Transportation Planning Casebook/Western Sydney Airport

Introduction
Western Sydney International (Nancy Bird Walton) Airport is a new airport being developed in Badgerys Creek, approximately 45km west of the Sydney CBD and the existing Kingsford Smith Sydney Airport located at Mascot. Early earthworks for the site commenced in 2020 and it is stated that the airport will be completed and operating by 2026. The airport is to be the second international airport in the Greater Sydney region and is stated to operate 24 hours (i.e. curfew free) for domestic, international, and freight services. The airport is to be government-owned through the Western Sydney Airport Company - whereby the Australian Federal Government has invested $5.3 billion in equity.

In addition to delivering a new international airport in Greater Sydney, the Western Sydney Airport is also slated to be the catalist for the Western Sydney Aerotropolis program. This program seeks to develop the mostly 'greenfield' Badgerys Creek region into a major city in the Sydney Metropolitan area and is a crucial component of the 'Three Cities' Plan by the Greater Sydney Commission.

Timeline of Events
A timeline of key milestones in the selection and development of Western Sydney Airport is shown below. Future activities not yet completed at the time of writing are highlighted yellow.

Location Maps
Map showing the location of Western Sydney Airport with respect to Sydney Airport and the Sydney CBD.

Demand for Aviation Services
Access to aviation services is critical for passenger travel and high-value and time-critical freight. Passenger travel is essential to maintain Sydney as a centre of international commerce and as Australia's leading tourist destination.

There is a significant demand for aviation services in the Sydney basin across passenger travel, freight movement and general aviation which is forecast to grow into the future. The adjacent graph and figure below show the unconstrained demand for aviation services over the period 2010-2060, this assumes there are no capacity constrains in existence. It can be seen that the regular public transport (RPT) passenger demand is forecast to grow at approximately 3% per annum and will be approximately 310% of 2010 demand by 2060. Aircraft RPT movements are predicted to grow at 1.7% per annum and will be approximately 120% of 2010 demand by 2060. The comparatively slower rate of aircraft movement demand growth is due to the increasing average size of passenger aircraft over the period 2010-2060. It can be seen that the capacity of the aviation network must be sufficient to meet the increasing future demand, unless the existing facilities can be expanded this will require additional infrastructure to be developed.

Sydney Airport Capacity Constraints
An airport has existing on the the current Sydney Airport Mascot site since the Australian Commonwealth purchased the land to develop Mascot Aerodrome in 1923, with scheduled commercial flights commenced from 1924. The airport location presents physical constraints to the potential to increase the airports capacity to meet the forecast demand. The existing airport occupies a small site by comparison to international major airports and site expansion is limited by Botany Bay, Port Botany and general urban encroachment as shown in the adjacent figure. There is therefore limited land available to expand the landside facilities at Sydney Airport to provide the additional runway, taxiway and stand capacity required to increase the overall airport capacity.

The present day airport layout in terms of the runway, taxi and airport stand configuration is not considered contemporary best practice for optimum operating efficiency - in particular separation of the terminals on either side of the main runway and limitations on taxiways suitable for large aircraft use. The arrangement is reflective of the progressive development of the airport over time since the 1920's and the different aviation technologies that have been considered over this time frame. The airport has three runways, consisting of a main 3,962m north-south runway (16R/34L), a secondary 2,438m north-south runway (16L/34R) and one 2,530m east-west cross-wind runway (25/07) that bisects runway 34L. The two primary runways are design to facilitate parallel runway operations, meaning an aircraft can simultaneously take-off or land on each runway. The parallel runways have different limiting operational criteria and the shorter runway is typically restricted to servicing aircraft smaller than a Boeing B767. This creates a capacity imbalance between the two runways and reduces the ability to operate the parallel runway system efficiently - the longer runway handles approximately 66% of parallel runway operations. This limits the ability of the airport to increase passenger throughput through the use of larger aircraft, which is a key assumption in the forecast demand. Sydney Airport operates under a legislative movement cap and nightly curfew. The commonwealth imposed a restriction of 80 movements/hour on the maximum number of aircraft movements on opening of the parallel runway and a curfew that severely limits flight operations between the hours of 11pm - 6am. The legislation was designed to protect the local communities from increased airport operations, and primarily aircraft generated noise. The hourly aircraft movement cap is already reached during peak hours of operation. Airservices Australia determined that the maximum number of movements that could be sustainably maintained without the legislative cap would be approximately 85 movements per hour, and this may not be achievable in suboptimal weather conditions. When the cross-wind runway is in use the airport capacity is limited to approximately 70% of its normal capacity as it reduces the total number of runways in operation. 85 movements per hour is equivalent to 446,546 movements per year, and it can be seen from the demand table above that this capacity will be exceeded in the 2020's.

Sydney Airport is already operating at close to its peak capacity over certain times of the day. Capacity analysis identified that:


 * By 2020 all peak period weekday slots at Sydney Airport will be fully allocated (6am-12am, 4pm-7pm).
 * By approximately 2027 all slots at Sydney Airport will be fully allocated. New routes and airline entrants can only come at the expense of loss of an existing service.
 * By approximately 2035 there is limited scope for further growth of regular scheduled passenger services at Sydney Airport.

The demand and capacity analysis shows that unless there is an increase in airport capacity within the Sydney region the demand for airport related services will exceed the available supply. The adjacent graph shows the unsatisfied passenger RPT demand that would result should additional capacity not be provided once the capacity at Sydney Airport is exhausted. The cumulative unmet demand to the year 2060 is approximately equal to 665 million passengers and 3 million aircraft movements.

Community Considerations
Sydney Airport currently operates under a noise sharing policy which alternates approach and departure flight paths to provide noise respite to local residents. This mode of operation is only possible up to an hourly movement of approximately 55 aircraft per hour and after this threshold is reached full parallel runway operations are required to provide sufficient throughput capacity. As the number of flights increases at Sydney Airport the duration of time the threshold is breached will increase over time, limiting the periods of community respite. There is therefore likely to be increased community opposition and political pressure to limit future growth at Sydney Airport to mitigate the increasing noise impacts to the local community as the airport reaches capacity. The map below shows the number of suburbs within the typical departure (blue) and arrival (green) flight paths at Sydney Airport.

Economic Impacts
The identified shortfall in airport capacity will result in reduced economic growth, productivity & employment for both the Australian and local NSW economies. The forgone economic activity that would result from not meeting airport capacity demand would be $34bn forgone gross domestic product (GDP) by 2060 and 17,300 FTE jobs. The majority of this forgone potential would be borne by NSW with $17.3bn forgone gross state product (GSP) and 12,700 FTE positions.

Whilst delay in developing additional capacity in Sydney may benefit other Australian states, the majority of the lost investment opportunities would be lost to international markets, and the demand for passenger travel would be suppressed.

Improved Airport Access and Services
A lack of available slots with limit the growth of new services and additional frequencies at Sydney Airport. This will preclude Sydney from benefiting from the  growth of low cost international carriers and the increasing move towards point to point direct services to secondary markets. Developing additional airport capacity will allow passenger and freight airlines to introduce services without making cuts to existing schedules, and facilitate the entry of new carriers to the Sydney market that may not have been able to secure slots at the optimum time, during the currently highly subscribed peak hours.

Western Sydney currently has a population of over two million people, and is forecast to grow to three million by the mid 2030's; become home to approximately half of Sydney's population. Providing an airport in the western Sydney region will improve access to aviation services to the local population, who currently undertake less air travel than the Sydney average. A local airport in the region will save them the time and cost of travel to Sydney Airport which is subject to traffic congestion, high parking rates and an additional station access charge when using the airport train. This should remove barriers to air travel and reduce any inequality of access across the Sydney basin.

Location of a Second Sydney Airport
Proposals for a second airport in Sydney had been considered since the 1940s and between then and the present day, several sites have been considered as suitable locations. 80 sites within the Greater Sydney region have been evaluated for the location of the second airport, such as Badgerys Creek, Wilton, Galston, Richmond, Londonderry, Bringelly, Holsworthy, and Warnervale. Alternative proposals have even suggested locating a second airport out of the Sydney basin in locations such as the Southern Highlands, Newcastle, and Canberra. The Canberra proposal suggested that the airport could be connected to the Sydney CBD by high-speed rail which would allow travel times of 50 minutes between the cities.

However, in 2015 it was declared by the Federal Government that the commonwealth-owned land of Badgerys Creek was to be the site of the second airport. 1,700 hectares of land at Badgerys Creek had long been purchased by the Federal Government between 1986 and 1991 - and this land has remained Commonwealth land since. Badgerys Creek was selected as the most suitable location due to the little residential development at the area and its connection to Sydney's road network and rail links. Long-term planning restrictions have been placed on the site and surrounding area which protects the area from "incompatible urban development". The advantage of this site is that due to its low residential development, the airport will be curfew-free - a major competitive advantage over the main Kingsford Smith Airport; which currently has a curfew between 23:00 to 05:00. Flight paths are to fly over sparsely populated farmland - and so noise considerations are not a significant issue. Furthermore, the land to the north-west of the airport site has been zoned for industrial development (instead of residential), which further reduces the impact of noise from the airport.

The 2015 decision to locate Sydney's second airport in Badgerys Creek was not the first time that site had been considered. In 1964, the State Planning Authority (SPA) had placed a "No Development Zone" around Badgerys Creek for a period of 20 years to allow the state and federal governments adequate time to plan both the airport and the infrastructure serving it. In 1986, the Labor Federal Government led by Prime Minister Bob Hawke had shortlisted Badgerys Creek and Wilton as the site for the second airport - where Badgerys Creek was later selected. The federal government began quickly acquiring land at Badgerys Creek in anticipation of this, however, in 1989, it was instead decided to increase the capacity of Sydney Kingsford Smith airport by constructing a third runway. It was not until the Liberal Federal Government led by Prime Minister John Howard that the idea of a second Sydney airport was revived - where sites in Holsworthy and Badgerys Creek were considered. In 1999, Badgerys Creek was reaffirmed as the proposed site of the second airport - but in 2000 the decision to not proceed with the second airport was made.

In 2012, the Labor Federal Government led by Prime Minister Julia Gillard had conducted a joint study with the New South Wales State Government (then led by Premier Barry O'Farrell) another study for the construction of a second Sydney airport, and similar to the 1986 study by the Hawke led Government, Badgerys Creek and Wilton were the shortlisted options. Costs at either site were found to be similar, with estimations of $7 billion to $11 billion being required to construct an airport capable of accommodating international flights with all connecting infrastructure (i.e. train links, road access, etc.) being considered. Although costs were similar, Badgerys Creek was found to be the preferred option due to its closer proximity to Sydney. Despite this, the Gillard Federal Government still preferred the Wilton site for the second airport. However, the Liberal State Government were not in support of the Federal Government's plans for the construction of a second Sydney airport and were more in favour of a high-speed rail alternative.

Originally, local Western Sydney councils were in opposition of a second airport located in Western Sydney due to noise concerns. However, after a 2013 report from Cox Richardson Architects, it was found that only 2,913 homes would be impacted (moderately) by aircraft noise at Badgerys Creek due to the low urban density of the region. The same report also found the Western Sydney region would experience greater economic activity and benefits from a second airport in the region. Following this report, many of the local councils originally in opposition of the airport changed their position to be in favour.

The site will be 1,780 hectares (more than double the size of Kingsford Smith Airport). The proposal by the Federal Government for the new Western Sydney Airport project also include various infrastructure projects that aim to link the airport into the Sydney road and transport networks. This includes proposals to upgrade and build new sections of the M4 and M7 motorways as well as a proposal for a new Sydney Metro project (Sydney Metro Greater West).

However, the the selected site for the Western Sydney Airport is not without criticism. One criticism is that the infrastructure proposals to link Greater Sydney with the airport may cause additional congestion to the already congested M4, M5, and M7 motorways. Another criticism is that the orientation of the proposed runway is pointed directly towards a Warragamba Dam water storage site - meaning that this facility is located directly under the flight path. There is concern that aircraft fuel waste may pollute this water storage site.

Flight Paths
As of 2020, the flight paths for the new airport are currently under development. However, the Department of Infrastructure, Transport, Regional Development and Communications of the Australian Federal Government have released indicative flight paths for aircraft operations in both the 23 Direction (i.e. landing from north-east and departing to the south-west) and the 05 Direction (i.e. landing from the south-west and departing to the north-east). Flight paths first entered development in 2017 and will be finalised in 2024. It was estimated that only 2,913 homes would be moderately impacted by noise from aircraft activity at the airport due to its location in "greenfields" in Sydney's greater west. Maps of indicative flight paths for the Western Sydney Airport by the Federal Department of Infrastructure, Transport, Regional Development and Communications are presented in the figures below.

The 'Western Sydney Aerotropolis' Concept


The New South Wales Government is also planning the development of new suburbs, employment opportunities, and a new business district to be built in the Badgerys Creek and surrounding areas following the construction of the new airport. This program is known as the "Western Sydney Aerotropolis". The Western Sydney Aerotropolis fits into the greater plan by the Greater Sydney Commission for the "Three Cities" plan. The goal of the "Three Cities" plan is for the "30-minute city" where people live, work, and have access to schools, health, and other services all within a 30 minute journey. The "Three Cities" was first unveiled to the public in 2019 and plan seeks to plan, develop, and grow the greater Sydney area centred around three different cities or CBDs. These are:


 * 1) The Eastern Harbour City - The original city of Sydney centred at Sydney Harbour. This city will serve the Eastern Suburbs, Inner-West, the Northern Beaches, and southern suburbs of Greater Sydney. This city will focus on financial services, financial technology (FinTech) services, health, and education.
 * 2) The Central River City - The new business district centred on the Greater Parramatta and Olympic Park district. This city will serve the central portion of Greater Sydney, including Parramatta, Canterbury, Blacktown, Rhodes, and the Northwest. This city will focus on health, education, administration, finance, and business services.
 * 3) Western Parkland City - The new city to be developed around the new Western Sydney Airport. This city will serve the far-western portions of Greater Sydney, including Macarthur, Badgerys Creek, and the Greater Penrith region. This city will focus on trade, logistics, advanced manufacturing, health, education, and science.

Several Western Sydney councils saw the new airport in the region as an opportunity to improve the economic capabilities of the area. PwC was commissioned by Liverpool City Council to develop a report to investigate and outline the key economic benefits that they could benefit from the new airport. This report was published in November 2017. The report found that due to the 24-hour operations of the new Western Sydney Airport, it has the potential to become a "nationally significant airfreight hub". It was estimated that in addition to the 11,000 jobs that could be created during the construction of the new airport, a further 28,000 "direct and indirect" jobs could be created by the early 2030s. Furthermore, the long-term estimate for new jobs in the area surrounding Western Sydney Airport is 120,000. PwC reccommended that the initial 5 kilometre radius surrounding the airport be dedicated to industry and manufacture due to the loud noises that would be produced by the aircraft - and develop the land greater than 5 kilometres from the airport for business and residential. The report identified four key opportunity industry areas that Western Sydney Airport could and should aim to achieve to maximise the economic benefit it provides to Western Sydney :




 * 1) Logistics and Distribution - Due to Western Sydney Airport's 24-hour operation, it is believed that logistic and distribution businesses may locate around it. Furthermore, due to the lack of appropriate and affordable land surrounding Kingsford Smith Airport, many logistics and distribution businesses are scattered across Sydney. The greenfield land surrounding the new airport may be attractive for these businesses to relocate to and new businesses to start up. Therefore, PwC reccommended that a "logistics hub" be created around the airport to facilitate the growing demand of airfreight distribution.
 * 2) Advanced Food Manufacturing and Exportation - Perishable foods require fast, direct transportation due to their short product lifespan. The new Western Sydney airport could serve as a hub for food manufacturing and exportation businesses to quickly and efficiently distribute goods to consumers both domestically and internationally. The report also suggested the possibility for the clustering and aggregation of food manufacturing through a dedicated food precinct near the airport so that value-adding processing of food products can also be efficiently performed. This would not only allow the reduction of transportation costs, but also allow collaboration between different food manufacturers to add value to their products due to their close proximity.
 * 3) Defence and Aerospace - The New South Wales government has already envisaged the creation of a defence and aerospace hub at Western Sydney Airport that aims to attract businesses of all sizes specialising in the manufacturing and maintenance of aircraft and equipment. The clustering of these businesses within close proximity of the new airport opens up opportunities for the industry through increased export partners and markets, better connections between prime contractors and equipment manufacturers, new training and skills development, and better research and development opportunities with Western Sydney universities.
 * 4) Tourism - Due to the greater numbers of passengers travelling through Western Sydney from the new airport, there is great opportunity for these passengers to boost the tourism economy of the region. Accommodation businesses (e.g. hotels, motels, etc.) could benefit from overnight passengers arriving and departing from Western Sydney Airport - which could create new job opportunities for the area. Furthermore, there may be increased demand for tourist spots in Western Sydney and the Blue Mountains area from the increased number of overnight passengers travelling through the area.Sydney_Metro_Greater_West.png

In December 2019, the New South Wales government unveiled the first phase of the development of the Aerotropolis by zoning and dividing it into 10 precincts. The first three precincts were identified as "Aerotropolis Core", "Northern Gateway", and "South Creek". It is expected the Aerotropolis Core will deliver 60,000 jobs and 8,000 homes. Similarly, the Northern Gateway is expected to deliver 22,500 jobs and 3,400 homes. South Creek will be zoned to deliver public space, hospitality, community facilities rather than residential housing due to aircraft noise and flooding concerns.

In addition to the creation of a new city, Western Sydney Airport is also expected to benefit the 'edge cities' located within the sphere of influence of the new airport. These edge cities include Liverpool, Penrith, Fairfield, Campbelltown, and Camden. As the development of the new aerotropolis requires extensive investment and construction and will continue far into the 2030s, there is potential for the edge cities to capture some of the benefits in the early years of operation of the airport. During the development of the aerotropolis, the commercial sectors of the edge cities, such as retail, hospitality, and accommodation, are expected to benefit as new residents and workers require those services. Furthermore, due to the edge cities' location midway between the new aerotropolis and the existing Sydney and Parramatta CBDs, they may benefit from some businesses opting to position their headquarters there so that they can better serve the greater Sydney area. Liverpool for example, is located roughly halfway between Western Sydney Airport and Kingsford Smith Airport, and may thus be an attractive location for businesses who wish to maintain freight operations between both airports.

The success of the Western Sydney Aerotropolis depends significantly on the transport structure of the region. The 'Western Sydney City Deal' serves as the catalyst for the transport infrastructure of the aerotropolis and in achieving the goal of making this new region into a "30 minute city". As part of the Western Sydney City Deal, there is a plan to deliver the Sydney Metro Greater West into the region. Stage 1 of Sydney Metro Greater West aims to deliver a connection between the Western Sydney Aerotropolis and Saint Marys - which then connects onto the Sydney Trains network. Further stages of expansion of Sydney Metro Greater West are currently under investigation with options including a connection to Sydney Metro North West (at Schofields), a connection to Sydney Metro West (at Westmead) or a connection to the Sydney Trains network at Macarthur.

However, the concept of the Western Sydney Aerotropolis is not without criticism. One such criticism is that a high-activity city centred around an airport will lead to further greenhouse emissions and noise pollution. The aviation industry is one of the leading industries in carbon-dioxide emissions, and boosting the economic demand for such airlines will further increase carbon emissions. Furthermore, critics raise the question as to whether there will be a demand for people to live near an airport due to noise concerns. Further criticism is laid to the proposed layout layout of Sydney Metro Greater West, which runs in a north-south direction connecting the Aerotropolis with Saint Marys. The decision to develop the metro in this fashion was in part to achieve the "30 minute city" goal of the Western Parklands region. However, this layout connects poorly with the Greater Sydney region and offers poor transfer connection between Western Sydney Airport and Kingsford Smith Airport. If such a passenger wished to transfer between both airports on the rail network, it would require them to use three different train lines. In addition, for a passenger to travel between Western Sydney Airport and the Sydney CBD, it may take them over an hour on the train. This can impact the tourism benefit of the new airport, as many tourists may opt to use Kingsford Smith Airport instead.

Airport Developer & Operator
Sydney Airport was privatised by the Commonwealth government in 2002, the sale to the Sydney Airport Group included a 30-year right of first refusal to develop and operate any new airport development within 100km of Mascot. The government issued a Notice of Intent (NoI) to the Sydney Airport Group in December 2016 to develop Western Sydney Airport Plan Stage 1, featuring a terminal capable of handling up to 10 million domestic and international passengers a year with a single 3,700m long by 60m wide runway. Sydney Airport Group rejected the NoI on the basis that the development did not meet its investment criteria. The government had already indicated that it was willing to fund and operate the airport and established Western Sydney Airport to deliver and operate the development. State investment can be made on different assumptions and priorities than by the private sector. As a significant piece of state infrastructure the new airport will be a catalysts for new jobs both at the airport, and in aviation related industries and organisations establishing in the vicinity of the development. Whilst a private operator can only make a return on the airport revenues the state can benefit from the additional payroll and corporate tax revenue. There is also the potential sale revenue if the airport is privatised in the future, similar to other mature infrastructure asset sales including Sydney Airport and Port Botany.

The Australian Competition & Consumer Commission (ACCC) identified that consumers and airlines would benefit if the new Western Sydney Airport was separately owned from Sydney Airport as an independent owner would be incentivised to compete with the existing airport, rather than limit investment to maximise returns at Sydney Airport. Introducing competition to the Sydney aviation market should improve the quality of service and provide price control across the different aviation products available, which include passenger travel, freight logistics, and general aviation.

Case Narrative
The timeline shows that the investigations into the need for additional airport capacity and potential airport locations first commenced in 1976. Over the subsequent 63 years both Federal and State government initiated studies to re-investigate both the need for, and potential location of, a second airport for Sydney. Badgerys Creek was generally the preferred location proposed by a majority of the studies, and this was the conclusion for the most recent Joint Study on Aviation Capacity for the Sydney Region study in 2012 which has formed the basis for the current Western Sydney Airport development.

Demand forecasting shows a sustained increase in required aviation services over the period 2010-2060 across all passenger travel, freight logistics, general aviation and military aviation. Capacity modelling demonstrated that Sydney Airport will be at operational capacity by 2037 and cannot expand to meet the increased demand due to a combination of physical and legislative constraints relating to the existing airports urban location.

If additional aviation capacity is not provided to meet demand the national and state economies will forgo significant economic growth opportunities of up to $34bn GDP and 17,300 FTE jobs. The majority of this forgone economic activity will be displaced to international markets rather than competing interstate regions.

Within the sale of the existing Sydney Airport the Commonwealth government included provisions for the private operator to maintain first right of refusal to develop and operate any new airports within 100km. The private operator rejected this right and the Commonwealth government established a state entity to develop and operate the airport. An additional provider of aviation services in the Sydney region should promote competition between the two airports, improving quality for consumers and encourage market controls on pricing power.

Discussion Questions
The following questions will be discussed as a class activity:


 * Does Sydney need a second airport?
 * Should the government remove the movement cap and curfew on the existing Sydney Airport to increase capacity?
 * What are the benefits and risks of developing to meet unconstrained demand?


 * Is Badgerys Creek the best location for a second airport?
 * What other locations could be considered?
 * Is additional infrastructure required to make the location work?
 * Will the Aerotropolis concept be successful?
 * What are the success and/or failure factors?
 * Where else has this concept been used?
 * Should the airport be publicly or privately owned and operated?
 * How might development and operation of Western Sydney Airport differ if Sydney Airport Group had exercised their right of first refusal?
 * What are the benefits of competition?