Could Sydney Nancy Bird Walton Airport top a Kingsford Smith sale?

Charles Kingsford Smith was Australia's renowned aviator of the 1920s and 1930s - just as Nancy Bird Walton was his female contemporary and counterpart. There was always a friendly but competitive relationship between the two. The friendly part of that connection may be absent in five years' time, when the Western Sydney Airport is scheduled to open.

Meanwhile however, the 'rush' to buy Sydney Airport has settled into a one-horse race with no counterbidder (yet) in sight as the lone runner approaches the finishing tape.

A third bid has been made by the group, and while some institutional investors think there is still some leeway, the Sydney Airport board has cleared the decks for due diligence, and the odds now must be on a sale in 1Q2022 that values the airport at more than AUD30 billion.

The air transport industry remains in a parlous state globally. Although there is optimism for the time being, with capacity levels back between 60% and 80% of what they were in 2019 in different regions, concerns remain about new virus variants and the take-up rate and efficacy of vaccines. There is also a host of other matters, while leisure and business travel remain impacted by quite divergent factors.

One important player yet to emerge is the Australian Competition Commission, but that body is unlikely to exercise any significant influence over the deal, since the consortium members hold only minority shares in other airports and they are not directly competing ones. Nevertheless, the airlines remain concerned.

Surprisingly perhaps, there has been little discussion so far as to what impact the Western Sydney (Nancy Bird Walton) Airport, scheduled to open in 2026, will have on the existing Sydney Kingsford Smith Airport. The scope of that new airport (currently a government project, although the private sector will be invited to participate later) is growing, and there will be an 'airport city' attached to it. There is an argument that it represents the future of aviation in the Sydney area more than Kingsford Smith does, and that it might be a preferred investment target.