Australian airlines fear charges will soar at Sydney's Kingsford Smith International Airport, because its new owners have paid too much for it.
Southern Cross Airports, a consortium led by Macquarie Bank, paid A$5.6 billion ($3.2 billion) - up to A$1 billion more than rival bidders' offers. The price represents a multiple of 14.3 times the airport's projected 2003 earnings before interest, tax, depreciation and amortisation. The comparable multiple for Melbourne Airport was 13.2.
BARA, the Australian airline industry association, warns: "A$5.6 billion seems to the airlines to be well over what the market was predicting the airport might be worth and that makes them pretty nervous about what future charges might be."
Lead partners in the consortium, which is banking on passenger traffic doubling over 20 years, are German airport operator Hochtief AirPort and Commonwealth Bank of Australia. Under the deal, Southern Cross will acquire the outstanding shares in Sydney Airport Corporation (SACL), the company which operates and manages the airport under a 99-year lease from the government.
After SACL debt is deducted from the proceeds, the Australian government will use the remaining A$4.2 billion to reduce debt.
Canberra says the present noise management practices and the 80aircraft movements an hour capacity cap will remain, and conditions are in place to protect new entrants and regional airlines.
Qantas and Virgin Blue are pushing for additional gates in Ansett's now defunct Sydney terminal, idle since the carrier's collapse in September. Qantas wants the nine-gate concourse adjacent to its domestic terminal, with Virgin Blue requesting the other nine-gate concourse.
Source: Flight International
