Airport makeovers - all talk?

An attack of commonsense appears to have broken out at Australia’s two main airports, with both Melbourne and Sydney preparing themselves for major makeovers.

There was a loud exhaling of “about bloody time!” when Sydney last week announced a re-organisation of its terminal system that will end the marooning of its international operations hundreds of metres away from the domestic passenger terminals.

International operations will take place alongside domestic operations, with the current international terminal handling non-aligned airlines and those aligned with Virgin Australia; and the current T1 and T2 handling Qantas-aligned operations.

A few days later, the announcement of a makeover at Melbourne’s Tullamarine appeared to make just as much sense: a new T4 terminal replacing the temporary-looking “shed” that Tiger Airways uses on the south side of the terminal complex; and a reconstruction of the overtaxed entry and exit to the airport from and to the Tullamarine Freeway.

Then you read the fine print: The Sydney reorganisation is little more than an idea that has yet to be approved by airline users and wouldn’t go ahead before 2019; and the Melbourne redevelopment doesn’t yet have the approval of the major affected tenant, Tiger Airways, even though the projected opening date of the new T4 is mid-2014.

Apart from the government planning bodies that will have to approve both projects, the biggest stumbling block could well be the Australian Competition and Consumer Commission. New ACCC chairman Rod Sims has indicated he will be pushing for tighter regulation of Australia’s private airport monopolies, which have been given free rein by successive governments to charge what they like for services, free of price controls which were removed in 2002.

When it comes to building new terminals, airports – around the world, not just here – tend to suffer from the “palace syndrome”: it’ll be just splendiferous (and you’ll pay for it whether you want it or not). But airlines like Tiger and Jetstar are especially touchy about having to pay for infrastructure they don’t want.

Jetstar, for example, has a very uneasy relationship with Darwin airport – possibly the most expensive privatised airport on the planet, even pricier than Sydney. When Darwin proposed a lavish new terminal development two years ago, Jetstar refused point blank to pay for it and it did not go ahead.

Airport costs are even more important to Tiger Airways, which styles itself as an “ultra-low-cost” airline. If Tulla’s new T4 turned out to be an expensive palace, it would be tempted to re-activate its no-cost deal at Avalon, 55 kilometres away, which was designed specifically for low-cost airlines.

Melbourne airport chief executive Chris Woodruff says negotiations with airlines about the new $300 million terminal, which would house Tiger and Jetstar, will begin next year.

Tiger is non-committal: “Tiger Airways continues to have ongoing dialogue with Melbourne Airport in relation to Tiger’s immediate and future growth plans,” spokeswoman Vanessa Regan told me this morning. “Tiger Airways has ongoing positive dialogue with Melbourne Airport and has had every assurance that the outcomes of the Melbourne Airport redevelopment project will be supportive of Tiger Airways Australia’s future requirements.”

While the airlines were initially publicly supportive of Sydney’s terminal reorganisation, the airlines are yet to be consulted and it will ultimately come down to cost. Privately, the airlines are scathing of Sydney’s alleged price-gouging for everything from phone lines to check-in desks.

It’s no wonder when, in round figures, Sydney costs just $100 million a year to run and turns out around $900 million a year in operating profit.

Both Sydney and Melbourne also make big dollars on their car-parking, which will become a key consideration for the ACCC when it examines their proposed new entry and exit traffic plans.

Melbourne in particular is chaotic at certain times of the day because its overloaded two-lane departures ramp can’t handle the traffic. If it’s judged its new development perpetuates that chaos to force people into the car parks, I expect the ACCC will have plenty to say.

I hope, however, both projects turn out to be as good as they look on paper. Now, if we could just fix that bloody Sydney airport train and put one into Tulla...

Do either or both of these projects seem to you to be heading in the right direction? What changes would you like to see made at Australia's biggest airports?

Season’s Greetings from Travellers’ Check. This is the last blog for the year. We’ll be back on Monday, January 16.