8-Oct-2010 10:05 AM

Former Virgin CEO makes case for Sydney airport 'supersite'

Virgin Blue's former CEO Brett Godfrey made the following comments at the 52nd Sir Charles Kingsford Smith Memorial Lecture to the Royal Aeronautical Society (Crikey, 07-Oct-2010/The Australian, 08-Sep-2010):

  • “Supersite” Sydney Airport: Mr Godfrey stated the Australian Government should consider constructing a new “supersite” Sydney Airport to replace the existing airport. He commented that cities with the most impressive airport infrastructure have single airports. Mr Godfrey added such an airport would be preferable to plans to construct a second, overflow airport, as it would avoid the need for transport between the two airports. However, he noted that such an airport would only be preferable provided it had appropriate infrastructure, such as high-speed rail links. The former CEO also stated the “supersite” airport could be funded through the sale of the existing site for development. Australian and NSW governments are in the process of identifying sites for a second Sydney airport and plan to make an announcement in mid-2011. Five options have reportedly been selected thus far. Mr Godfrey also criticised the continuation of Sydney Airport’s curfew and limit on the number of flights from the airport, despite the introduction of environmentally improved aircraft and flight practices;
  • ASEAN market: The former CEO said the Australian Government should ensure the country is a “equal political or association member” in Asia as the region has become a “driving force for growth and with ever increasing middle class disposable incomes that will ensure this segment has considerable blue sky ahead”;
  • A380s: He also believes it will not be long until an airline introduces single-class, 850-seat configuration A380s to the market;
  • Consolidation: Mr Godfrey criticised governments for using flag carriers as “tools of public policy” and not promoting competition in the industry. He stated governments must allow carriers to consolidate in order to survive, while also thinking “globally themselves to offer survivability by levelling the playing field”. He also suggested airlines look to revenue JVs in the meantime, which will allow them to lower costs.

Virgin Blue: “In a nutshell, the most efficient operation is a single supersite. Having two airports, who are you going to get to move out to it? Are you going to send Qantas? Qantas won't go. Will Virgin go? No. Are you going to send Rex out there? I think there's a carrot-and-stick opportunity here to say if everyone takes a step back and has a think about it, it really makes more sense to have one (airport), as long as it doesn't take any longer to get into town … There's no doubt it's a tough decision [in removing flight curfews and flight caps] and there's no doubt there will be some losers, but I contend that's the mandate of good leaders on either side of politics, that you just have to make a decision … I have always been pro-competition but in the context that to has to be fair competition … at least to begin with. Australia’s airlines must be given the chance to compete with their global brethren. A quick 'cut and run' approach by governments is agreed as the wrong tack. The consequences would be akin to what many Romans saw after a day at the Colosseum – certainly a sight not befitting young eyes … In the future, I believe pre-emptive rev JVs will be more prevalent. What is key about these arrangements compared with a code-share is that two carriers from different home markets are not wasting serious amounts of money chasing the others loyal passenger, because in a revenue JV, all revenues are shared,” Brett Godfrey, former CEO. Source: The Australian, 08-Sep-2010.

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