1··I'IiPOLICY-MAKING FOR SYDNEY'SAIRPORT NEEDS: A Comparative andHistorical PerspectiveWill SandersURU Working Paper No. 20December 1989IiI"' SEA RC H SCHOOL OF SOCIAL N NATIONAL UN lVERSITY

POLICY-MAKING FOR SYDNEY'SAIRPORT NEEDS: A Comparative andHistorical PerspectiveWill SandersURU Working Paper No. 20December 1989SERIES EDITORS:S. R. Schreiner and C. J. LloydISBN 0 7315 0827 0ISSN 1030-2921,'I-.:' j;.J /.,.,' .Urban Research UnitResearch School of Social SciencesAustralian NatiGnal UniversityGPOBox4Canberra, ACT, Australia 2601

Urban Research Unit, Research School of Social Sciences, Australian NationalUniversity 1989National Library of AustraliaCataloguing-in-Publication data:Sanders, Will, 1956- .Policy-making for Sydney's airpon needs.ISBN 0 7315 0827 0.1. Airpons - New South Wales - Sydney - Runways. 2. Kingsford-SmithAirpon (Sydney, N.S.W.). I. Australian National University. UrbanResearch Unit. Il. Title. (Series: URU working paper; no. 20).387.7362099441ii

URU WORKING PAPERSEstablished in 1966, the Urban Research Unit carries out studies in thesocial sciences on Australian cities. Work undertaken in the Unit ismultidisciplinary and ranges widely over economic, geographic, historical,sociological, and political aspects of urban and regional structure anddevelopment.URU Working Papers are issued on an occasional basis with the intention ofstimulating discussion and making research results quickly and easilyavailable. Most papers will be published in final form elsewhere. In somecases, material will be published which, although of specialist interest, hasno ready outlet.Working Papers represent the work of members of the Unit or paperspresented to a DRU-sponsored seminar or conference. In most cases, theWorking Papers are Australian in content or relevant to the Australiancontext. Proposed papers are subject to a preliminary internal review of acommittee comprising the Series Editors and the Head of Unit. If thereview committee deems the papers suitable for possible publication, it isthen sent to at least one external assessor for further comment.The views expressed in these papers are those of the authors and not theUrban Research Unit.Series Editors:Shelley R. Schreiner & Clem Lloydiii

ABSTRACTThis paper focuses on the decision made by the Hawke governmentin March 1989 to build a third runway at Sydney (Kingsford Smith)Airport (KSA), subject to normal environmental impact procedures.It notes that this decision was commonly hailed as a policy-makingsuccess and that past government procrastination over theconstruction of a third runway has been conversely seen as policymaking failure.The paper questions these perceptions of failureand success both by recounting the history of policy-making forSydney's airport needs and by setting the Sydney experience inIt argues that currentcomparative international perspective .congestion at KSA is only in small part a consequence of pastgovernment procrastination over runway development and that it isin much larger part a consequence of both unpredicted changes inthe various sectors of the aviation industry and a rather passivetraffic management and pricing approach adopted by the federalgovernment's aviation authorities.It further argues that in thelight of international experience, procrastination over runwaydevelopment at KSA can be seen for many years to have been asignificant policy-making success, and indeed can still be so seentoday .One of the current benefits of not having runwayconstruction at KSA nearing completion is that the aviationauthorities and aviation industry users in Sydney may be inducedto make both more efficient and equitable use of the existingrunway facilities at KSA than they have done in the past,particularly during peak hours.v

POLICY-MAKING FOR SYDNEY'S AIRPORT NEEDS:A Comparative and Historical PerspectivelWill SandersNational Research FellowUrban Research UnitINTRODUCTIONOn 22 March 1989, the Prime Minister Bob Hawke and the Ministerfor Transport and Communications Ralph Willis announced that the federalLabor government had decided to develop a third runway at Sydney(Kingsford Smith) Airport (KSA), subject to the satisfactory completion ofnormal environmental impac.t statement procedures. Proposals for such arunway had been at the centre of debates about Sydney's future airportneeds for twenty years. Throughout that period, a third runway at KSA hadbeen strongly advocated by the federal government's aviation authoritiesand by the aviation industry more generally. Previous federalgovernments, with the exception of the Fraser Coalition government in late1982, had baulked at giving support to any third runway plan. Laborgovernments, in particular, had been sensitive to the criticisms of such aproposal emanating from residents, councillors and parliamentarians in thestrongly pro-Labor areas around KSA. Those critics had argued that KSA'sadverse impact on the surrounding urban area, particularly throughexposure to aircraft noise, was already considerable and should not beincreased by the addition of an extra runway. Labor governments hadinstead preferred the construction of a second airport as the next major stepin meeting Sydney's airport needs. Indeed, when the Hawke Laborgovernment came to power in 1983, it did so with a firmly statedcommitment to no third runway at KSA. The Hawke government movedquickly to establish a second Sydney airport site selection program in thelatter half of 1983 and in February 1986 announced that a second airportsite would be acquired at Badgery's Creek in the south-west of the Sydneyregion. Events appeared to be proceeding fairly smoothly towards Labor'sno-third-runway plan until sometime late in 1988.This article has been accepted for publication in the Current Affairs Bulletin.

With the coming of Australia's bicentennial year and the overseastourism boom which accompanied it, Sydney's airport facilities became amajor focus of public attention and debate in a way they had not been forseveral years. Calls for the improvement of airport facilities becamestrident. The Hawke government's initial reaction was to suggestaccelerated or 'fast-tracked' development at Badgery's Creek. However,renewed calls for the construction of a third runway became persistent.Aviation industry interests were joined in their advocacy of such a runwayby diverse organisations and individuals drawn from the tourism industry,the Sydney business community and country NSW, as well as the SydneyCity Council, the newly elected NSW State Coalition government and thefederal Coalition opposition. Media commentary was generally in favourof a third runway and advice coming to the federal government from itsown aviation authorities was also still strongly of the pro-third runwaypersuasion. In the end, the weight of interest group, expert bureaucraticand public opinion proved too great for the traditional Labor forces ofopposition to the third runway proposal. A reversal of Labor's no-thirdrunway policy was finally effected, though the commitment to a secondairport at Badgery's Creek was also retained.The March Cabinet decision to proceed with a third runway wasgenerally greeted in the media as a significant policy-making success.Rational economic considerations, so the common interpretation ran, hadfinally triumphed in the policy-making process over irrational politicalones. Indeed the Prime Minister and the Minister for Transport andCommunications bolstered this interpretation of events by arguing in theirmedia release that the decision 'followed an exhaustive analysis of theeconomic and aviation policy aspects of all options for meeting Sydney' sairport needs' and that this analysis revealed that the 'economically rationaloption' was 'to build a third runway at KSA subject to an EIS, and proceedwith the development of Badgery' s Creek but not on a fast track ' .2Favourable media commentary was, however, also often begrudgingin its praise. This derived from the fact that the decision to build a thirdrunway had been so many years in the making. Commentators were wont topoint out that expert reports had been calling for the construction of such a2Joint Statement From the Prime Minister and the Minister for Transport andCommunications, the Hon. Ralph Willis, 22 March 1989, p2.2

runway for over twenty years and that past government procrastination andpolicy-making failure somewhat marred the present success. But just howmuch of a failure had past efforts to provide for Sydney's airport needsbeen? How much was past government procrastination to blame for theconges tion which seemed to have reached new proportions at KSA in 1988and which had sparked this new round of public attention to the airportissue? And just how acute had the need for additional runway capacity atKSA become by the beginning of 1989?My aim in what follows is to explore these questions both by placingthe Sydney experience in some degree of comparative internationalperspective and by drawing on the history of the Sydney case in somegreater detail. I will suggest that the present congestion at KSA is only insmall part a consequence of past government failure to back theconstruction of a third runway. It is in much larger part the consequence ofsome major unpredicted changes in the various sectors of the aviationindustry over recent years, both worldwide and in Sydney. Indeed, in thecontext of these rapidly changing circumstances in the aviation industry,federal government procrastination over the construction of a third runwaycan be seen for many years to have been a considerable success. I will alsosuggest that present congestion at KSA is, in part, also a consequence of arather passive traffic management approach adopted by the federalgovernment's aviation authorities over the years. This traffic managementregime, as the federal aviation authorities are now beginning to admit, isinefficient in its allocation of an expensive public resource and is .capable ofsignificant amelioration irrespective of the addition of a third runway. Letme elaborate further by discussing developments in the aviation industryand in airport planning, both worldwide and in Sydney, since the beginningof the jet age.THE COMING OF THE JET AGE, UNPRECEDENTED GROWTH ANDTHE RUSH TO DEVELOP AIRPORTSIn the late-1950s when jet aircraft were first introduced into the fleetsof commercial air carriers around the world, the major challenges forairport policy-makers were to provide longer, stronger runways for thenew heavier aircraft and to cope with adverse community reactions to the3

intrusions of jet aircraft noise. In some cities, such as Melbourne, meetingthese challenges led to the rapid development of new airports on largegreenfield sites on the edges of the metropolitan areas they served. InSydney, however, as in numerous other cities around the world, thesechallenges were met at the existing airport. At KSA, a late night curfew wasimposed on jet aircraft movements and the existing north/south runway wasextended into Botany Bay to the south.During the 1960s, ·these two initial problems of airport policy-makingin the jet age were joined by another; passenger and aircraft movementnumbers began growing at unprecedented and unpredicted rates. In thedecade from 1960 to 1970, passenger movements worldwide virtuallytrebled, from 106 to 311 million per annum (see Table 1 and Figure 1). InSydney, they multiplied at a similar rate, from 1.6 to 4.4 million (see Table3 and Figure 3). Aircraft movement numbers in Sydney during the decadeabout doubled, from 59,000 in 1960 to 125,000 in 1970 (see Table 4 andFigure 4). The incomplete data presented in Table 2 and Figure 2 suggestthat aircraft movement numbers probably also doubled in the 1960sworldwide.Aviation and airport planners of the 1950s had failed to foresee thisrapid growth in passenger and aircraft movement numbers during the1960s and were caught by surprise.3 Making up for their omissions of theprevious years, airport planners now began projecting forward the growthrates of the 1960s. Government aviation authorities around the worldquickly became convinced of the need to provide major expansions of theirairport facilities, including additional runway capacity, by some time in theAirport construction proposals becamemid- to late-1970s.commonplace-a fourth airport for New York, a third for London, asecond for Montreal and Tokyo and either a second airport or a parallelrunway expansion for the existing airport in Toronto, to name a few.434See Richard De Neufville, Airport Systems Planning: A Critical look at the Methodsand Experience, Macmillan, London, 1976, especially chapter 3.See Elliot J. Feldman and Jerome Milch, Technocracy Versus Democracy:· TheComparative Politics of International Airports, Boston, Auburn House PublishingCompany, 1982 and The Politics of Canadian Airport Development: lessons forFederalism, Durham, Duke Press, 1983. See also K.J. Radford and M.O. GiesenThe Analysis of Conflicts over the location of Airports Near Major PopulationCentres, University of Toronto York University Joint Program in Transportation,Research Report No 87, 1984 for details of these cases.4

ill the Sydney case, the Sydney Region Outline Plan of 1968 reportedthe plans of the federal Department of Civil Aviation as being the provisionof a third runway at KSA by the mid-to late-1970s, followed by furtherairport construction at other sites in the region at some time in the 1980s.5In 1969, a Commonwealth government interdepartmental committee wasestablished to report on Sydney's future commercial airport requirementsand in 1970 it recommended that a joint Commonwealth/NSW Stategovernment committee be established to advance the matter further. ill1973, this joint committee, led by the Commonwealth government'saviation authorities, sought a decision in principle from the Commonwealthgovernment cabinet to develop a third runway at KSA by the early-1980s.However, the newly-elected Whitlam federal Labor government directedinstead that a second airport be developed at Galston in Sydney's north west.This was not a proposal which the aviation authorities or the aviationindustry supported, and it was quickly dropped. Airport construction inSydney was put aside by the federal aviation authorities pending somechange in the attitude of their political masters.This was the sort of equivocation which would lead in later years tomuch criticism of airport policy-making for Sydney. However, AustralianCommonwealth governments were not the only ones to equivocate in thelate-1960s and early-1970s. All around the world, resident opposition tothe airport construction proposals of the late-l 960s and early-1970s wasconcerted and in a few instances, as in Tokyo, quite violent. Manygovernments heeded the views of these resident opponents rather thandecisively backing the construction plans of their aviation experts. TheLondon, New York and Toronto airport construction proposals of the late1960s and early-1970s, to name just three, suffered from the same problemsof government equivocation and lack of support as did the Sydney proposal.There were, however, other instances, such as in Paris, Montreal andTokyo, where governments did give decisive support to the constructionplans of their aviation authorities of the late-1960s and airport developmentdid go ahead.5NSW State Planning Authority, Sydney Region Outline Plan, 1970-2000A.D. AStrategy for Development, Sydney, SPA, March 1968.5

THE OVERPREDICTION OF RUNWAY NEEDS-THE SUCCESS OFNOT BUILDING IN THE 1970S AND EARLY-1980SDuring the late-l 970s and the early-l 980s, the airport constructionissue lost much of the urgency it had been accorded in previous years. InSydney from 1976, the newly-elected Fraser Coalition federal governmentinitiated further inquiries into the city's airport needs through another jointcommonwealth/state government committee established in conjunction withthe also recently-elected Wran State Labor government. The Frasergovernment was, however, under little pressure to construct further airportfacilities at Sydney and it allowed itself to become entangled in a prolongedstandoff over the issue with the NSW State Labor government, at both thepolitical and official levels. While the Fraser Coalition Commonwealthgovernment was generally willing to go along with its aviation authorities'plans for a third runway at KSA, it argued that it could not act without stategovernment support. The State Labor government was of the secondairport persuasion and it was not until October 1982 that the federalaviation authorities finally convinced the Fraser Coalition Commonwealthgovernment of the need to proceed unilaterally with a third runway at KSA.The reason that the Fraser Coalition government could continue for solong to procrastinate over the Sydney airport issue in the late-1970s andearly-1980s was that the airport planners of the late-1960s had significantlyoverpredicted the additional airport facilities, and particularly runwayswhich would be required in these years. As a consequence, when thegovernments which had backed the construction plans of their aviationauthorities in the late- I 960s opened their new airports and expansions in themid-l 970s, they often found that these new facilities were veryunderutilised. Those governments which had equivocated, on the otherhand, as in the Sydney case, generally found themselves to be coping quitewell. Many airports around the world required new terminals to be built orold ones to be redeveloped in order to cope with new wide bodied aircraftand the larger numbers of passengers which they were carrying. However,few if any airports were short of runway capacity; the critical variablewhich had led to the new airport and major expansion proposals of a decadebefore. Indeed, by the late- I 970s, there was even something of a positiveaversion among governments to building new airports and runways, giventhe underutilisation of those that had been built.6

The reasons for this fairly consistent overprediction of airport andparticularly runway requirements of the late-1970s and early-1980s areworth exploring in greater detail. Some of them are quite commonlyunderstood, while others are not.A first reason for overprediction was that airport planners of the latel 960s had projected forward the growth rates in passenger numbers of the1960s in linear fashion. Actual growth in passenger numbers in the 1970sand early- l 980s was not as dramatic as this extrapolation suggested. Duringthe 1970s, passenger numbers both worldwide and in Sydney aboutdoubled, in comparison with the trebling of the 1960s (see Tables 1 and 3and Figures 1and3). In the early-1980s, in what was a major downturn forthe aviation industry both worldwide and in Sydney, passenger numbersactually declined for a couple of years and by 1984 were only justrecovering to their 1979/1980 levels (again, see Tables and Figures 1and 3).The second reason that the 1960s airport planners' overpredicted theairport needs of the late-l 970s and early-l 980s was their failure to foreseethe extent of the impact of larger wide bodied aircraft on the practices ofcommercial air carriers, and hence on aircraft movement numbers. Inworldwide terms, numbers of scheduled aircraft movements of commercialair carriers virtually remained static from 1973 to 1983 (see Table 2 andFigure 2). In Sydney, international aircraft movements went from 15,000in 1970 to 20,000 in 1978 and then actually fell slightly; not recovering totheir 1978 level until 1985. Interstate aircraft movements at KSA peaked ataround 63,000 in 1974 and then gradually fell back to as low as 46,000 inthe slump of the early-1980s (see Table 4 and Figure 4). In short, thenumber of aircraft movements in these two major industry sectors at KSAwas static or even in decline for over a decade, although passenger numberswere slowly increasing.A third reason for the 1960s overprediction of airport and particularlyrunway needs of the late-1970s and early-l 980s has to do with the nature ofrunway capacity. Official measures of runway capacity are not absolute.Rather they take existing aircraft mixes and daily peak-usage patterns andderive an 'attainable' daily and annual capacity by projecting these patternsforward to larger numbers of aircraft movements. In reality, as larger7

numbers of aircraft movements do eventuate, aircraft mixes are likely tochange, daily peaking patterns are likely to spread and attainable capacity islikely to increase. This can happen both as a result of changes in airportuser behaviour and can be further enhanced by airport managementchanges-such as the introduction of peak period landing price surchargesas occurred in London from the mid-1970s. The officially given 'annualattainable runway capacity' for the two London airports at Gatwick andHeathrow increased from 315,000 aircraft movement in 1963, toapproximately 350,000 in 1967, to 480,000 in 1971 and 600,000 by themid-1970s.6 KSA, by comparison, increased it annual attainable runwaycapacity from 180,000 aircraft movements in the early-1970s, to 190,000 inthe late-1970s, to 203,000 in 1983-84. If we compare these changingofficial estimates runway of capacity to total numbers of aircraftmovements actually occurring at KSA (given in the right hand column ofTable 4), it is evident that annual attainable runway capacity at KSA duringthis time continually expanded to 20,000 or more greater than actual annualaircraft movement numbers. Aviation experts working on airport planningfor Sydney and other cities around the world had not predicted such anexpansion in attainable runway capacity and hence had over-estimatedrunway needs.Once these three aspects of the overprediction of airport requirementsfor the late-1970s and early-1980s are appreciated, one of theunacknowledged successes of policy-making for Sydney's airport needsduring these years has to be that successive federal governments did not getcaught in the rush to construct airport facilities, and particularly runways,earlier than they were in fact required. Both the Whitlam and the Frasergovernment's were in retrospect lucky not to have proceeded with furtherairport construction too early. Procrastination during these years certainlyhad its benefits, and decisive support for airport construction certainly hadits costs; as those involved in the Montreal, Tokyo and Paris cases were soonlearning. This analysis is at odds with the common interpretation that amore successful policy-making outcome in the Sydney case would have beento have built the third runway some years ago.6Peter Hall, Great Planning Disasters, University of California Press, Berkeley & LosAngeles, 1980, p23.8

THE GROWTH OF SYDNEY'S INTRA-STATE COMMUTER SECTORAND CHANGING RUNWAY UTILISATION AT KSAThe aviation industry operating out of KSA comprises not onlyinternational and interstate operators, but also intra-state scheduled servicesand non-scheduled general aviation. In the 1960s, the intra-state sector ofthe Sydney aviation industry was dominated by two airlines, East West andAir NSW. Each was licensed by the NSW State government to provide amonopoly service on approximately 50 per cent of state's recognisednetwork of intra-state air routes. This network served almost 50 countrycentres, some individually and some as part of multi-hop services. Fromthe late-1960s, however, the two intra-state airlines began to withdrawservices from a number of these centres, arguing that the services were nolonger economically viable given the new types of planes with which thetwo airlines were now operating and the cessation of earlier federalgovernment subsidies for the development of rural air routes. In the wakeof these withdrawals, smaller operators applied to the NSW government tolicence 'commuter' services using smaller aircraft between unservicedcountry centres and Sydney. The NSW government generally acceded tothese licensing requests and thus was created a new element of the Sydneybased aviation industry which came in time to be known as the 'intra-statecommuter' sector.The growth of this new intra-state commuter sector at KSA during the1970s and early-1980s was both spectacular and in marked contrast to thecontemporary slow down in the larger international and interstate sectors ofthe industry. By 1976, when the intra state sector was first fully separatedinto its 'commuter' and 'regional' components for statistical purposes, thecommuter sector was already accounting for 22,000 aircraft movementsper annum at KSA; i.e., almost as many movements as the intra-stateregional sector's 26,000 and more movements than the internationalsector's 19,000 (see Table 4 and Figure 4). The commuter sector in 1976was, however, only carrying about 127,000 passengers compared with theintra-state regional sector's 829,000 (see Table 3 and Figure 3). By 1982, atthe height of its development, the commuter sector was generating anexpanded 45,000 aircraft movements per annum at KSA and carrying327 ,000 passengers compared with the intra-state regional sector's fairly9

constant 24,000 movements and 747,000 passengers (again,see Tables andFigures 3 and 4).In summary, during the 1970s and early-1980s, the intra-state portionof Sydney's aviation industry, through the commuter service explosion,produced a rapidly increasing number of aircraft movements at KSA butdid not greatly expand its total passenger load. The large international andinterstate carriers were, by contrast, through the introduction of widebodied aircraft, gradually carrying more passengers with a fairly constant,even slightly declining, number of aircraft movements. If we add to this aslowly increasing number of non-scheduled general aviation movements(see Table and Figure 4), then runway utilisation patterns at KSA duringthese years can be seen to have been changing dramatically. More smallerplanes were sharing available runway space with a fairly constant numberof larger planes.THE EMERGENCE OF TRAFFIC MANAGEMENT AND PRICINGMEASURES AS SUGGESTED SOLUTIONS TO AIRPORT CAPACITYPROBLEMSWhen governments around the world in the early-1970s failed to backmany of the airport and runway construction plans of their aviationauthorities, some of these authorities began investigating other 'nonconstruction' ways of addressing airport capacity and congestion problems.As mentioned earlier, the British airport authorities introduced a peakperiod pricing surcharge at London airports from the mid-1970s. InAustralia, the Commonwealth aviation authorities responded to theWhitlam government's decision to build a second airport at Galston insteadof a third runway at KSA by arguing that they could handle all aircraftmovements at KSA until 1990 without further runway construction ifcertain traffic management and pricing measures were introduced. Theseincluded the exclusion or limitation of access of certain small types ofaircraft, the abandonment of preferred noise-reducing runway utilisationpatterns and the introduction of peak-period pricing. These measures werefurther discussed in relation to the Sydney case during the late-1970s, butnot taken further. By the beginning of the 1980s, some professionaleconomists were starting to advocate such non-construction measures more10

strongly, particularly to cope with the proliferation of small plane runwayusers at KSA.7 This new pattern of runway utilisation at KSA was criticisedby these economists as an inefficient use of an expensive public facility,especially during peak hours of demand. The Sydney Morning Herald gaveconsiderable support to these traffic management and pricing ideas as waysof catering for Sydney's future airport needs. Indeed, in October 1982when the Fraser Coalition government announced that it was finally goingto proceed with the construction of a third runway at KSA, the Herald' seditors were surprisingly critical. They argued that such a runway was notnecessary and merely represented an increased public subsidy to an alreadyheavily-subsidised aviation industry. What was needed, they argued, was amore efficient traffic management and pricing system which wouldsomehow encourage a rationalisation of the recent proliferation of smallplane users at KSA, particularly during peak hours.8Such suggestions for an alternative non-construction approach toSydney's airport needs in the late-1970s and early-1980s did not meet withmuch acceptance either among the aviation industry or among theCommonwealth aviation authorities. Aviation and other interests incountry NSW saw such ideas as highly inequitable and totally unacceptable.They saw them as discriminating strongly against air travellers fromcountry NSW in favour of their overseas and interstate counterparts, andargued strongly that country travellers had as much right of access to KSAas did anyone else. The international and interstate sectors of the aviationindustry at KSA, while not so actively hostile to these traffic managementand pricing ideas, were happy enough with the status quo. These sectorswere not greatly increasing their own runway usage at KSA at the time anddid not, therefore, see competing smaller runway users as much of aproblem.78See Gordon Mills in Sydney Morning Herald, 11-13/2/1980, and Investment inAirport Capacity-A Critical Review of the Mans Study, Department of EconomicsUniversity of Sydney, Working Paper No 55. See also P.J. Forsyth 'AirportRunway Capacity in the Sydney Region: The Problems of Allocation andExpansion', in Christopher Findlay, et al., Changes in the Air? Issues in DomesticAviation Policy, Centre for Independent Studies, St Leonards, NSW, 1984.See Editorial in Sydney Morning Herald, 8/10/82 and Gittins in Sydney MorningHerald, 11/10/82.11

The federal aviation authorities were also unconvinced of the wisdomof these alternative non-constr

the Sydney business community and country NSW, as well as the Sydney City Council, the newly elected NSW State Coalition government and the federal Coalition opposition. Media commentary was generally in favour of a third ru