Western Sydney Airport (WSI) Discussion

[RooFlyer]

I don't think it's a fait accompli that WSI will be much cheaper. It hasn't been developed as a cheaper or lower cost airport, rather it's been developed to add capacity.

What do you think about the possibility of WSI offering “cheaper” fees and charges to encourage business, say for 3 to 5 years?

 

[evanb]

It was just an example to highlight the predatory anti-competitive market conduct in which Qantas engages on a regular basis.

The OP begs to differ

But the irony is that QF actively lobbied against the concept of the PRSS slots in the first place and have been lobbying for their removal/reform ever since, yet they persist. PRSS slots are one of the biggest impediments more competition.

 

[evanb]

What do you think about the possibility of WSI offering “cheaper” fees and charges to encourage business, say for 3 to 5 years?

WSI don't need to. SYD's capacity constraints at peak times are such that there's plenty of pent up demand from domestic airlines to start new flights, it's part of why Virgin, Qantas and Jetstar have more aircraft on order than immediate replacement needs.

But we can take the practical view. JQ and QF have committed 10 and 5 aircraft to WSI in the first year. That's incremental capacity growth that they've planned for. It's not coming across from SYD. Now is the argument that if they cut their fees they'll attract JQ and QF to move flights over from SYD? They could, but they would inevitably lose the SYD slots. Don't see them giving up those slots for a small short term cost savings?

 

[justinbrett]

The question is how big of a loss is the shareholder (Australian Government) prepared to accept and for how long.

I think it’s easier to hand out incentives and keep fees and charges at sustainable levels than make a loss and have to increase them later.

If the government ever wants to sell WSI, the books look better if they’re making a profit and incentives are given independently of the airport - like what already happens at other commercially owned airports.

 

[evanb]

The question is how big of a loss is the shareholder (Australian Government) prepared to accept and for how long.

I think it’s easier to hand out incentives and keep fees and charges at sustainable levels than make a loss and have to increase them later.

If the government ever wants to sell WSI, the books look better if they’re making a profit and incentives are given independently of the airport - like what already happens at other commercially owned airports.

Point taken, but this presumption works off a principle that some temporary cut in airport fees will generate enough incentive for airlines give up capacity in SYD and hence give up their historical reclaim to slots while loosing network connectivity.

It might work for Ryanair to shift capacity from airports with limited slot value and zero network effects, but not convinced that it'll shift Australian carriers. Just look at Haneda and Heathrow as examples, despite huge cost savings it didn't get any non-forced capacity shifting. Sydney is more of a Haneda or Heathrow than it is Frankfurt, Rome or Paris.

 

[justinbrett]

Point taken, but this presumption works off a principle that some temporary cut in airport fees will generate enough incentive for airlines give up capacity in SYD and hence give up their historical reclaim to slots while loosing network connectivity.

It might work for Ryanair to shift capacity from airports with limited slot value and zero network effects, but not convinced that it'll shift Australian carriers. Just look at Haneda and Heathrow as examples, despite huge cost savings it didn't get any non-forced capacity shifting. Sydney is more of a Haneda or Heathrow than it is Frankfurt, Rome or Paris.

I wasn’t necessarily saying it would happen, just that if it did I’d expect it to be done through separate government incentives rather than discounting fees.

As you point out it might not be needed at all. Maybe VA is hanging out for an announcement and when they realise it’s not coming they’ll commit anyway.

 

[RooFlyer]

some temporary cut in airport fees will generate enough incentive for airlines give up capacity in SYD and hence give up their historical reclaim to slots while loosing network connectivity.

I was actually thinking more about possible new services. As in: hey Qantas, if you want to start up that possibly marginal new service, Sydney to xx_ - we have a deal for you so you can give it a try.

But I guess that then comes up against the old lack of aircraft problem.

 

[Sabot]

What do you think about the possibility of WSI offering “cheaper” fees and charges to encourage business, say for 3 to 5

I was actually thinking more about possible new services. As in: hey Qantas, if you want to start up that possibly marginal new service, Sydney to xx_ - we have a deal for you so you can give it a try.

But I guess that then comes up against the old lack of aircraft problem.

And the lack of people wanting to transit into the middle of nowhere to fly out of WSI.

 

[RooFlyer]

And the lack of people wanting to transit into the middle of nowhere to fly out of WSI.

By transit, I guess you mean travel to the airport?

Covered about 10 times upthread. WSI is not in the middle of nowhere for millions of people. Population catchment almost twice that of South Australia.

 

[Sabot]

By transit, I guess you mean travel to the airport?

Covered about 10 times upthread. WSI is not in the middle of nowhere for millions of people. Population catchment almost twice that of South Australia.

That's correct yes.

Mate, I had to zoom out on the map 3 times to see if it was actually even in Sydney.

 

[moa999]

Think the lack of transit options will mean the majority of international flights remain at SYD until WSI grows into itself and expands.

Some international back of clock operations probably the initial exception (eg SQ to SIN and QF/JQ to AKL, maybe with time EK with a midnight departure) with perhaps a smattering of narrowbody services to NZ and Bali.

Will be interesting to see how routes develop.