A return economy flight from Sydney to London in the first two weeks of July, during NSW school holidays, currently costs more than $5000 on Emirates or Qantas, with the cheapest flights costing at least $2500 via China.
There was also no evidence that people were abandoning travel for business purposes, Mr Culbert said. “People are completely over Zoom.” But the second time around, travellers may be “a little more careful” with their spending, he forecast.
“My expectation is that prices will come down. And that will also be a function of more capacity coming back into the market.”
Airlines are not yet offering the same capacity – measured by how many seats they sell to flyers – as they did before COVID-19.
Australia’s domestic capacity is running around “high 80 per cent”, while capacity on international flights in and out of the country is slightly lower, Mr Culbert said.
Capacity could increase if the federal government changes how landing and takeoff slots are allocated at the airport.
The government is considering changes to the slot system, with a review recommending it should be easier for new airline competitors such as Rex and Bonza to secure slots that have traditionally been taken by Qantas and Virgin.
The review showed the rules were “no longer fit for purpose” Mr Culbert said. The Australian Competition and Consumer Commission has said incumbent airlines have been able to exploit the system to hoard slots, with airlines cancelling flights shortly before scheduled departures if they don’t need them.
Sydney Airport’s total passenger numbers are still 13 per cent down on pre-pandemic days, based on the latest monthly data released for March, and it delivered a $943 million annual loss between October 2021 and December 2022.
While there has been an increase in the number of people flying in from India and the Philippines since the pandemic, visitors from China are down 60 per cent following its extended pandemic lockdowns.
Mr Culbert is keen to bring them back, and went to China two weeks after its borders opened in January, visiting six Chinese airlines in four cities. “I was intent on being the first airport in China as soon as it opened up.”
Four Chinese airlines continued flying in and out of Australia during the pandemic, mostly carrying freight and Chinese nationals back to China. That’s half the number that flew into Australia before the pandemic.
Seven Chinese airlines are forecast to be landing again in Sydney by the end of this month.
But some 50 airlines, more than ever before, are now flying to Sydney as new routes are added, including to Colombo in Sri Lanka and Bangalore in India.
India is still “underserved” with flights to and from Australia, but is expected to add more options after its national carrier, Air India, was acquired by the Tata Group last year, Mr Culbert said.
Tata said in March that it would order 250 Airbus aircraft to boost domestic and international flights, with the first aircraft to be delivered later this year.
Sydney Airport is also targeting more flights to South America and Africa, and is confident of a full recovery from the pandemic. The last COVID-19 testing clinic still operating at the airport will close on May 26.
Mr Culbert said the long delays experienced by travellers in getting through security screening last year had mostly been resolved, with 95 per cent of travellers clearing security in less than five minutes.
While security staff numbers are not quite back at 100 per cent, he claims processing times are faster than they were before the pandemic, partially because the airport is now more efficient.
The airport is sticking to its 2019 forecasts, which envisaged it would handle more than 65 million passengers by 2039, with Mr Culbert arguing that the opening of the new Western Sydney Airport in 2026 would not be a “zero sum game”.
The airport is spending $1 million a day on investment projects, such as creating more parking spaces for aircraft and raising the roof in the international terminal to add more luxury shops, but is carefully staging them given the high costs of construction.
Aeronautical agreements with airlines that expired during the pandemic are being renegotiated, and are “close to being done”.
The airport, which de-listed from the ASX last year after being acquired in a $23.6 billion deal led by Global Infrastructure Partners and IFM Investors (capitalising on a fall in its share price during the pandemic), has now been in private ownership for more than a year.
Mr Culbert said the new owners had been patient as the airport restored operations.
But under new ownership there is a big focus on sustainability, which the airport now considers a priority. It plans to invest in infrastructure to store and supply sustainable aviation fuel, which Mr Culbert says is a “real opportunity” for Australia, given it produces renewable materials like woody biomass and fats and oils (used to make sustainable fuels).
“We have to avoid a scenario like the gas industry where we exported all the gas and we became a price taker and a supply taker in the gas market,” he said.
The airport owns a jet fuel base, which includes storage tanks and pipelines, after buying the infrastructure in 2020. It wants to build new fuel lines that can supply both sustainable and traditional fuels.
Other projects include tearing down the 54-year-old P1 carpark at the domestic airport, which has been closed since November, and replacing it with as yet unspecified structures, though it will include improving connections between the two domestic terminals.
It will also upgrade 20 bathrooms over the next two years and create a “department store concept” at the domestic terminals that will be run by duty free operator Heinemann.
The airport has expanded into the telecoms business, setting up a stand in its international terminal selling data roaming packages, called “tripsim”, to travellers who want an alternative to the hefty charges levied by Australian carriers on international mobile roaming.
“It’s only been trading for two weeks, but it’s been really successful,” Mr Culbert said. “It just shows there’s an appetite for it.”
Outside the international terminal, new gardens have popped up with native plants and trees planted and managed by Indigenous not-for-profit group Wildflower. The airport wants people arriving in Australia to immediately experience the country’s bright light and open space.
“If the wind is blowing the right way you can actually smell the salt water coming over from Maroubra,” Mr Culbert said. “It’s about the connection to country.”