Speculation is growing that Australia's federal cabinet will kill the controversial plan for a second Sydney airport at Badgery's Creek.

Instead, the government will seek to boost capacity at the present Kingsford Smith airport, which is forecast to reach saturation by 2007.

Debate over a second Sydney airport has raged for years and the longer it has dragged on, the more opposition has grown towards the A$5 billion ($3 billion) project. Even after Badgery's Creek cleared a second environmental review last year, cabinet members continued to question it.

Neither airlines, passengers, local residents, nor the state government want an airport at the site, 46km southwest of Sydney. Its main advocates have been Sydney residents who live under the Kingsford Smith flight paths.

A high-speed rail link between Sydney and Canberra is now also being viewed in a new light in relation to the airport issue. It has been widely believed that a new airport site might be picked somewhere along that route farther out of town. However, cabinet members seem to be banking on the rail link to divert passengers from aircraft to train, thereby extending the capacity of the present airport.

It is hard to see how that would make much difference. Just under 900,000 passengers fly between Sydney and Canberra each year. That is 6% of Sydney's domestic traffic, and only 4% of its total traffic.

The other ways to boost Kingsford Smith's capacity are to relax its curfew or to introduce a cap on slots. Both moves would take great political courage in view of the sensitivity of Sydney residents on these issues.

Meanwhile, Melbourne's much-maligned common user terminal was due to open in late October. It will give start ups Impulse Airlines and Virgin Blue their first real home at Australia's second biggest airport. Both have been using interim space while construction on the new terminal lagged amid a row over fees.

Source: Airline Business