The consumer watchdog is urging a review of the curfew on Sydney Airport, saying it has likely made it harder to manage congestion in Australia's busiest airport.

In a submission to the Productivity Commission on Monday, the Australian Competition and Consumer Commission (ACCC) said the Federal Government should periodically review the curfew and hourly aircraft movement caps at Sydney Airport.

ACCC Chairman Rod Sims said the restrictions — which prohibit aircraft from taking off or landing between 11pm and 6am — affect a lot of people.

"It is a serious issue at Sydney Airport as anyone flying into Sydney Airport close to 11:00 knows," he said.

"I've certainly been on a Perth flight that was going to land in Sydney at two minutes past 11 and I got diverted to Melbourne."

The restrictions are intended to limit the impact of aircraft noise, but the ACCC submission said they "should be reviewed periodically to ensure they remain appropriate, so as to reflect technological advances that reduce aircraft noise".

Mr Simms described Sydney Airport's curfew as "a balancing exercise" between noise management and the needs of the traveling public.

"We're just saying, things change, aircraft don't make as much noise so this is something that should be regularly reviewed rather than seeing it as a set-and-forget policy," Mr Simms said.

The ACCC believes a "balancing exercise" needs to be maintained between noise management and the needs of travellers. ( ABC News: Luke Rosen )

Kevin Hill, from the Sydney Airport Community Forum, said even if some planes are getting quieter, they still make a lot of noise.

"There's a point that says yes, aircraft are getting quieter but the point also says aircraft are getting larger and they're getting more frequent," he said.

He said the curfew and movement caps must remain in place due to the awkward location of Sydney Airport, just 8 kilometres south of the CBD and near established residential suburbs.

"While it might be productive to take away all these things, there's millions of people in Sydney affected by aircraft noise and to increase airport noise is not an option," he said.

Sydney Airport is one of only four airports in Australia with a curfew and the only Australian airport with a cap on aircraft movements.

As well as the evening shutdown, no more than 80 aircraft can take off or land at Sydney Airport in any hour.

In June the Federal Government asked the Productivity Commission to investigate whether the economic regulation of airport services promotes the efficient operation of airports and related industries.

The ACCC is warning low-cost travel could be at risk unless Australia's airports are subject to tighter regulation.

It recommends airlines should be able to access arbitration in order to increase their bargaining power when dealing with airports.

Sydney Airport was contact for comment.