Sydney Airport Will Not Develop Western Sydney Airport

Western Sydney Airport Sign
Western Sydney Airport Sign

A decision has been announced by Sydney Airport on the future of Western Sydney Airport’s building & operations. After the government gave an NOI (notice of intention) for the construction & ongoing operation of Sydney’s second airport, Sydney Airport has chosen against building & running the airport on the grounds of financial implications in the short term which will hurt investors.

Building an entirely new airport is expensive, especially when you consider that it is unlikely that there will be big enough demand for an airport 50km out in Western Sydney without any decent public transport (high-speed rail would have been the preference through Parramatta & the CBD).

Here is a direct quote from Sydney airport themselves on what they said about the airport deal:

After taking into consideration the feedback from the recent market engagement process and investors, and the outcomes of its own evaluation, Sydney Airport determined that the terms of the WSA NOI do not meet its investment criteria – Sydney Airport

Here is what Sydney Airport’s CEO Kerrie Mather had to say on the announcement:

“The development of a new airport is an exciting opportunity for western Sydney. We have no doubt that the new airport, which is expected to be operational late 2026, will create jobs and encourage significant investment in the region. Importantly, additional aviation capacity in the Sydney basin will ensure that NSW continues to compete both nationally and internationally for the highly valuable business, visitor and tourism economy.

Sydney Airport’s decision not to accept the WSA NOI on the terms provided is in the best interests of our investors who represent millions of Australians through their superannuation funds. Despite the opportunities that WSA will present, the risks associated with the development and operation of WSA are considerable and endure for many decades without commensurate returns for our investors.

We are looking forward to continuing our positive and open engagement with the Commonwealth as we focus on delivering growth and a world class passenger and airline experience at Sydney Airport” – Kerrie Mather (CEO of Sydney Airport).

It is quite clear from the above statement by Sydney Airport that the reason they do not want to build & operate the Western Sydney Airport is because they feel like their investors would lose out in the short to medium term which is fair enough, they are an ASX listed business & have an obligation to their investors to maximise underlying profits.

The current plans are for planes to start taking off from the runway in 2026. The government has already had a conversation with 9 of the leading construction companies so it can be said it will mostly likely be built by one of them (these companies have not been disclosed publicly).

If Badgerys Creek airport is to meet its expectation becoming Sydney’s 2nd airport & a hub for Western Sydney, it needs to be given the best chance at success & for that to occur then the government should consider building & operating the airport itself. This would be a good decision, especially if they can build vital public transport to allow people to easily get in and out of the airport.

The announcement as to who will ultimately build & operate the Western Sydney Airport (WSA) will be announced by the government in the upcoming months.

LEAVE A REPLY