Sydney Airport has selected long-time director Trevor Gerber as the successor to outspoken chairman Max Moore-Wilton when he steps down next month, a role that will require him to quickly focus his attention on negotiations with the Abbott government over a second airport.
Mr Gerber, 59, takes the reins as the chairman of Australia's largest airport as discussions are set to heat up over plans for a second airport at Badgerys Creek, 50 kilometres west of the CBD. Sydney Airport has the so-called "first right of refusal" to build and operate the new airport in the western suburbs.
Mr Gerber joined the airport's board in May 2002 as an independent director, and has served as chairman of its audit and risk committee. He is also a director of Leighton Holdings, Tassal Group, Novion Property and Regis Healthcare.
Sydney Airport's share price has risen by 31 per cent over the last year as growth in international traffic – partly spurred by budget airlines – has boosted earnings. The stock closed down 5¢ at $5.35 on Friday.
Analysts expect Sydney Airport to exercise its right to build and operate the new airport.
Macquarie analyst Ian Myles said there was a lot at stake for Sydney Airport in the development of a second airport, and overseas experience had shown that it made sense for an existing operator to run another airport as an "effective network".
"I would be shocked if they didn't exercise their right to build this at an acceptable industry return," he said.
"The value proposition that Sydney Airport can give the government is probably better than what the government can achieve elsewhere."
Mr Gerber's other focus would be managing relationships with key stakeholders such as airlines.
"Stakeholder management is really important and I think Trevor has clearly got to manage that approach," Mr Myles said. "He has a good pedigree and background."
A formal consultation process between the federal government and Sydney Airport over a new airport in western Sydney ends on June 30.
If the ASX-listed airport wants to take part in the process, federal Transport Minister Warren Truss will issue a so-called "notice of intention" spelling out the government's terms for a new airport. Sydney Airport will then have at least four months to consider whether it wants to build and operate the airport.
A second airport would offer growth for the owners of Kingsford Smith over the longer term, as western Sydney's population is expected to rise from 2 million to 3 million over the next two decades.
Airport operators have warned it will be tough to convince airlines to fly into a new airport in western Sydney in the initial years.
However, an incentive to fly there will be the absence of a curfew at Badgerys Creek, unlike Sydney Airport, which has a night-time flight ban between 11pm and 6am, albeit with some exceptions.
RBC Capital Markets analyst Paul Mason said Mr Gerber's appointment was not a surprise given he had been on the airport's board for more than a decade and "probably knew the business better than anyone".
While the second airport would consume considerable time, Mr Mason said the new chairman would also have to turn his attention to negotiations with airlines over aeronautical charges for international flights.
The airport has been in talks for some time with the Board of Airline Representatives of Australia, which lobbies for foreign airlines, and Qantas and Virgin over new agreements which are expected to be for between five and seven years. The two Australian airlines are negotiating their international charges separately.
Mr Gerber declined requests to be interviewed on Friday but said in a statement that he looked "forward to working with the management team and leading Sydney Airport through its next phase of growth".
His appointment is subject to shareholders re-electing him as a director at the airport's annual meeting on May 14.
Mr Moore-Wilton, 72, a former secretary of the Department of Prime Minister and Cabinet under John Howard, has had a high public profile as the chairman of Sydney Airport for more than 12 years.
He revealed at the airport's full-year results briefing in February that he was stepping down as chairman in May.
He oversaw the airport's transition from federal government ownership to private hands.
In 2002, the Howard government sold a 99-year lease on Sydney Airport to a consortium led by Macquarie Bank for $5.6 billion. The banking group finally walked away from Sydney Airport in late 2013 after deciding to offload its cornerstone stake.
Mr Moore-Wilton also resigned as chairman of Southern Cross Media in February.
