Article: Brisbane Airport's new $1.3b runway delayed as airlines differ ...

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Brisbane Airport's new $1.3b runway delayed as airlines differ on who will fund it

Brisbane Airport's new $1.3b runway delayed as airlines differ on who will fund it

    by: Robyn Ironside
    From: The Courier-Mail
    July 06, 2012 12:00AM

THE new runway that could solve Brisbane's crowded skies has been delayed until 2020 as a row brews over who will pay for the $1.3 billion congestion buster.

Airlines are unhappy that they are expected to cover the entire cost but agreement on the financial arrangements is required by September 1 in order to commence preliminary work if it is to be built by 2020.

Although airlines agree the runway is needed - with the airport already experiencing congestion issues for evening flights - they are balking at the prospect of paying upfront for a runway eight years in advance.

The long construction period is due to the fact the runway is being built on swamp land that requires millions of tonnes of Moreton Bay sand as fill, which takes three years to settle.

Board of Airline Representatives of Australia executive director Warren Bennett said international airlines were concerned they were expected to spend a lot of money on a project that would provide no benefit for many years.

"Brisbane Airport Corporation is expecting the airlines to pay for the world's biggest sand pit," Mr Bennett said.

"They get no benefit and are facing a very high charge."

He said airlines worldwide had always objected to the pre-funding of capital projects.

"They're happy to pay for projects that are delivered in an agreed timeframe, but ... some of the airlines paying now might not be there in eight years time."

Mr Bennett said negotiations with BAC had been "very difficult". "There hasn't been much progress made in the last couple of months," he said.

"If we don't reach agreement (by September 1) it's difficult to say what the outcome will be. There are no guarantees."

Qantas has also confirmed its opposition to the funding arrangements, which would set a precedent for the industry.

The date for the new runway was put back to 2020 four years ago, because of "softening demand" for air travel as a result of the global financial crisis.

A BAC spokeswoman said they formed the view in 2010 that demand was recovering and construction would need to start this year.

"Discussions with airline partners, and indeed growing congestion, have confirmed that the runway is needed, so BAC is proceeding with the project," she said.

Brisbane Airport has one of the poorest on-time performance records for arriving flights, with nearly one in five planes (937) landing more than 15 minutes late in May.

The problem is only one airport runway is allowed to operate at night for safety reasons, which means planes are regularly forced into holding patterns for as long as 40 minutes.

The BAC and other stakeholders are exploring ways of maximising the efficiency of the existing infrastructure with the delays set to worsen as airport traffic increases.