http://www.news.com.au/common/story_...5E1702,00.html
Virgin, Sydney Airport deal
06Nov02
SYDNEY Airport Corporation and discount airline Virgin Blue have reached an agreement which would allow Virgin's passengers to use the former Ansett terminals from early December.
Under the deal over access to Terminal 2 (T2), Virgin Blue would take six gates on a priority basis, with access to up to another six common use gates. Virgin Blue said it guaranteed to have 4 million passengers pass through the terminal in the first 12 months, and 4.5 million each year thereafter.
As part of the agreement Virgin Blue had undertaken to withdraw any litigation against Sydney Airport regarding access to the terminal.
Sir Richard Branson's Virgin Blue had lodged documents in the NSW Supreme Court in August alleging Sydney Airports Corporation Ltd (SACL) has reneged on a hand-shake agreement on the use of the terminal.
The agreement was said to have taken place before the airport was sold to a Macquarie Bank-led consortium in June.
However, SACL said no such deal had been struck between the airline and the airport.
It said Sir Richard's claims were unsubstantiated and that meeting between the Virgin boss and SACL chief executive Tony Stuart were "nothing more than an informal courtesy call".
Sir Richard previously said the airport wanted "nearly triple" the $17-$18 million the airline was prepared to pay for the terminal space, costs that would have to be passed onto customers.
Mr Stuart said the agreement with Virgin Blue meant between six and seven million passengers would now be able to take advantage of the T2 facility.
"This agreement is a sound commercial outcome for Sydney Airport and its shareholders," Mr Stuart said.
"T2 will now become more efficient through a better utilisation of space capacity.
"The agreement will result in an increase in revenue for the airport without any additional material cost or capex requirement, plus the capacity to grow the domestic market even further."
The completion of the agreement meant five airlines would now be using T2, with SACL planning an upgrade in retail and catering facilities at the terminal, he said.
SACL took ownership of T2 on July 1, 2002, and following the completion of this deal a total of 13 out of 18 gates would have been assigned.
The additional five gates were available for either increased capacity for growth of the existing domestic airlines or a prospective third entrant, SACL said.
SACL said it was planning other revenue generating opportunities for the domestic express terminal.
Macquarie Airports managing director Kerrie Mather said following the completion of this agreement total full-year revenue for T2 was estimated at $50 million on an annualised basis from the commencement of Virgin Blue's operations in the terminal.
The combination of the new revenue sources from T2 for 2003 and other initiatives was providing confidence in Macquarie Airport's forecast earnings before interest, tax, deprecation and amortisation (EBITA) for SACL of $377.4 million for 2002/03.