesses are conducted from all across the world, and many a traveler prefers to enter the country through this city. Well connected by air and sea ports, Sydney is among the busiest commercial cities in the world. Not surprisingly, Sydney Airport has become synonymous of the bustling global business hub in Australia. Sydney International Airport, or Sydney Airport as it is commonly known as, is located in the Sydney suburb of Mascot, a few kilometers from the city of Sydney. Sydney (Kingsford Smith) Airport has the distinction of being the world's oldest continually operated commercial airport, besides being Australia’s busiest commercial airport. It is estimated that this airport alone handled in excess of 30 million passengers in 2006, and expected to handle over 68 million passengers by 2020 (wikipedia.org). According to an airwise report in 2005, a 14.7 percent rise (AUD $245.7 million) was reported during the first half earnings by Sydney Airport. Southern Cross, the owners of Sydney Airport said that the airport saw a 13 percent growth by December 31, 2004 over the first half of the previous fiscal year. This trend continued during the first half earnings of 2005, giving thoughts of a continued growth in the following fiscal years. This change has been attributed to improved passenger benefits including, additional airline services, and improved yields from commercial initiatives and increased property revenues. This trend is expected to continue and the flow of passengers is expected to multifold. When the world's largest civil aircraft, the Airbus A380, was unveiled, Sydney awarded contracts jointly worth AUD$54 million to two companies to prepare the airport for the super jumbos. This only goes to show that Sydney is in fact getting ready to receive more passengers in the coming years (Airwise, 2005). 2.0 Introduction Globalization has made business more competitive. Many third world countries like China and India have embraced globalization with stunning results. These two countries are today the fastest emerging economies in the world. Their per capita income has risen dramatically, and thousands of Chinese and Indians today travel abroad on holidays. With their income level rising, many more Chinese and Indians are expected to travel abroad. The volume of travelers from these two countries alone will be far too much for many of the existing airports in the world to handle. Australia offers a lot in terms of tourism and is a favored destination for many Asians today. This trend is expected to grow and reach such a level that many airports, Sydney included, will have to enhance their capacity to accommodate this contingency. Another feature will be the introduction of many more airlines. The current flow of traffic will also increase, making traffic operations hard to manage. In such a scenario, it is but necessary to either expand the present infrastructure to accommodate more passengers and aircrafts, or look to build another airport to handle the additional load in future. From the current trend seen from airwise, the volume of traffic is definitely expected to grow alarmingly, generating huge revenue inflow, but also leaving airport authorities scratching their head under intense pressure to perform. Income and revenue from all business units at Sydney Airport rose 9.9 per cent to $A724.6 million (FY 2006: $A659.2 million). This growth in aero revenue reflects the continued increase of passenger traffic in both, the international and domestic sectors. In addition, with the introduction of Jetstar’s new international services and Etihad’s new Middle East services, there have been a steady but increasing number of international passengers at Sydney Airport. At the domestic level, a strong Jetstar and Virgin Blue passenger growth contributed to rising air traffic at Sydney Airport. All domestic traffic is routed through terminal T2. With the growing traffic, the retail business at the airport continued to perform solidly. During the financial year 2006-07, a lot of redeveloped T2 retail shops catered to the growing number of domestic passengers with a comprehensive choice of retail and food outlets. Continued growth in vehicle parking volumes and the new products offered at the airport has increased the revenue generated by the Airport. In view of the anticipated growth of passenger volume over the coming years, construction is underway on a $65 million eight storey car park for Sydney Airport’s International Terminal, T1, which when completed in 2008, will accommodate around 3,000 undercover parking spaces (Sydney Airport, 2007)1. 3.0 Analysis When the airport development planners sat down to assess the present market and future passenger workload, they must have considered a lot of factors, including the volume of passenger traffic to Sydney and landings. The town planners have been assessing the volume of road traffic between the city and airport, and that the volume of vehicle movement between these destinations has reached alarming proportion, to mandate an alternative transport mode. Western Sydney Regional Organisation of Councils Ltd (WSROC), had been for long discussing the expansion plans of Kingsford Smith airport, but made no references to Bankstown airport and the role it played, or to the long-standing proposal for a second Sydney airport. An issue of environmental concern and debate hovers over the continued uncertainty of the Commonwealth’s decision to continue hold of some 1,700 hectares of land at Badgerys Creek reserved for future airport use. This remains so, as an apparent contradiction surrounds, first, the Federal Government’s announcement that there was no need for a second airport at Sydney, and, the continued retention and formal reservation of the Badgerys Creek site for future airport use. Badgerys Creek is located in a key position in relation to the development of Western Sydney. The site has implications for planning and development in the region, and since 1997, WSROC opposed proposals to locate a second airport at Badgerys Creek or any other location in the Sydney basin because of the adverse environmental impact. In 2006, WSROC, the Western Sydney Alliance, and community leaders discussed the issue of Badgerys Creek’s location and size, and the uncertainty behind the government’s silence. The Roundtable unanimously called upon Commonwealth to end this uncertainty by: Urging the Federal Government to rule out any future airport plan at Badgerys Creek Undertake an open and transparent review of Sydney’s future airport needs, by re-examining potential locations for a second Sydney airport outside the Sydney basin (WSROC, 2007). Sydney Airport is well connected to the city by rail and road transport. However, the volume of traffic between these two points is so thick, that invariably there is congestion and traffic jams. In order to relieve this pressure on the transport system, and for the convenience of the traveling passengers, a second airport in Sydney should not be ruled out. The volume of traffic at the airport too is climbing, and with more and more people opting to travel by air, the number of flights to and from Sydney Airport is set to jump. The infrastructural developments at both, the domestic and international airports have been augmented to meet future demands, but considering the volume of people touching down at Sydney Airport is ascending by the day, the current infrastructure may not be able to address future needs. Sydney is the gateway to many of Australia’s famous tourist attractions, and the influx of tourists is growing by the number everyday. A lot more international carriers have begun to operate from Sydney, adding to the current volume of international flights to and from Sydney Airport. At the Sydney Airport, T1 is designated for international passengers. All incoming and outgoing passengers use bay T1 to transit. It is estimated that there are at present, 132 international flights arriving from all around the world in a day, and approximately 133 international flights taking of for various destinations around the world. All these flights have to be catered to through T12. Now, apart from this, T2 caters to all domestic services. There are about 313 flights a day incoming, and almost an equal amount of flights leaving Sydney Airport. Considering this huge volume of flights originating and terminating at Sydney Airport, it is quite a challenging task to control or monitor so many people in a day. Though the current strength of passengers can be accommodated without much fuss today, with rising traffic and more inward and outward bound flights, the volume is projected to leap jump, necessitating further expansion of the infrastructure. The airport was renovated to accommodate a lot more passenger amenities recently. In the international sector (T1), at the arrival pier (Level 1), there are 5 F&B outlets, 5 Retail Stores, and 13 Services and Essentials, including an A4 Police and Protective Service. At the departure lounge (T1-Level 2), there are 16 F&B outlets, 28 Retail Stores, and 10 Services and Essentials Stores. Likewise, domestic arrivals at Gates 8-37 have, 3 F&B outlets, 19 Retail Stores, and 3 Travelex Services and Essentials for passengers. Domestic departures from Gates 50-63 have, 2 F&B outlets, 21 Retail Stores, and 3 Travelex Services and Essentials3. These services are available since 2007. Jetstar, Qantas and Rex operate from pier B, while Virgin Blue uses Pier A4. The existing infrastructure has been redesigned to accommodate more passengers at the airport, but if contingency were to strike, the airport may not be able to handle such large volume of traffic at a time. Considering this, and the future growth potential of the city to attract more and more visitors, the city could do with a second airport. 4.0 Conclusion Sydney has for long been an adventurers dream. The city offers just about everything for everyone. The city has grown so large, that the city experiences quite heavy traffic jams on most days to office. Being the business and commercial capital of Australia, most business conglomerates have their offices here. Many people from around Australia and other countries come here in search of their dreams. This has only added to the woes of the city administrators. Just as much as the city, the Sydney Airport too is targeted by visitors from all over the world. The volume of business has grown so alarmingly, that airport authorities are seeking a way to avoid laxity in times of need. The volume of air traffic has grown, and so too have the volume of passengers at the airport. The just renovated infrastructure was taken after due consideration of the flow of traffic over the past few years. This growth is expected to continue, and the available space and infrastructure may not be sufficient to handle much larger population in the near future. Considering this, the city administrators must look to either enhance the available infrastructure; which looks unlikely, or look at the possibility of constructing a second airport for Sydney. 5.0 References Response to the AusLink Sydney Urban Corridor Strategy May 2007 Prepared by the Western Sydney Regional Organisation of Councils Ltd http://www.wsroc.com.au/downloads/Auslink%20Submission%20v3.pdf Sydney Airport, Corporate Information, Financial year to June 2007 financial results for Sydney Airport: Southern Cross Airports Corporation Holdings today announced an 11.5 per cent increase in earnings (excluding specific non-recurring expenses) for Sydney Airport for the financial year to 30 June 2007, http://www.sydneyairport.com.au/SACL/Corporate+Information/Media+Centre/Financial+year+results+to+June+2007.htm. WSROC, 2007, Response to the AusLink Sydney Urban Corridor Strategy, May 2007, Prepared by the Western Sydney Regional Organisation of Councils Ltd, www.wsroc.com.au First Half Profits Rise at Sydney, Airwise, http://news.airwise.com/story/view/1106213542.html Sydney Airport, http://www.sydneyairport.com.au/NR/rdonlyres/17BCFA77-6952-4E38-90EC-FA85BEA32892/0/T1Directory230407.pdf, 2007A http://www.sydneyairport.com.au/NR/rdonlyres/17BCFA77-6952-4E38-90EC-FA85BEA32892/0/T1Directory230407.pdf, 2007B http://www.sydneyairport.com.au/NR/rdonlyres/C697C259-CF1F-4899-8F74-890B4BF588CB/0/T2Map30032007.pdf, 2007C Read More