ALC welcomes Budget supply chain boost

The significant infrastructure investments contained in the 2017–18 Federal Budget have the potential to deliver substantial improvements to supply chain efficiency and significantly boost economic growth, according to the Australian Logistics Council (ALC)
“The Government should be commended for making clear commitments to two significant infrastructure projects crucial to the freight and logistics industry,” said Michael Kilgariff, Managing Director, ALC.
“The transformative potential of the Inland Rail project has been talked about for decades, with incremental progress being made over the past several years, including a positive assessment of the business case by Infrastructure Australia. The $8.4 billion commitment announced in the Treasurer’s speech tonight will finally allow its construction. At long last, we can stop merely talking about this project’s potential, and instead begin to witness it.”
Kilgariff added that the establishment of a safe, reliable port-to-port rail link for freight between Melbourne and Brisbane is the only way to simultaneously meet Australia’s burgeoning freight task, alleviate congestion on existing freight networks, create regional jobs and boost growth.
“To fully unleash the benefits of this project, the line must run to the ports of Melbourne and Brisbane, and comprise efficient rail linkages to the ports of Botany, Kembla and Newcastle in NSW,” he added. “We must also support the development of intermodal freight hubs at appropriate intervals along the route.”
Kilgariff also hailed a $5.3 billion commitment to construct the Western Sydney Airport and $75 million to duplicate the Port Botany freight rail line, noting that the projects would bring to fruition “critical” freight infrastructure projects that would further support economic activity and job creation.
“The Budget’s strong focus on infrastructure is timely, coming less than six months after the Federal Government agreed to ALC’s request to develop a National Freight and Supply Chain Strategy,” he added. “We welcome the measures announced tonight as a positive first step in continuing efforts to deliver a safer, more efficient supply chain.
“It’s also pleasing that Infrastructure Australia has been provided with an additional $11.9 million to deliver its core functions of assessing projects and producing an infrastructure pipeline.”
He noted that the proposed new Infrastructure and Project Financing Agency within the Department of Prime Minister and Cabinet would need sufficient technical expertise to aid the national leadership in making sound infrastructure funding decisions.
“This includes a willingness to make Commonwealth funding for projects conditional on the implementation of appropriate strategies to protect freight corridors, and minimise urban encroachment on freight infrastructure,” Kilgariff concluded.

Sydney Airport 147m into the red

 
Sydney Airport’s $8-billion-plus debt has added to reduced revenue from airline traffic to drive the corporation to a loss of $146.9 million for the calendar year 2008.
 
Sydney Airport reported earnings before interest and tax (EBIT) of $460.692 million for the year, $47.9 million up on 2008. But its income was well below its interest expenses for last year, more than $195 million short of the $655.8 million in financing costs.
 
The airport also revealed it had net liabilities of $1.28 billion on its balance sheet. But it said the $3.48 billion increase in its equity value since the airport’s privatisation in 2002 offset this.
 
It said all its debt covenants had been met and budgeted cash flows for 2009 "show a significant surplus after debt service".
 
The Sydney Morning Herald reports that Sydney Airport’s $8.1 billion of debts are more than six times what they were when the asset was sold by the Howard government to a Macquarie-led Southern Cross Airports consortium in June 2002. When the airport was first privatised in 2002 it had borrowings of $1.2 billion.
 
Sydney Airport chairman Max Moore-Wilton put a brave face on the results, saying: “An important refinancing was successfully undertaken to secure the capital expenditure requirements to the end of 2012. The refinancing of $870 million in term facilities, maturing towards the end of 2009, is anticipated to be completed in the first half of this year. Following this, Sydney Airport will have no further debt maturities until late 2011.
 
“The ongoing global financial crisis means that 2009 will have its own distinctive challenges and while Sydney Airport is obviously not immune to global economic factors, it is also the case that it has performed strongly through the course of 2008.”

Opposition slams second Sydney airport study

A second major airport for Sydney will be considered as part of a historic review of the nation’s aviation sector, which has received scathing comments from the opposition.

Federal Transport Minister Anthony Albanese says there has been considerable growth in aviation with passenger numbers tripling during the past 20 years on the back of average annual growth of 5.8 per cent.

It was clear Sydney airport was under enormous pressure and the government remained committed to building a second airport, Mr Albanese said.

"We have said that we will consider that as part of the consideration of the master plan for Sydney airport in 2009.

"But we want to have all these considerations in the context of a national plan."

The plan would provide certainty for the industry and incentive to plan and invest for the long term, he said.

Mr Albanese said he will release a discussion paper today ahead of a green paper in September.

A white paper, setting out a comprehensive two-decade plan for aviation, will be available in mid-2009.

"We believe we need to move away from the previous government’s policy where aviation policy was on autopilot," he said.

"There was no strategic plan looking at the industry, the way that it related to economic development, the way that it related to the communities involved around our airports.

"It’s time to have a comprehensive review given the importance aviation will continue to play into Australia’s future."

But the leader of the Nationals and transport spokesman, Warren Truss, said the Rudd Labor Government has once again avoided making the hard decisions – and the easier ones too – by announcing yet another policy review, this time on aviation.

“This is at least the 74th review called since the election by the Rudd Government, and it is likely a few others have snuck through under the radar,” Mr Truss said.

“After 11 years in opposition, you would have thought Labor might have known what it was going to do when it was elected to Government,” he said.

“The sad truth is the Government and its very green new minister, Anthony Albanese, have no idea about transport policy and infrastructure. Labor has done absolutely nothing except steal Coalition ideas, sub-contract work out to other bodies and committees headed by Labor mates and call massive reviews with years to report back.

“This latest aviation inquiry is yet another example of Rudd Labor governing by review and avoiding what we pay them to do, which is to make decisions,” Mr Truss said.

 

Sydney Airport curfew to stay, says Albanese

A380 at Sydney Airport

While airlines are calling for abolition of a curfew at Sydney Airport, federal transport minister Anthony Albanese said it is off the agenda. 

Qantas and Singapore Airlines have been lobbying the Federal Government to loosen operation regulations, saying the current cap of 80 flights per hour and the 11pm to 6am curfew are limiting growth at the air hub, the AAP reported.

 
They said quieter planes would allow the night curfew to be abolished and landing of the jets should be permitted.
 
If no change was made to scrap the limitations, the region would require another airport to handle increasing traffic, Qantas said in its submission to the Government.

But federal transport minister Anthony Albanese rebuffed the proposal, saying the regulations are not up for negotiations as they strike the right balance for communities in the vicinity of the airport.

 
“The curfew and cap…strike a balance between the commercial interest of airlines and the airport with the interest of those people who live around Sydney Airport,” he told the ABC Radio.

“The curfew and the cap are legislated and they are not up for negotiation.

“No government is likely to shift on either the curfew or the cap, it has bipartisan support in the commonwealth parliament and I can’t see that changing.”

 

Boeing strike spoils Virgin’s plan

V Australia.

V Australia…delayed.

An ongoing strike at aircraft manufacturer Boeing is forcing Virgin Blue to postpone the launch of its much-anticipated long-haul international service, V Australia.

The month-old industrial dispute at Boeing’s Seattle plant saw around 27,000 workers downing tools, resulting in a delay in the delivery of three Boeing 777-300ER aircraft to the budget airline.  

The airline has been heavily advertising the launch, which was originally slated for December 15 this year. As the dispute continues with no immediate end in sight, the company nominated a tentative new V Australia launch date of 28 February 2009.

The company said it would contact all passengers booked to travel during the delayed period to offer alternative arrangements, with further advance ticket sales for travel between 15 December 2008 and 28 February 2009 suspended.

However, it said V Australia’s Brisbane-Los Angeles direct services, due to launch on 1 March 2009 were not affected.

The company said the impact of the serious delay would be addressed between the airline and Boeing, and if the industrial dispute was resolved in the short term it would act swiftly to bring forward V Australia’s start-up schedule.

The Boeing 777 aircraft to be delivered to the airline were in advanced stage production at the US plant.

Meanline, Virgin Blue has sent a $500,000 bill to Airservices Australia, requesting for a compensation for the delay of 120 of its flights at Sydney Airport.

The delay came as Airservices Australia again failed to man the air traffic control tower over the weekend, forcing the airline to find accommodation for 180 passengers in Melbourne after planes missed the curfew into Sydney, The Age reported.

“It’s been going on all year and its not getting better, it’s getting worse… it is seriously inefficient and it affects us,” a spokesperson told the paper.

Airservices was reported to have blamed the delays on controllers, who it had accused of taking sick leave without permission and refusing to work overtime.

Sydney Airport to spend big money

Sydney Airport has planned some $1.5 billion of growth capital expenditure over the next 10 years. This is in addition to the $850 million capital expenditure that has already been made since the Airport was privatised in July 2002.

Russell Balding, Sydney Airport’s CEO has outlined the airport’s recent and planned expenditure.

"Some of the benefits of our investment program are already evident. For example, the $120 million which was spent on upgrades so that the airport was ready for the A380. [Sydney Airport is] still one of the very few airports in the world that can accommodate the A380 and because we are located in one of the best cities in the world Singapore Airlines chose Sydney for the world’s first passenger flight of the new A380 when it flew between Singapore and Sydney in October last year. This was a milestone in global aviation history and we invested $120 million to secure that service."

The airport has also commenced a $500 million expansion and upgrade of the International Terminal. This will be the first significant upgrade since the 2000 Olympics and will comprise three major components:

• The terminal will be expanded by more than 7,000 square metres providing centralised security screening and passenger processing for Australian Government agencies along with world class passenger facilities on the departures level;

• There will be a new outbound baggage handling system; and

• Expansion of the arrivals baggage system to handle more passengers.

$80 million to build an extension to the runway safety area at the western end of the east-west runway to comply with a new CASA safety regulatory requirement is also on the drawing board. This is a very complex engineering project as it involves effectively bridging over the existing heritage-listed sewer outfall pipeline as well as over  the M5 East tunnel.

The construction of this project will have operational impacts on the east-west runway and the runway will have to be closed during part of the construction period, causing major disquiet amongst local residents.

"The other major initiative that we will be undertaking through the course of 2008 is updating the existing 20 year Sydney Airport Master Plan," Mr Balding said.

The current Master Plan was prepared and approved by the Australian Government in 2003. A formal review and update of the Master Plan is legislatively required.

The Master Plan, looking forward twenty years to 2029, will consider issues like air traffic and passenger forecasts, airfield and terminal development, and air services considerations such as navigational aids and other emerging technologies.

"It will consider how we can sustainably manage aviation growth by employing new technologies that minimise aircraft noise and other environmental impacts. It will establish the strategic direction for the efficient and economic development of the airport. It will also seek to reduce potential conflicts between uses of the airport site, and to ensure that uses are compatible with the areas surrounding the airport," he said.

Virgin picks Sydney

Virgin Blue (AFP Photo: Greg Wood).

Virgin Blue has selected Sydney Airport for its jet base. (AFP Photo: Greg Wood)

Sydney Airport has been chosen as Virgin Blue’s new training and maintenance base, scheduled to be operational by the end of this year.

The new base, which is set to become a line maintenance hub for the airline’s Australian-based aircraft, is expected to provide a significant economic boost for the NSW economy, creating around 1,000 jobs and attracting more than $10 million of investment for the state’s aviation market.

A site at Botany will be utilised for the training of pilots and cabin crew.

NSW Development Minister Ian MacDonald said Sydney was the logical choice over other capital cities such as Brisbane, Melbourne and Canberra.

“Virgin has shown confidence in Sydney and NSW by effectively creating 2,000 new jobs over the last six months in Sydney,” he told the ABC.

“It’s fantastic news for our economy that’ll bring a lot of economic benefits into NSW.”

Virgin Blue chief executive Brett Godfrey said the expansion was part of a direct investment of more than $60 million in NSW.

“If you consider the investment in infrastructure, particularly the Botany facility, I think…comfortably in excess of that,” Mr Godfrey told AAP.

Earlier this year, the carrier has also decided to house the operating headquarters of its new international long-haul brand V Australia at Mascot, NSW.  

While the company also operates similar facilities in Brisbane and Melbourne, their work will not be redirected to the Sydney hub as it will house part of an expanding fleet.

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