Badgerys Creek firms as second Sydney airport

Incoming government expected to make a decision soon

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published September 10, 2013 10:10 am AEST

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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