Formula One Minardi team boss Paul Stoddart hopes to have
a new budget airline called OzJet flying Australia's east coast by Christmas.
Mr Stoddart, in Australia for the Grand Prix, said that OzJet would
take on Virgin Blue and Qantas discount airline JetStar.
"We'll start off with about half a dozen aircraft, probably launching in
about October," he told the Ten Network.
"We're hoping to get in just before Christmas."
OzJet would initially focus on the Sydney, Melbourne and Brisbane markets
and would most likely operate from suburban airports like Essendon and
Moorabbin in Melbourne, Bankstown in Sydney and Archerfield in Brisbane.
The British-built BAe146 had a chequered past while operating
on regional routes in Western Australia with Ansett. They are regarded
as a "dog" by many pilots
for their slow performance, low operational ceiling and well known
characteristic of emitting fumes into cabin areas.
Stoddardt wants to fly these dogs over residential areas, and trivialises
the noise impacts by saying they are no noisier than a semi trailer's air brakes.
Well, news for Mr Stoddardt, not too many people can sleep through a semi
trailer air braking outside their home. And if you were bothered by truck noise, you
could grow a hedge or erect a noise barrier - as is now commonly done on all
But you can't grow hedges in the sky, and can't erect a barrier to noise
coming from anywhere above your home. Moving to the back of the house won't help
you either - the noise is completely unavoidable.
Formula 1 drivers and crew now wear heavy ear protection to avoid a fate like that
of Jack Brabham, Australia's first Formula 1 champion who was virtually deafened
as a result of noise damage during his racing career. Only noise-insensitive people
or those with little respect for their hearing would frequent a Formula 1 track.
So Stoddardt is hardly a credible person to be advising us about the
safety of aircraft
No thanks, Mr Stoddardt, we don't want your
noisy dodgy ex-Ansett aircraft waking us up day and night. Find a better home
Almost Wilton = Labor's Reliever Airport ?
The Labor party's new leader, Mark Latham, announced selection of a list
of Southern Highland sites as candidates for a reliever second airport
(ALP Annual Conference, Sydney, 30th Jan, 2004).
The list included Wilton, which came second to Badgery's Creek in the
1984 airport site selection process (click
for SMH map of sites
). Latham's announcement at least
resolved the uncertainty of the ALP's position on Badgery's Creek, but it
failed to deliver the firm site selection promised by his predecessor
Labor pledges no-frills airport
Labor has opened a new front in the fight over aircraft noise in Sydney,
with a compromise plan to build a second airport between Wilton and
the Southern Highlands catering mainly for "overflow" domestic traffic.
The plan seeks to ease the noise around Sydney Airport by attracting
"no-frills" operators such as Virgin, Qantas's new JetStar and Rex.
The compromise, forged with the backing of the Opposition Leader,
Mark Latham, commits Labor to a new environmental impact study of a
range of possible sites south of the Nepean River during its first
term in government.
The sites include Wilton, on Sydney's south-western fringe,
and Wells Creek, Sutton Forest and Berrima in the Southern Highlands.
The plan suggests only the low-budget domestic traffic will
move to the new airport. But domestic passengers are likely
to be those most affected by longer travel times to the airport.
KSA affected residents are concerned that the reliever plan
could leave them worse off. Moving lighter domestic aircraft
elsewhere will see the KSA slots filled by much noisier aircraft.
The previous Badgery's Creek proposal could have done the same
thing to KSA residents.
And Badgery's Creek could have been developed as a lower impact reliever airport,
rather than apparently abandoned as is now the case.
However, it is now clear that it is off the Labor party's agenda.
For Bankstown residents, there remains a serious threat that airlines
will prefer to expand Bankstown to play the domestic airport reliever role.
Only an airport in the Southern Tablelands that offered the full range of connecting international services would remove this threat.
At least the ALP has formally abandoned Badgery's Creek.
The Howard government has yet to give a commitment to never
building an international airport at Badgery's Creek.
Badgery's Creek is not yet off the Liberal party's transport agenda.
Airports Given Away
While public infrastructure crumbles around us, and Medicare
is stripped to its bones, the Federal Government gave away
over $1,200 million. It did this by "selling" the Sydney
Basin Airports - Bankstown, Hoxton Park, and Camden, for
an amount that barely reaches the undeveloped land-only
value of the smallest (Hoxton Park airport).
"It is one way of handling an embarrassing
loss: Declare victory and hope no one notices"
To hide the public's embarassing loss, and its cowardly
desperation to enrich the private sector, the Government
announced the sale on a Friday in the Christmas trading
period (14th November 2003) - ensuring minimum opportunity
for public scrutiny.
The private buyers, Bach, a consortium of property investors
led by the Commonwealth Bank, with unspecified holdings
by James Fielding Group and Toll holdings, paid a paltry
$211 million for these lands - more than $1,200 million
less than the value of the land (see below) and paying
nothing for the value of businesses already established
at Bankstown and Camden.
Why does the government give away $1.2 billion of public
assets while Australia's health and education systems
are crumbling apart ? The public is paying more and more
for less and less public service, so that the Government's
rich mates are looked after. Are there kick-backs expected
? Will we see retiring minister's joing the service of
Bach Corporation ?
At best, general aviation is allowed to continue to
enjoy playing fly-boys toys while public infrastructure
is run down.
The Federal Opposition bickered about what the $211
million would be spent on, and lamely ignored the squandering
of another $1,200 million in value. If their opposition
had been any more effective - and prepared to set a higher
bar - there'd have been six times as much to spend. There'd
have been enough spoils to keep everyone happy.
will only be spoils for retired politicians seeking employ in the
companies of the successful bidders.
Of course, the private buyers, have almost no interest
in general aviation and will waste little time in plundering
its bargain priced assets.
News Ltd papers reported
James Fielding infrastructure director
Alan O'Sullivan said the owners saw opportunities to
boost overnight parcels air freight out
and for small-scale regional passenger operations.
It was also looking at a mixture of commercial and
light industrial development.
"There's a lot of land out there that is completely
unutilised and which, on any conceivable scenario, is
just not necessary for operating an airport," Mr O'Sullivan
Is Mr Sullivan callously referring to the kind of land into
which a training aircraft ploughed on Tuesday 11th November
? Until the crash, this was an unutilised pile of dirt near
the Boeing factory - quite a way from the runway. The crash
killed the trainee and put the instructor in hospital with
burns to 90% of his body.
Would it be better to have a more heavily populated industrial
building on this site, so that a dozen or so people could
have been killed by this crash ? See
5th May 2002 crash into nearby industrial area
- which luckily occurred on a Sunday.
In an ironic twist, reports of the crash
focussed on the 8 minute reaction time for local fire
brigades to reach the airport perimeter. The on-site fire
fighting services had been withdrawn nearly 10 years before.
This is how public infrastructure is run-down, and, sadly,
in this case, the pilot and instructor have paid the price.
If the airport can't afford effective fire-fighting
services, can it really afford to be an airport ? How
much industrial development will go on in and around
the airport before we see this rectified ? Don't hold
your breath - it won't happen until after the demonstrated
cost of court proceedings exceed the cost of fire fighting.
A more intriguing question might be to ask what was
the pile of dirt doing getting in the way of an aircraft
executing a touch and go training exercise ? For safety
reasons, land within airport perimeters' is kept generally
quite flat - so as not to present undue risks to wayward
aircraft. Trainee aircraft might be reasonably expected
to be more wayward than average, and hence might need
more space. Was this pile of dirt being made to allow
property developments within the airport perimeter ?
Over the last five years, airport managers have been
busily piling up mounds of dirt on low-lying airport
lands, with yet another non-aviation business then appearing
atop the filled-in area. Has safety, and a trainee pilots
life, been thrown out the window in pursuit of a property
developers profit ?
The airport managers scant regard for anything but
developers profit shows in their practice of flood plain
filling. This will worsen flooding on upstream residential
lands - it's like building a dam on the river. It would
never be allowed if the airport had to go through normal
local and state development approval processes.
Mr Sullivan's proposal for increasing overnight parcels
services will treat locals equally callously. They could
get regional services waking them at 5 am, and they could
get more 2 am and 3 am flights waking them in the middle
of the night. There is no curfew at Bankstown, and the
smart logistics people at Toll can be expected to seize
this opportunity. It is not a harmless general aviation
daytime-operating airport any longer. It is now a profit
opportunity for Bach, and a lost opportunity for South
Western Sydney and taxpayers of the Nation.
BAL's 2003 annual report, released in Dec 2003 indicates
that BAL has been building facilities in 2003 to expand
night operations - with no environmental impact statement.
The report states "...As part of our ongoing improvements, the
Airport lighting system was upgraded to improve the circling
guidance for aircraft night operations." You don't have to improve it unless you're expecting more
aircraft to be circling the airport at night. Terrible news for local residents !
This site predicts that the general aviation community
will regret the way it has meekly stood by while this
sale process was driven through. General Aviation and
training (like those who crashed on Nov 11th) is not a
profitable urban land use, and will slowly get pushed
aside - without having secured any appropriate alternate
Highway Robbery at Airport
Bankstown Airport Limited and the Federal Government
planned to sell Bankstown, Hoxton Park and Camden Airports
at a rate that is equal to highway or rather airport
robbery. The process was designed to lock-in massive
public subsidies, and block alternative sensible uses
of Bankstown airport lands.
As reported in the Torch Newspaper, 17th Sep 2003 (see
below), all three airports are
to be sold in a package for about $150 million.
The three airports occupy 597 hectares of land (See
Figure 1 below for map of the
area), so the expected price values the land at a ridiculously
low $25 per square meter - less than 6% of its true value.
The successful bidder will be allowed to sell Hoxton
Park airport for residential development in 5 years time.
But the price being mooted doesn't even match the value
of the Hoxton Park land.
Liverpool Council estimates the developer's land acquisition
cost as $220 per sq meter for land in the Hoxton Park
area (at June 2003, see
Developers Contribution). Hoxton airport occupies
87 hectares, and hence is worth at least $220 * 87 *
100 * 100 = $191 million - some $40 million dollars
more than BAL estimate they will get for all
Current real estate listings for residential development
sites in Hoxton Park are priced at $237 per sq m (serviced
land varies between $560 and $740 per sq m). The site
is most likely to be worth $206 million or $56
million more than BAL hopes to get.
If all they can get for the 3 airports is $150 million
the public is being absolutely cheated - and getting a
bit fat zero for Bankstown and Camden airports.
Bankstown Airport (314 hectares), being much closer
to the city, is obviously worth quite a lot more than
Hoxton Park (see Selling Bankstown
for how much more).
As a lower bound to the airport's total value, the Hoxton
Park value ($236/sq m) will underestimate the three airport's
value. It gives a minimum value for Bankstown (314 ha)
of $745m, and Camden (196 ha) will be at least $465m.
So all three airports are worth over $1400 m.
A more realistic appraisal of the value of the airport
land is to use the NSW Valuer General's valuation of the
land in a nearby area. This would value Bankstown Airport
at $1400 m, Camden at $140 m, and Hoxton at $190 m - giving
a total of $1730 m.
In case you're worried about the development cost
of the land, look at Hoxton park's serviced land values.
They average around $630 per sq m (Sep 2003). Old homes
are being bought around Bankstown airport and knocked
down at prices that value the land similarly. The values
used here are much lower, and provide a good gap that
would easily fund redevelopment of the land.
So, all three airports are worth at least $1400 m to
$1700 m (and possibly more). This is more than ten times what the government is expecting to get. This is
clearly airport robbery...
"The global real estate and construction group Lend
Lease is one of the short listed possible buyers of
The estimated $150 million deal includes Hoxton Park
and Camden Airports and the purchase is expected to
be finalised in late October or early December according
to Bankstown Airport Limited's General Manager, Kim
Mr Ellis confirmed reports that Lend Lease is one
of the possible buyers, along with Toll Holdings consortium;
a consortium involving the Commonwealth Bank and specialist
property investment group James Fielding, which is headed
by former Property Council of Australia president Greg
Paramour; as well as property developer Citiwest with
Melbourne developer David Mariner making up the rest
of the short list of interested buyers"
Further evidence of the stupidity of public asset sale
to lose $93m on the Sydney land market
"The State Treasurer, Michael Egan, has referred the
sale of a prime city block of government-owned land
to the corruption watchdog after the Herald asked why
it was sold for $93 million less than its official valuation
eight years earlier.
The Government sold the land, now occupied by the
five-star InterContinental Hotel, for $37 million in
August 1999 to Lend Lease Project Finance.
The story goes on to
report the land as valued at $130 million in 1991,
at which time Egan accused the Liberal Government of
stitching up a private deal with the owner of the hotel.
The sale process was aborted as a result of Egan's expose,
but it did not stop him proceeding with a deal in 1999
that was every bit as bad.
Egan offered the defense:
"Neither the Treasurer nor any of his staff had any
direct involvement in the sale," Mr Egan said in a statement.
"The sale was conducted by public servants and their
professional advisers using an open tender. The highest
This demonstrates the clear risk of secret auctions
of public property. In view of this risk, and the involvement
of Lend Lease in both this and the proposed airport
sale, it's clear that the airport sale process should
be halted immediately.
It's remarkable that none of the short listed bidders
have any connection with aviation. They are all
If you were a general aviation enthusiast, you should
see that your days are numbered once the airport is owned
by property developers and managed as a property asset
rather than an airport asset.
The property developers can see the extraordinary value
of the deal with Hoxton Park. They can see they don't
have to offer market rates because this government's ideology
doesn't care about wasting public money. The government
has allowed Sydney Airport Corporation Ltd to cherry-pick
Sydney's aviation assets (at KSA - also at public-cheating
prices), and now they want developers to quietly hide
the burden of Bankstown's loss-making operation. The price
for the developers' silence is over $1.3
As if that's not bad enough, the airport is robbing
us of job opportunities. An industrial or commercial area
the size of these airports would provide 33,000 direct
full-time jobs - more than 10 times the airport manager's
claim is provided by the airports now. As a subsidised
employment scheme, airports are a huge waste of opportunity
and the government could do better by using the airport
land to provide subsidies to more profitable industries.
At a time when our Hospitals, Universities and Schools
are being crippled for funds, the sale is an appalling
misallocation of resources and waste of public money.
We can't even fund essential like hospitals, so why are
we putting money into airports ? The jobs
we want and need are at our hospitals and schools, not
Bankstown or any of the other airports.
While the extravagant wastage at Bankstown and Camden
gives the property developers an excuse for not offering
market rates, it doesn't mean they can't get better value
out of the airport land. The successful bidder will have
a wonderful opportunity to make a vast profit by forcing
the aviation industry away to a cheaper rural location,
and the public will have lost over $1.3 billion in value.
The only way the public will get fair value and a fair
outcome is for the present sale process to be halted immediately.
A new option is needed o allow the airport land to be
sold for residential, commercial and industrial development
- with profits being used to remedy the deterioration
that has been allowed in our hospitals and schools.
Conditions could be imposed on the airport redevelopment
so that jobs as well as houses are provided - and it would
be quite easy to ensure far more jobs were provided than
the airport can ever offer (see here).
Bankstown is Prime Terrorist Target
Bankstown airport vulnerable, say
Australia's counter-terrorism high command has identified
Bankstown Airport in western Sydney and regional airports
in NSW as the "gaping holes" in the city's security
They believe a light plane from a local
airport is more likely to be turned into a suicide bomb
than an international jet travelling from an overseas
But the Federal Government has allocated no funds
to build security fences around Bankstown or country
airports, install security screening and video cameras
or recruit guards.
Meeting last Friday, the second anniversary of the
2001 passenger jet terror attacks on New York and Washington,
the executive committee of the National Counter-Terrorism
Council reviewed airport security.
It follows two formal requests from the NSW Government
for Bankstown, Australia's busiest general aviation
airport, to be given the same top level of security
as privately-owned Sydney Airport.
However, the Federal Government regards the cost of
an upgrade for small airports as prohibitive, and the
ongoing costs would break many cash-strapped airport
If airport charges can not be raised to fund adequate
security, where is the government's committment to user
pays ? It is asking the community to subsidise the airport
by accepting the terrorism risks.
It's all too easy for aviation interests to cry poor-mouth,
and bludge more money off taxpayers - or leave it to taxpayers
to fund the consequences of terrorism arising from any
airport security breaches. That wouldn't be good enough
at Sydney International Airport, and it should not be
good enough at Bankstown.
Local residents have been alarmed at lax airport security
for years. In June 2003, airport businesses were unresponsive
to concerns at lax practices.
It really is time for them to shape up or ship out.
If airport users can't afford adequate security, they
should move-on to somewhere more appropriate - distant
enough from the CBD to give air force planes time to intercept
a highjacked plane.
Don't believe terrorism's a significant
threat to Bankstown ? Well, consider this report from
the Sydney Morning Herald,
Videos seized as man charged with planning
A young unemployed man faces a possible life sentence
for planning a terrorist act after becoming the first
person charged under the nation's new counter-terrorism
Zak Mallah, 20, appeared briefly in Bankstown Local
Court yesterday amid intense security after Federal
Police and ASIO raided his Condell Park home just
after midnight yesterday, allegedly seizing videotapes.
Mallah had been arrested earlier, at about 6pm,
during a stake out by undercover officers in Wattawa
Reserve, Condell Park. Police say he was armed.
Mr Mallah was literally arrested on the airport's doorstep.
Observing and penetrating the airports lack of defences
would be child's play for any putative terrorist. He was
also in a good position to take pot-shots at overflying
aircraft heading for KSA via Johnny Howards' punish the
labor-voters flight paths.
By late December, counter terrorism chief's concerns regarding
light aircraft attacks were shown to be spot-on:
Pilots planned to fly planes into British jet
Saudi Arabia has arrested two Islamic suicide pilots who were preparing to
fly two light aircraft into a packed British Airways (BA) jet, a British Sunday newspaper
said, quoting a senior opposition politician.
The suspected suicide pilots were arrested in the last few weeks after they were
found red-handed with aircraft loaded with explosives near Saudi Arabia's main
airport in the capital Riyadh, The Mail on Sunday said.
With the recent down-grading in Australia's airspace management rules, and two near-hits between
737's and light aircraft in a few weeks, the prospects for detecting and preventing
a light aircraft attack in Sydney are dismal. Bankstown's lax approach to security is a
forseeable and unforgiveable vulnerability.
In early August 2003, PM John "scare-em-up" Howard encouraged
airlines to fit their commercial aircraft with military
anti-missile defence systems. This was a response to allegations
that terrorists were planning attacks on civilian aircraft
with shoulder rocket launchers and/or portable ground-to-air
missiles. As the 29th Nov 2002 terrorist
attack in Kenya showed, it's no idle threat.
When Howard suggested more strongly on 5th Sept 2003
that the airlines would have to fit missile decoy defences,
and foot the bill for it, the airline's reaction was predictable
Qantas CEO Geoff Dixon immediately cried poor-mouth,
and attempted to foist the costs off onto taxpayers. Dixon
claimed airlines couldn't afford the cost, and that the
government should put defences around the airports.
Dixon claimed it would cost $692 m to fit out just their
international aircraft ( see Courier Mail, 5th Sep 2003
PM, Qantas at odds on missile decoys ).
This would put an extra $80 on the cost of international
fares, or $25 if spread across domestic and international
passengers. British Airways estimated it would cost $740
million across 300 aircraft - or roughly $2 million per
aircraft (see SBS report
TECHNOLOGY FOR BA). Qantas have just 187 aircraft
(2002 Annual Report), and on the basis of the BA estimate
should be able to fit them out for $460 million. It would
raise the ticket price by just $12 dollars - barely more
than the Ansett levy.
But of course, why not try to leech it from taxpayers
? Dixon has deliberately exaggerated the cost - in the
hope that the government will pick up the tab to install
defences around airport. Dixon's suggestion is ludicrous
- because it leaves aircraft open to attack anywhere else
along their route (including at the overseas end !).
It is also typical of the unfairness of the airlines
that they should expect the government to pick up a bill
for $460 million or more, at a time when hospitals and
education are suffering severe funding shortages. If there
is no bed in hospital for your elderly or young family
members, and no place at University, TAFE or high school,
what comfort is it to know the money had been spent on
making sure you could fly safely out of the country ?
Qantas' reluctance to spend $12 per passenger on improving
safety also says tons about how little committment they
have to passenger safety. Can you imagine how much less
concern they could have for residents around airports
? They can't even look after their customers - and obviously
have no time to consider public interests.
Government regulators should step in and mandate appropriate
action by the airlines, and bill the airlines for the
But instead, the lily-livered Howard government caved in to
Qantas and agreed to supply air marshals on Qantas aircraft at
taxpayer's expense. Worse, Qantas have the gall to charge the government
for the business class seats the air marshals will occupy (SMH,
26/12/2003). Taxpayer's will shell out $5 million per year, just for
coverage on flights to Singapore - and there's more of this to come
as Qantas negotiates deals for other routes.
If you or I hold a party for our friends, we have to pay for the security
guys. Qantas bludges from the taxpayer. Why doesn't user-pay apply to
Qantas ? Why does the government allow them to profiteer from provision
of security guards, instead of legislating to force Qantas
to provide better physical security on their aircraft ?
Making people stand in line for hours while low paid and ill-trained inspectors paw through
their luggage is hardly effective security. Relying on air marshals randomly assigned to
a fraction of flights to be present, and then able to resist the
temptation of nodding off in comfortable business class seats is no more effective.
If terrorism is a significant threat, it should be met by protection on every
This better security should be the two-door "flight deck security passage to be found on El Al , the Israeli national airline.
If you do manage to penetrate the outside door into the cockpit, you will never
have the opportunity to penetrate the inside door, since you will be dead.
The system, once armed, is automatic and highly effective."
The Airport Experience
This would need to be coupled with a missile defence system, that could
intercept both incoming missile threats, and a light-aircraft attack threat.
Deregulated Airport Profits
The dream of deregulated airports delivering bucketfulls
of economic efficiency is fast evaporating. Speaking at
the Australian National Aviation Press Club (6th Aug 2003),
Giovanni Bisignani, CEO of the International
Air Travel Associated
(peak body representing 270 airlines
carrying 98% of scheduled air traffic worldwide), highlighted
the huge profits made by airports:
Recently Deutsch Bank compared airline
operating margins to those of airports. Most airports
showed 4 year average operating margins over 20%. Airlines
were all under 10% and many were negative.
I am not saying that airports should make less profit..
we need healthy and profitable partners.
IATA also weighed into the debate over privatisation of
Hong Kong's International (Chep Lap Kok) airport:
"Privatization is far too important to be viewed as
a quick fix to the Government's current budgetary difficulties.
Long-term vision is needed," said Bisignani.
"Privatization must not give a private monopoly a licence
to print money at the expense of the greater Hong Kong
economy. Economic regulation is required to maintain
a balanced bargaining position for the airport's users
and guarantee the airport's role as a catalyst for overall
economic development. Airline involvement in the privatization
process will be key to ensuring that all of Hong Kong
benefits from an efficient privatized airport,"
Unfortunately, in almost every instance in Australia,
privatisation has been a short sighted quick-fix for government
IATA's remedy of involving airlines, however, does not
provide long-term vision nor effective regulation. Airlines
would be happy to make the 20% profit margins enjoyed
recently by airports. Effective economic regulation requires
transparency and input from the public at large, and this
has not happened with Australia's airport deregulation.
For Bankstown Airport's proposed privatisation there has
been no public consultation, and no transparent involvement
of the airline industry.
It should also be noted that the 20% airport operating
margins cited by IATA are not being achieved at the General
Aviation (GA) airports like Bankstown presently is. Elsewhere
in the world, some of the extraordinary profits may have
been contributing to the cost of GA airports but such
is not the case now in Australia. The taxpayer alone picks
up the costs of dismal economics at Australian GA airports,
while the private buyers of the major domestic and international
airport take home their lovely profits.
Sydney Airport Master
Plan and Very Large Aircraft
On 1st August 2003,Sydney Airport Corporation Limited (SACL)
Sydney Airport Preliminary Draft Master Plan for public
The plan proposes that no second airport is necessary,
on the basis that KSA will expand from today's 22 million
passenger movements per annum to handle 68.3 mpm in 2024.
It uses IATA forecasts that passenger numbers will grow
at 4.2% but that use of larger aircraft will require only
a 2.4% growth rate for aircraft movements.
Approval of the plan by the Minister for
Transport was announced on 8th April 2004
The Australian). At the same time,
Sydney Airports announced it would call tenders for "
a $100 million upgrade of existing infrastructure facilities
to ensure the new A380 can touch down at Sydney Airport". There
was no mention of the EIS required by the
Airports Act (section 89)
for works that "extends taxiways" and/or any "development that
is likely to have significant environmental or ecological impact;"
Will larger aircraft solve all the problems ? Significantly,
no airport presently operates 68.3 million passengers
on a 3 runway configuration like KSA - and nobody plans
to either. Bigger aircraft don't just automatically increase
airport passenger throughput because larger aircraft require
greater separation on approach and departure to avoid
dangers from wake vortexes.
Wake vortex's are the small tornado's that form on the outermost
end of the wing where wind rushing over the top spills and collides
with the wind being pushed below the wing to support the
aircraft weight. The strength of these vortices increases with
aircraft weight and can lift tiles of houses below landing
and take off approaches.
Wake Vortex's can last for several minutes and stretch
for many kilometers behind an aircraft.
When a following aircraft encounters such disturbed airflow,
the plane can accelerate uncontrollably, flip over and
The Boeing 747-400 has
winglets (the vertical sail at the end of the wing) to
control its vortexes. Although the wing geometry and aircraft speeds are
the same on the earlier 747 models (200 etc.,.), the heavier weight
of the 747-400 increases vortex's and requires control with winglets.
There are also issues with
maneouvering and docking large aircraft once they are
on the ground, (see the concerns well put by pilots at
Comparison of A380 with 747-400
Comparison of A380-800 with
Outline of A380-800 (red)
has been superimposed on scale drawing of 747-400 (yellow filled).
All labelled dimensions are for the 747-400. The future A380-900 stretched
version will be 4.7 m longer, same wing-span and area.
The Airbus A380, not due to fly until 2006, is touted as an example of
the new very large aircraft. But the A380-800 takes only 32% more passengers
than the 747-400 that previous airport planning was based on.
Do the math. You can't triple your airport's capacity with aircraft that are only 32% bigger.
But with 42% more weight to lift, 66% more wing area, and 12% more thrust, the A380
will certainly stir up some tornados below it as it takes off and lands. It has to
be doubted that improvements in wing vortex control will match the increase in size of
this aircraft (the winglets on the 747-400 are provided to reduce wing vortex, and the A380
doesn't seem to have anything new in this regard).
As of mid August 2003, getting a taxi from KSA at evening
peak (circa 5:30 pm) can add a 45 minute wait to your
travel time - can you imagine what it will be like with the proposed
tripling of the passenger numbers ? Tripling passenger numbers
will require tripling of the roads and railways into the
airport. Can you imagine a triple-decker M5 motorway ?
It is ludicrous.
SACL are planning that break-through research will allow
new Very Large Aircraft like the Airbus A380 Superjumbo
or later A3XX-100 models to need no greater separation
than todays' aircraft. This aircraft, rather like a double-decker
747 (or A340), hasn't even flown yet. Wake vortex basically
increases in proportion to aircraft weight, and
the speculation that research will find ways to mitigate
it on new aircraft has to be doubted and will do nothing
for the existing fleet that will remain in service over
the next 20 years (there are many 30 year old 747's still
flying out there !).
SACL is conveniently siding with those who believe
"the answer lies in fewer, bigger planes like the
Airbus A3XX-100 a 540- to 960-seat double-deck super
jumbo that will fit within the 80m per-plane square
required by airport infrastructure. But precisely the
same thing was said of the original jumbo and look what
Airports had to be expanded to cope with 747's in spite
of designers plans. KSA's main runway had to be extended
into Botany Bay to cater for 747 traffic. Where will they
go when the A3XX's fail to deliver on the promises ? Airbus
still hasn't got the 540 seat A380-800 into the air, so SACL's
talk of the 900 seat version is purely deceitful speculation. Airbus Industrie's
full development plan for the A380 is only aimed at a 656 seat A380-900, a
streched (lengthwise) version of the A380-800; it has only 56% more seats than
On Dec 9th, 2003, the operator of Frankfurt
Airport admitted that the A380 would increase noise, and
will not be quieter than the 747s (see http://www.bund-hessen.de/presse/start.html
All the references to making the A380 quieter are talking
about improving the aerodynamics of the wing so that
less wake vortex occurs. But puttering around on the
ground at < 120 km/hr is unlikely to benefit from
any such improvement; and when you've probably got to
push 50% more tons around than a 747 (around 550 to
580 tons cf 400 tons MTOW for 747-400), the engines
will get revved up more to get moving at taxiing speed.
Oh, yeah, and think about the extra tons of fuel and
pollutants this will pump out.
Next think about how it performs at maximum thrust
down the runway and for the initial climb-out from the
airport. Wake-vortex's improvements won't make much
difference to the extra noise needed to thrust 50% more
weight into the air. There is going to be heaps more
pollution and noise generated.
Airbus proponents will argue the engines are more efficient.
Airbus claim that it is 13% more efficient on a fuel
use per passenger seat. This figure is based on averaging
out things over a long high-altitude cruise period where
the engines are throttled back and the higher engine
efficiency is likely to kick-in. Even if it applied
at maximum thrust, there's still a big deficit between
the claimed 13% efficiency and the 50% extra weight
that has to be moved. If you replaced every 747 with
an A380, you'll end up with vastly more pollution (at
least 37% = 50% - 13%).
Even when descending to land, the big A380 has 50%
more weight to control. And 66% more wing area generating
tornado's in the wake. Controlling descent on landing is achieved by
adjusting the aircraft trim, and using occassional thrust
corrections (particularly if flying dirty) both of which
require energy that comes from the aircraft engines
and/or auxiliary turbines. The A380 will use lots more
fuel to control its higher weight and wing area.
If KSA is expanded by replacing 747's with A380's,
and upscaling the feeder services (737's become 767's,
767's become 747s etc.,.) the threat to nearby residents
is huge. These larger feeder aircraft will bring with
them much greater noise and pollution and wake vortices.
It seems it's not going to be nice for anyone living
within (say) 10 km's of KSA.
After aircraft are docked, the logistics of moving vast
numbers of passengers out of the airport precincts have
to be addressed.
The independence and motives of SACL have to be seriously
questioned. As holder of monopoly rights for Sydney Airport,
SACL stands to profit handsomely from failing to make
adequate airport capacity plans (simply raising charges
by up to $318 per trip to reduce
demand - see the estimated Consumer
Surplus of $318 ). They can not be expected to advocate
a second airport.
Its amazing how easily little John Howard and his mate
Max The Axe are getting away with protecting their airport
monopoly ! Short-sighted Johnny Howard would not support
Very Fast Trains, because they were too new (not proven
Sydney would probably never need a second airport,
the Prime Minister said yesterday, sparking accusations
he was doing the bidding of his former adviser, who
now heads the Sydney Airport Corporation...
Mr Howard said technological changes and larger aircraft
would probably mean the city could survive with Sydney
"There's a very strong probability, in my opinion,
that Sydney will never need a second airport," he told
Channel Nine. "All the advice coming to the Government
is that the current airport can handle the traffic out
to about 2020."
Why does Howard buy these far-sighted prospects that planes
that haven't even flown yet will meet Sydney's future transport
needs ? At least MagLev and other fast trains actually run
already in other parts of the world, and they produce less
than one tenth the greenhouse gas of jet aircraft. The A380
hasn't made it out the factory door yet - let alone proven
its capabilities with regard to wake vortex and handling
on the ground. Why can technological change be anticipated
when planning airports, but not embraced when planning alternative
transport solutions ?
Its very clear that Mr Howard can not separate the interests
of Sydney residents from the economic interests of his
mates at SACL. Does he expect an even grander reward than
that won by Max Moore-Wilton who retired as head of Howard's
PM department to become CEO at Sydney Airport ?
Perversely, Howard's ploy might produce the right environmental
results for the wrong reason. Less airport capacity will
mean fewer aircraft in the skies over Sydney. That's an
excellent result, but the risk is that Howard is really
planning to expand Bankstown airport to fill the gap.
That would be a disastrous outcome.
The government needs to wake up to the unsustainability
of airports and never-ending airport expansion. Caps should
be placed on KSA to prevent abuse of the inner-city communities
and force airlines to demand manage. Restrictions should
be placed on Bankstown Airport development to prevent
its expansion to an unacceptable regional or larger airport
Or better still they should be freed from the restricted
airport-only use and allowed to be sold on the open market
for the most appropriate efficient economic use.
Labor Abandons Badgery's
July 27th, 2003: Federal
Opposition Leader Simon Crean announced a new ALP policy that abandoned
Labor support for a second airport at Badgery's Creek,
opposed the sale of the remaining Sydney Airports, and
opposed operation of large jets at Bankstown.
The new policy created a furore amongst inner city ALP
members, who complained of lack of consultation. The policy
provides no position on the site for an alternative airport,
and hence naturally worries those affected by the existing
It is also vague about the definition of large jets.
Is a BAe 146 a large jet ? What about a 737 ? Maybe it
only means 767's and 747's ?
This policy change hasn't really changed much - as the
Federal government had effectively abandoned the Badgery's
Creek option in December
2000. Opposition to the sale of the remaining airports
is really a case of too little too late, and will do nothing
to prevent the sale. And lastly, any policy that fails
to provide criteria for an alternative site is vacuous.
In effect, Crean and Ferguson have decided
that Sydney's future airport growth should be at Mascot:
on merits, the least suitable site. As in 1989, Labor's
leaders have sold out the welfare of people in safe Labor
seats around Sydney Airport to help them win (or hold
on to) marginal seats further west. Better to harm a million
voters who can't hurt you than 100,000 who can...
Why did this mess develop? Because each time the decision
has come before cabinet, it has chosen a false economy.
Governments have opted for the cheapest short-term solution
and redeveloped Mascot rather than choosing the best long-term
solution. And with each deferral, building Badgerys Creek
has become harder, until both sides see it as politically
impossible. This is no way to plan our infrastructure. Governments need to think
long term, and act long term.
The people in the very safe electorates around Bankstown
airport can take little comfort from a party that abandons
its faithful supporters so readily. Until an alternate airport
site is developed, and vague notions like large jets resolved,
Bankstown has plenty to be concerned about.
If you don't feel sympathetic with Bankstown and Sydney
Airport affected communities, think about how you would
react if the government turned your quiet suburban 2-lane
street into a 6-lane motorway. Worse has happened at Sydney
Airport where a dirt-track 1930's airfield with it's aircraft
smaller than a modern-day 4WD off-roader, has now become
a massively larger 3 runway monster with aircraft the
length of football fields.
April 9th, 2003: Australia's
Minister for Finance, Nick Minchin, and the Minister for
Regional Services Wilson Tuckey issued this joint statement:
The Commonwealth Government today announced the strategy
for the sale of Bankstown, Camden and Hoxton Park Airports,
known as the Sydney Basin Airports.
The Government announced its decision to sell the airports
by way of a 100% trade sale in March 2001.
No changes to the operation of Bankstown or Camden
airports are required or are being proposed as part
of the sale, and therefore the sale is not expected
to impact on the local communities.
"Changes to the aviation environment since 11 September
2001, the collapse of Ansett and the trend to using
larger aircraft, particularly on regional routes, means
there is no longer a need for Bankstown Airport to develop
an overflow capacity to supplement Sydney Airport,"
Mr Tuckey said.
"The sale will go ahead without development obligations
on any of the three airports."
Senator Minchin said that in line with Government policy
on asset sales, the proceeds of the sale would be used
to reduce Commonwealth net debt.
"This is the last in a series of successful airport
sales which, to date, have generated approximately $8.3
billion in net sale proceeds and led to significant
investment and improved facilities at Australia's airports,"
Senator Minchin said.
"The sale will be managed by the Department of Finance
and Administration in consultation with the Department
of Transport and Regional Services and other relevant
"A range of specialist advisers including Caliburn
Partnership, Australian Government Solicitor and Gavin
Anderson & Company will assist in the implementation
of the sale."
Key components of the strategy include:
- The Government's preference for all three airports
to be packaged together for sale as a group;
- Consistent with previous airport sales, the Commonwealth's
shareholdings in Bankstown Airport Limited and Camden
Airport Limited will be sold with their existing lease
terms which have about 45 years to run with an option
to renew for a further 49 years;
- Hoxton Park Airport Limited will be sold with a
shortened airport lease of five years with the land
then converting to freehold title. (The five year airport lease can
be extended a further two years upon agreement between
the Commonwealth and the new owner);
- No specific development obligations will be imposed
on the new airport owner to upgrade Bankstown Airport;
- No specific development obligations will be required
at Camden Airport or Hoxton Park Airport.
"At the end of the shortened lease for Hoxton Park,
freehold title will transfer to the owner of the lease
and it will be up to the new owner to determine the
best use for the site, consistent with relevant state
and local government planning laws," Mr Tuckey said.
The sale is expected to be completed by the end of
Carefully note this press release ignores the outbreak
of SARS in Hong Kong, Singapore and Canada in March 2003
- which subsequently reduced passenger traffic at Sydney
Airport by 15%. Airports have become even less necessary
It's good news that the new owner of Bankstown is not
required to develop it as an overflow airport. But that
doesn't prove it's out of the government's mind. And it's
quite bad news that a 45 year lease for Bankstown is to
be locked-in by a private company contract.
Slightly better news is the small breath of sanity in
the proposal to convert Hoxton Park airport to freehold
title after a five-year lease.
Why not convert all airport lands to freehold title,
right now, and let market forces determine their best
For too long now, wealthy airport users have not paid
the true cost of their inefficient land use and have been
cross-subsidised by the community in both monetary terms
and in terms of the environment damage they bring. It's
time to get them off the public teat.
Don't be reassured by the Minister's rhetoric that the
community should not be concerned by the sale because
no change in operation is proposed. This is a thoroughly
misleading carelessness with the truth: the proposed closure
of Hoxton Park would significantly increase traffic at
Bankstown (as the Schofields airport closure did).
Further, nothing about the sale will prevent the new
owner from developing a radically different plan of operation.
And, in fact, the sale documents will remain a government
secret making it impossible for the community to see through
this government's corrupt sale-at-any-price agenda. IATA's
Aug 6th 2003 concerns with inefficient private monopoly airports is well-founded
RPT will Close Circuit Training
Aviation enthusiasts claim that a private airline is
developing a plan for operating regular RPT's out of Bankstown
(maybe Bankstown to Canberra), possibly using BAE-146's
(the aircraft with nauseating exhaust leaks into the cabin).
The catch is that these would require radar separation,
and would track into Bankstown causing wake turbulence
that would play merry hell with circuit training. But
circuit training and private aircraft generate almost
no revenue, and the airport private owner will waste no
time moving them on to cheaper pasture. Bankstown real-estate
is too valuable to waste on Not-for-profit business, as
the Historical Aircraft Restoration Society found when
looking for a home for Connie and their other restored
aircraft. Circuit training will have to move aside for
more profitable business.
Perversely, while civilized places like Hong Kong have
moved airfields out of their densely populated areas (from
Kowloon to Chep La KOK, 45 km out of town), so that RPT's
don't fly down looking into people's lounge rooms, Bankstown
managers are doing the opposite and proposing to bring
RPT's into densely populated areas - flying down next
to Bankstown Hospital and looking into the homes on Black
Logically, for the same profit-motivated reasons circuit
training has to move out, all forms of aircraft operation
at Bankstown should also move aside for a far more profitable
use as redeveloped real-estate.
In January 2003, AirServices Australia produced
CAPABILITY OF BANKSTOWN AIRPORT TO HANDLE REGULAR PUBLIC TRANSPORT (RPT) SERVICES"
which considered the capacity of Bankstown Airport to handle aircraft up to the
size of the 56 tonne 737-300. On the basis of current technological limits, it advised that
up to 12 movements per hour could be supported. That's one 737 every 5 minutes.
The limit arose from CASA advice
that straight-in approaches are required for safety reasons. Technological improvements such
as the ability to use curved approaches may increase the limit vastly in the next few years.
If you live in Kurnell, Cronulla, Como, Blakehurst, Oatley, Riverwood, Punchbowl,
Chullora and Strathfield, or in areas to the airport's west, like Chipping Norton, Casula,
and Liverpool, you should take a look at the prospective flight paths in
this report. You could cop huge increases in aircraft noise - on top of whatever share KSA
already brings you.
MOMBASA, Friday, November 29th,
2002: Suicide bombers blew up a hotel full of
Israelis in Kenya overnight, killing 14 people, minutes
after missiles narrowly missed an Israeli airliner taking
off nearby, in an apparently synchronised attack. Israeli
and Kenyan officials swiftly blamed the al Qaeda network
BALI, Saturday, October 12th,
2002: A car bomb which exploded outside the Sari
Club ( preceded by an explosion in Paddy's Bar) killed
at least 82 Australians, from a confirmed death toll
of 180 which included dozens of tourists from Britain,
Europe and the US. Indonesian police later arrested
suspects who've admitted links to the Jemaah Islamiah
and Al Qaeda Islamic terrorist organisations
All of a sudden international tourism doesn't look
such a flash idea (and we haven't mentioned SARS which
slashed international travel by 15% overall and 45%
to Asia in Feb to Jun 2003). The Kenyan missile attack
shows the clear risk presented to the public by airports.
With the threat of terrorist attacks, all airports
should be as far away from highrise buildings as possible
and out of cities altogether. This will increase the
safety to the community. Bankstown airport, set in the
heartland of Sydney's muslim population, would be a
terrorist's dream - if they wanted to attack Sydney's
highrise buildings, nuclear reactors, or other international
and domestic aircraft or the city's infrastructure.
How can PM Howard claim to protect the Australian people
when he supports actions which could increase the danger
to Australians ? Major airports out of large city areas
would place Australians less at risk.
Airport security at Bankstown Airport is a complete
joke. It's perimeter adjoins many residential and commercial
properties, and would be virtually indefensible against
terrorist penetration. If there ever was a time when
operating airports within metropolitan residential areas
was acceptable, it is now long gone. Immediately after
Sep 11th, then after the Bali Bombing and now even in
June 2003, residents have found lax security at the
As reported in the Torch Newspaper's front page article
11th June, 2003, (see left) security gates are routinely
left open at Bankstown and hijacking a plane would be
child's play. One company responsible for this was unrepentant
about it - claiming it would deter customers if they
had to unlock and lock the gate after every customer.
Guess which guys will have to take themselves elsewhere
when the private operator does his sums with the RPT
Aviation's Environmental Impact
The aviation industry consistently denies that aircraft
have significant environmental impact - particularly away
from airports. Thanks to the September 11th bombing of
the WTC, there is now clear evidence to the contrary.
After the WTC collapse, all aircraft across the USA were
grounded for 3 days.
Vapour Trails over the North York Moors (UK)
Dave Lawrence Photography
The nitrogen dioxide making those seemingly pretty
jet trails high in the atmosphere are compounding
the greenhouse effect by trapping infra-red radiation
Australian environmental researchers Michael L Roderick
and Prof Graham Farqauhar studied data from this period
and found the suddenly clear skies provided an explanation
for why evaporation from backyard pools dams (and pans)
had declined over the last 50 years in spite of global
warming. The study outcomes were reported in Science
journal ("The Cause of Decreased
Pan Evaporation over the Past 50 Years", Michael L. Roderick
and Graham D. Farquhar, Science 2002 November 15; 298:
With something like 10,000 aircraft no longer in the
sky, Roderick found that the skies were measurably clearer.
High-flying jets had long been suspected of affecting
climate because their contrails, or water vapour exhaust
trails, can turn into cirrus-like clouds, which can act
as insulators, reflecting the heat of the sun, as well
as trapping heat below.
A US team confirmed this effect earlier this year. During
the three days of clear skies in September the difference
between the average day-time maximum temperature and night-time
minimum across the US was more than one degree greater
than when contrails were present.
For more on aviation's environmental impact, see the
UK Government Royal Commission on Environmental Pollution
(RCEP) report “The
Environmental Effects of Civil Aircraft in Flight”,
which essentially damns its Government’s aviation growth
policies while drawing attention to the sector’s major
June 10th, 2002:The
Sydney Morning Herald reported the progress of Bankstown
Airport sale claiming "the Government is soon to launch
a study on the best way to sell the asset, which will
also canvass the likely sale price".
The Herald estimated the government would be lucky
to get $100 million for Bankstown. A Herald article
on 10th June 2003 again repeated this $100 million optimistic
estimate. Coolangatta Airport, on Queensland's Gold
Coast and a premier tourist destination with a large
number of regular large domestic passenger jet services
(737's etc.,.) fetched less than $100 million when sold.
Even if Bankstown matched this, that would value the
airport land (314 ha, as per the FAC Annual Report 1997)
at approximately $32 per square meter.
There are alternate uses that would value it more highly
than this. The best possible evidence for this is the
simple fact that the Airports Act has to prevent the
airports use for alternate purposes. No such regulation
would be needed if the income and jobs provided by an
airport matched the normal expectations for industrial
or commercial land. The airport would simply compete
for land like any other business or residential user.
This can be backed up by quantitative analysis: for
2002, the NSW Valuer General's Land
Valuations conservative valuation of residential
land in Bankstown was over THIRTEEN
times the SMH estimate of the airport value - $417 per
square meter (or $288,000 for the average residential
block - a quite conservative estimate, land near the
airport is selling for much more than this). Even as
a small industrial site, the value would exceed $246
per square meter, and as large industrial it would exceed
$165 per square meter. Either of these last two options
would produce far more jobs
than the airport (at least 5 times as many).
So here is a marvellous profit opportunity for a real-estate
developer: buy the airport, stir up the locals, and
convince the government it should be closed down. You
could ship-out the flying schools and unprofitable operators
while pretending to need the airspace for valuable RPT
services. After a few years, you could let the RPT service
go belly-up and claim the airport is now no use. It
might take you a few years to achieve, but with a few
hundred million to gain - it could be worth the wait.
Could even be worth staging an accident or two with
well-insured aircraft just to hurry the process along.
There could even be change left over to fund a fake
RPT service to displace the unprofitable GA businesses.Which
one of the government's mates is in on the plan ?
If you don't think the government would be so stupid
as to sell the airport cheaply, take a look at the
Auditor General's report on the IT out-sourcing and
sale of government buildings in Canberra (search for
Audit Report No.4 2001/2002 Commonwealth Estate Property Sales, August 2001).
This government is committed to sales even if it results
in greater costs to the community. The Finance department
which conducts the sales simply reports "that it was
not charged with the role of protecting the overall
interest of the Commonwealth". So they can proceed
with the sales on quite uneconomic terms, and without
evaluation of alternative options.
The Auditor General found there had not been a proper
inquiry making comparisons of costs and benefits of
alternative options, as required under Financial Management
and Accountability Regulations (FMA Regs) and the
Commonwealth Procurement Guidelines (Guidelines).
He also found that the sale and leaseback arrangements
produced a negative return (NPV) within the terms
of the leaseback periods, and that rents were substantially
(12%, 17% and 38%) above market valuations.
As grubby an opportunity
for corruption as could ever be hoped for by a greedy
politician or bureaucrat ! It is little surprise
that the Auditor General was not happy with the spending
on consultants used in the sale processes. Not that
this adverse reports are any concern or impediment
to the present governmnet.
Lest you wonder about the enormous economic benefit
of the airport, Bankstown Airport
Limited's 2002 Annual Report indicates that its
aeronautical revenue was just 9% of its total, and it
made a meagre EBIT (Earnings Before Interest and Tax)
of $4.2 million (or $2.8 m after tax). Some 87% of its
revenue was from property (2001 Annual report was very
similar, although EBIT has improved from $2.6 m). This
company is in the property
business, and the best use of its substantial property
assets is not as any kind of airport. Based on the airport's earnings,
you'd be a very wreckless investor to bid $100 million
for it (implying you are happy with a return of barely
3 or 4% on your money).
As verification of the June 2002 Herald report, BAL's
2001 annual report indicated that a sale of the airport
was planned for the second half of 2002, and it also
bragged about reducing the value of the contract with
the Airport Environment Officer.
Can't have him finding too much that might inhibit the
sale process or impact on prices.
Well over a year later, it's still
not sold. There's clearly not much interest from buyers.
Maybe it's worth nothing
as an airport, and it will be sold at ridiculously low
prices to prop up the aviation sector.
The Government wants to deregulate everything about
the airport, except it's privileged position to waste
economic resources (land etc.,.) - just to fatten up
(subsidise) airline profits.
There is a more sensible economic option. In contrast
to the value expected to be gained from Bankstown, semi-rural
land at Cecil Park (some 8 km closer to town than Badgery's
creek site) is worth less than $29 per square meter (VG
2001 & 2002). The 1700 ha Badgery's Creek site was
acquired for $150 m in 1986 and 1991, and valued at $255
million in 1997 (according to EIS). Even allowing 3% inflation,
that's less than $17 per square meter. It is way, way,
less than the expected valuation at Bankstown. Sites OUTSIDE
the Sydney basin would come in even cheaper. Doesn't this
tell you heaps about where the airport ought to be, if
it's going to pay its way ?
BEAR challenges the Federal Government and aviators to
show some courage in its conviction with the free-enterprise
forces of competition economic model it embraces religiously
in most policy areas. Abide by the Financial Management
and Accountability Regulations and offer the market alternative
options in the sale process.
Let there be a completly free auction for Bankstown Airport's
lands, with no cross-subsidies or special favours for
parties interested in preserving the airports subsidised
and privileged status. Deregulate it and free it from
the encumbrances and protection of the airports acts.
If you can't be so brave, perhaps leave just one condition
- that a successful bidder have a plan that provides at
least as many jobs as the airport. Let the aviation industry
bid for its land like any other investor, as the economist's
belief in allocative efficiency demands. And in the interests
of honest and transparent bidding, let's have an open
bid second-price (Vickrey) auction.
For comparative purposes, KSA
covers 881 acres. Using a conservative estimate from
the nearest suburb in the Valuer
General's list, year 2001 land values in airport
polluted Marrickville, KSA is worth 881 ha * 100 * 100
(sq m/ha) * $622 per sq m = $5.4 billion as residential
land. Any real estate developer worth his salt would
get quite a premium on this once the airport is gone
(bayside properties, could fetch double the Marrickville
rate). It should well and truly account for the cost
of building residential infrastructure, and deducting
space for roads, parks etc.,. As small industrial land,
KSA would fetch over $3.5 billion, and become home to
48,000 direct jobs (way more than the airport).
KSA Sold Cheaply
On 25th June 2002, Minister
for Finance Nick Minchin announced that KSA had been
sold for $5.6 billion in a trade sale (meaning a first-price
sealed-bid competitive tender). That values the land
at only $636 per square meter, if you assume everything
else on it is worthless. It does not account for nearly
$2 billion in infrastructure spent prior to the Olympics
(see Sydney's Airport media release
Olympic Airport Infrastructure ), nor any of the
pre-existing infrastructure (KSA's assets were valued
at a further $2.9 billion by ACCC in 1999). Reports
that the second-bidder offered $500 million less only
prove that competitive sealed-bid auctions of public
assets are a stupid way to get less than true value
See Bob Mark's
Australian Graduate School of
Management lecture on Strategic Game TheoryTenders, Auctions
and Bidding in Competition
or search for "Auction
Theory" if you want to understand the flaws in such
auctions, and why second-price auctions would deliver
sale has fleeced taxpayers and jobseekers big time.
Clearly, if the government tooks its hands off the levers
and let a competitive market decide the best use of
land, KSA would be gone in no time.
Unfortunately, it seems that the successful bidder,
Southern Cross consortium (SC), has now first right
of refusal on construction of a Second Airport. SC might
even have veto rights to prevent a competitor entering
the market. SC has been reported as stating this right
won't be exercised before 2020. Why build another one
if you can extract extortionate fees from a KSA monopoly
? Massive subsidies and monopoly
profits have been locked in for decades
Don't hold your breath waiting for SC to demolish the
airport ! Macquarie Bank, a member of the SC consortium,
was reported as having earned a cool $50 million in
fees for negotiating the deal (SMH, Saturday 29th June).
Not surprisingly, there was a strong reaction over these
extraordinary fees. Macquarie attempted to defend them
by pointing out (SMH 6/7/02) that their team of between
20 to 40 people worked over two years on the deal. Even
if you suppose it averaged out at 50 man years work,
that's a million dollars per man-year. This led analyst's
(David Koch, Sunday Sunrise 7/7/02) to point out how
exhorbitant Macquarie's management fees were for other
infrastructure assets; as an example the Westfield trust
(managers of shopping malls) handled assets of nearly
triple the value of Macquarie's, but for fees that were
less then two-thirds of Macquarie's.
Macquarie Bank's 2001 Annual report indicated that
employee expenses were $816 m for its 1,965 employees
- an average of $415,000 per employee, or roughly enough
to pay 4 public servants or average wage-earners to
sip tea while the fifth one of them does the work.While
economist eulogize about the invisible hand of the market,
sharemarket punters may need to be wary about sleight-of-hand,
and remuneration packages that are clearly excessive.
SC may plan to take advantage of taxation dodges applying
to infrastructure that will see them gear up their investment
with monstrous debt levels. This will ensure they never
appear to make a profit nor pay any tax. Such appearances will
help them cry poor-mouth whenever they seek to raise
prices at the airport or excuse environmental pillaging,
as most members of the public won't see through it.
Behind the scenes, the banks on the receiving end of
the debt interest payments and exorbitant management
fees will do nicely, and to the extent that a major
SC partner is a foreign investor, may escape any contribution
to Australian taxes. Not too many domestic real-estate
developers have that opportunity.
Of course, whatever the sale plans are for Bankstown,
don't expect them to be announced to the public, as the
decision on KSA's new Parallel Runway (PRM) radar shows.
On 15th May, 2002, hiding behind the Budget news, the
Federal Government issued a news release indicating it
had now approved full implementation of the PRM radar
system at Kingsford Smith Airport.
This was just the lastest show of contempt for the public
and Sydney's environment in the sorry saga of developing
a responsible plan for Sydney's aviation needs. It's another
step in deciding to wrecklessly expand Sydney's urban
airports and ignore the danger to Sydney's residents.
To highlight the airport dangers, around 3:25 pm on Sunday 5th May 2002, a family of four died instantly when their
light Piper Cherokee Warrior PA28-161 aircraft collided
with a Socata Tobago TB10 trainer aircraft on the approach
to Bankstown Airport (see ATSB preliminary report for
More details of the collision, earlier near misses, and
their implications are discussed here
BAL will do nothing to stop a repetition, and everything
it can to increase traffic volumes and aircraft sizes
to maximise the danger to nearby residents and workers.
New era small GA jets like the Eclipse 500, with
crusing speeds of 658 km/hr, could pose even graver crash
dangers to Bankstown residents in coming years.