Business Case for the SunShine CoaSt airport Master Plan

Executive Summary
The types of economic benefits generated by the Runway and the wider Master Plan projects
include:
• Passenger time travel savings and reduced airline costs from a decrease in flight
diversions (due to the larger, better orientated runway), including direct in-bound and
flow-on out-bound impacts,
• Avoided travel time as a result of the addition of new routes,
• Avoided adverse health impacts and higher property values from a reduced number of
residential properties within the ANEF zone,
• Positive safety impacts from a change to the location of the safety zone, in particular the
reduction in the number of residential properties within the zone,
• Environmental impacts from a reduction in road traffic to/from Brisbane airport as the
closest alternative port (however this is entirely off-set by an increase in emissions from
a higher number of aircraft movements at the airport) ,
• Additional value for retail and other operations within the airport area and a significant
increase in value for regional businesses outside the airport area, due to spending by
additional visitors to the Sunshine Coast area, and
• Additional monetary benefits for the airport from increases in revenues from existing and
new passengers.
The magnitude and range of expected benefits is sensitive to variations in key assumptions
such as the impact of transfer and substitution effects, the timing and cost of projects, the rate
of uptake of the new capability of the runway and commercial precincts, and the discount rate
applied.
Where possible, our analysis applies conservative assumptions in relation to broader
economic effects, including the complete exclusion of multiplier effects and the inclusion of
transfer assumptions and ‘value-added’ factors where appropriate. In all scenarios, where the
key expected economic benefits/costs are included in the analysis, the Benefit Cost Ratio
(BCR) is greater than 1, indicating that there is value in the project which is not reflected in a
purely financial/commercial analysis.
Based on a central demand scenario, with all runway/RPT projects included and all new
commercial precincts the key economic indicators are:
Economic indicators
Value
Benefit Cost Ratio (BCR) 3.52
NPV Net Benefits $645m
IRR (Economic benefits) 17.72%
These indicators include a mid-point estimate within the range of possible substitution/transfer
impacts (25%-75%). By including a substitution impact, economic benefits which are
transferred to the Sunshine Coast region from other possible Australian destinations (e.g. Gold
Coast, Brisbane etc) are effectively removed from the analysis - only benefits which stem from
‘induced’ demand are included (i.e. demand which is truly new within the Australian economy).
If benefits were to be considered from a State or regional perspective, the range of net benefits
would be higher than reported in the table above. For example, removing the transfer impact
completely, results in an increase in the BCR from 3.52 to 6.24.
Sunshine Coast Airport
PricewaterhouseCoopers 3