"The Crean opposition abandoned it because of Labor seats and the potential of Labor seats around the site, and the Howard government compounded the issue by sterilising the site with its great lie of the year 2000; that Sydney was in no need of a second airport."

This time around there is bipartisan support for the second airport with positive comments from opposition transport spokesman Anthony Albanese, who is rightly promoting the need for a rail link to the CBD.

Paul Fletcher, the Minister for Urban Infrastructure, deserves credit for accelerating the decision making by Sydney Airport. He ensured the government met its obligations under the 2002 Sydney (Kingsford Smith) Airport Sale Agreement while cutting at least six months off the process.

The 2002 agreement gave Sydney Airport a right of first refusal to develop and operate a second major airport within 100 kilometres of Sydney's CBD.

Outgoing Sydney Airport CEO Kerrie Mather put a positive spin on the western Sydney airport when facing investors at the Macquarie conference in Sydney on Tuesday.

Her bullish presentation on Sydney Airport pointed to the opportunity to shift low value traffic to a second airport. International traffic generates 70 per cent of "passenger attributable revenues" while only using 15 per cent of landing slots. Domestic and regional aircraft traffic use 50 per cent of slots and generate 29 per cent of revenues, which are defined as aeronautical and retail revenues.

Mather says 35 per cent of slots remain available so there is capacity within existing slot management to boost Sydney Airport's revenue.

It would suit Sydney Airport to have a staged reduction in the use of slots by intrastate services and regional services because of the opportunity to maximise the revenue per slot.


Nationals politicians will fight any move to push regional air services out of Sydney Airport. Their constituents would not appreciate taking public transport or paying $200 taxi fares from western Sydney airport into the city.

A joint study of aviation capacity in the Sydney region published in 2012 recommended grandfathering existing regional slots at Sydney Airport and preventing the allocation of slots for new services operated by aircraft of fewer than 50 seats from 2015, increasing to 70 seats from 2020. A significant advantage for the second airport is that it will have no curfew.

Qantas chief executive Alan Joyce told the Macquarie Conference his budget airline Jetstar would happily relocate to western Sydney provided the airport was "fit for purpose".

He says it has to be cheaper than Sydney Airport to make it worthwhile.

The United Kingdom provides a reasonable working model of what can happen when there are a number of airports competing for business. Heathrow serves the international traffic, Gatwick serves the south-eastern part of the country and Stansted is to the north of London.

Joyce says just as Stansted is the home to Europe's most successful budget airline, Ryanair, western Sydney can be home to Jetstar.

One advantage in having the federal government build the second airport is that it can have a laser-like focus on competition. It is the perfect opportunity to end the anti-competitive fuel arrangements that are in place at most Australian airports.

Based on the airport privatisation experiences more than a decade ago, taxpayers will have a very valuable asset when the western Sydney airport is fully operational in 2026.