The vision of creating one of the Asia-Pacific region's best airports - with 45 aerobridges and costing just $1 billion - has become a major challenge for Perth Airport.
The vision of creating one of the Asia-Pacific region's best airports - with 45 aerobridges and costing just $1 billion - has become a major challenge for Perth Airport.
Over the past three weeks, airport chief executive Brad Geatches has told Business Class that only 25 aerobridges will be delivered in the planned $1 billion redevelopment, and that "IATA (International Air Transport Association) Level of Service Standard C is likely to be the underlying design criteria".
IATA rates a class-C airport as minimum standard, according to a report by Dr Richard de Neufville, professor of systems engineering and civil and environmental engineering at the Massachusetts Institute of Technology, with a good level of service and acceptable delays.
The class-C airport is in stark contrast to Perth Airport's May 1 media release that accompanied the "Vision for the future" plan, which claimed that the phased redevelopment would "transform Perth Airport into one of the best airports in the Asia Pacific region".
Most major airports in Asia, such as Hong Kong and Singapore, are rated as A or B. However those airports are government owned and many are palaces that travellers would never pay for if the true cost was passed on.
This is the challenge for Perth Airport - balancing public expectation and the commercial reality of what airlines can pass on to the flying public in today's economic environment.
The Perth Airport redevelopment vision was released four weeks after Premier Alan Carpenter described Perth's domestic airport as an embarrassment to the state and called for an immediate upgrade.
Mr Carpenter told ABC Radio that he didn't, ''want to stand in queues with people who are embarrassed if they are Western Australians or very, very unhappy if they are visitors coming to WA and seeing Perth Airport and thinking that somehow or other that reflects upon the state broadly."
At the time, Mr Geatches said "there was no lack of commitment" and "no lack of preparedness to invest".
But a standard C airport has queues, and lots of them, although not as bad as the current Qantas domestic terminal, which is rated as standard E or "unacceptable" at peak times.
Last Thursday, Mr Carpenter told Business Class he expected the redevelopment of Perth Airport to result in a highly efficient and modern facility that would overcome the current delays and problems.
For the redevelopment of Perth Airport to be highly efficient it would need to be built to standard B, which has a high level of service, very few delays and high comfort, according to Dr de Neufville's report.
Airport spokesman Malcolm Bradshaw, responding to reports on wabusinessnews.com.au last week, said standard C would apply when the terminal reached its design capacity, and that it would operate at a higher standard in the intervening years.
He added that 25 aerobridges was more than double the current number, and claimed "that is the level expected to meet demand".
The cost blow-out and downgrade of the airport's standards comes as some question whether airports - critical to a country's economic infrastructure - should be in private hands.
A Singapore-based airport consultant, who declined to be named, claimed recent airport redevelopment cost blow-outs raise this issue in the context of shareholders' interests versus the country's economic interests.
"Quite simply, they are far too important for economic development to be in the hands of private enterprise," the consultant said.
Perth Airport is operated by Westralia Airports Corporation Pty Ltd, which is a wholly owned subsidiary of Airstralia Development Group Pty Ltd, which includes Utilities Trust of Australia, Australian Infrastructure Fund, Perth Airport Property Fund and AAH C3 Pty Ltd among its stakeholders.
Hastings Fund Management Limited, which is a subsidiary of Westpac Banking Corporation, administers 75 per cent of the equity investment in ADG.
Shareholder interests at Auckland Airport have led to a doubling in the valuation of that airport to reflect what the site would be worth for total commercial redevelopment, with landing charges increased accordingly.
A redevelopment of Perth Airport will very much depend on what airlines are prepared to pay and introduces a major conflict, with some successful airlines prepared to pay a great deal more than others for world-class facilities.
Overseas experience suggests that the cost of building airport terminals is climbing significantly to meet growing passenger demands.
Singapore Airport recently completed its 380,000 square metre T3 with 28 aerobridges at a cost of $S1.75 billion ($A1.34 billion) with labour costs at least 30 per cent less than Australia's.
The new T3 complex at Dubai, to be opened in October, cost $4.5 billion, although that included a major cargo terminal. Labour costs in Dubai are 70 per cent less than those in Perth.
The redevelopment of Perth Airport involves the relocation of the domestic terminals to the eastern side of the airport at the site of what will be an expanded and modified international terminal.
Phase 1, however, which started late last month to be completed over two years, will be a new and separate terminal dedicated to internal WA air services -Terminal WA - and some interstate flights.
Phases 2 and 3 will deliver new international and domestic terminal facilities based around the existing international terminal within five to seven years.
The initial work in Phase 1 over 12 months involves building a $20 million apron covering 26 hectares for 36 aircraft, but with no aerobridges and thus no real improvement over existing regional aircraft facilities.
Perth Airport has started discussions with airlines on the future functionality and commercial arrangements that will underpin Terminal WA, which will be developed as a separate project from the apron.
The redevelopment is being fast tracked to cater for WA's booming economy, with a record 9 million passengers in the 2007-08 financial year.
The total of 9.16 million passengers in 2007-08 represents an increase of 13.3 per cent on the 2006-07 figure of 8.1 million passengers.
Passenger traffic has more than doubled since 2001-02, while airfield movements associated with the resources sector have doubled since 2005.
During the past five years, domestic passenger movements at Perth Airport have increased by more than 85 per cent, and in 2007 Perth Airport achieved its passenger traffic forecasts for 2016.
Perth Airport is working with the WA government on a range of planning issues, including airport road and public transport links, which are expected to include a rail link.
In the interim, Perth Airport is currently building a new public access road to shorten the distance - 11 kilometres - between the domestic terminal on the western side and the international terminal on the eastern side.
That work is to be completed within 18 months.
Mr Geatches told Business Class concept designs were still being developed for the new domestic and international terminal facilities, but it was likely that these would include a major redevelopment of the existing international terminal and the construction of new terminal space.
"It is possible that the existing international terminal building structure could form the basis of new domestic terminal facilities," he said.
The current international terminal, built in the 1980s, is quite unsuitable for today's international travel with its confused multi-level boarding process and would require significant redesign even to be converted to a domestic terminal.
