From roads to the skies for Transurban’s Scott Charlton
It’s out of the frying pan and into the fire for the debonair CEO of Transurban Scott Charlton, who has been announced as the incoming boss of Sydney Airport.
It’s out of the frying pan and into the fire for the debonair CEO of Transurban Scott Charlton, who has just been announced as the incoming boss of Sydney Airport.
The 59-year old who – it could be argued is responsible for numbing Australians to the amount of tolls they pay on the nation’s key roads – is now taking on the tricky job of working for an airport frequently criticised for sky-high parking charges. It’s a whole-of-trip experience for sure.
As the gateway to Australia, Sydney Airport is one of the nation’s most important pieces of infrastructure and is the largest single infrastructure asset.
While parking charges may steal headlines, the airport has recently been a frontrunner on more significant issues, including calling out the government for restricting competition from Qatar Airways in a recent haphazardly explained decision.
Qatar – which has a codeshare with Virgin Australia – uses all 28 of the flights per week it is allowed by Canberra into major airports; whereas in the UAE where Emirates is the main player and has a profit-sharing deal with Qantas, only 84 of the 168 allowed flights are being used.
Sydney Airport outgoing CEO of Geoff Culbert on Tuesday told a Senate inquiry into bilateral air services agreements that this limitation for Qatar means “less choice for consumers and ultimately higher prices”.
Indeed prices are high. Some 50 per cent above pre-pandemic levels, online booking agency Kayak said back in June. In the higher-margin business cabins, where Qatar is considered best in class, the difference in airfares would be even more pronounced.
Soaring airfares and limited competition helped Qantas notch up a record full-year profit for 2023 of $2.47bn.
Mr Charlton’s skills at managing stakeholders across government, consumers and regulatory authorities at Transurban will certainly come to the fore at Sydney Airport, according to Will Riggall, chief investment officer of Clime Investment Management, who described his appointment as a “coup” for its investors.
“Scott has proven himself highly skilled in stakeholder management, which will be a key driver of the airport’s future success,” said Mr Riggall.
“In his time as CEO of Transurban, Scott leveraged his unique skills in managing large infrastructure projects and capital markets to deliver material value for shareholders. The capital deployed to network expansion and mergers and acquisitions not only delivered scale, but also saw the embedded value of the sprawling road network increase.”
During his 11 years at the reins he turned Transurban into the world’s biggest pure-play toll road company, knocking no less than Macquarie Bank-managed operators out of its way in the process.
Transurban now owns all the toll roads in Queensland, is the majority owner-operator in NSW, and owns two of the three in Victoria, with the state government in the process of building one more, and also has toll roads in North America.
Its shares have almost tripled in the time he’s been boss, on top of a steady stream of dividends.
Some of those shareholders will remain the same at his new job. Transurban and privately-owned Sydney Airport share investors such as AustralianSuper and UniSuper because they are attractive infrastructure assets with annuity-style dividends.
UniSuper chief investment officer John Pearce said he was happy with Mr Charlton’s move across to Sydney Airport. “Scott is a proven leader with an outstanding track record, he brings strong experience to the role and we’re very pleased with the appointment,” Mr Pearce said.
Whether he brings his M&A experience to the table remains to be seen. In Sydney there is a second airport being built but it is not due for completion until 2026.
Brisbane Airport is owned by a consortium that includes QIC and Schiphol, Melbourne Airport’s investors include the Future Fund, as does Perth Airport, which has an ownership structure that includes AustralianSuper.
At Sydney Airport there will be construction issues to consider. The P1 domestic car park, which spans 13,000 sq m and sits in a premium spot beside the terminals, has been condemned and will need to be rebuilt. Mr Charlton will effectively finish up at Transurban following the firm’s annual general meeting on October 19 and will start at Sydney Airport in December, in time for the peak Christmas period rush.
Customers of the airport will be hoping it’s learned from past mistakes after last year seeing queues of people snaking outside its doors, waiting to check in and clear security. This Christmas the numbers of travellers will no doubt be higher. Charlton will be coming on board as the airport hopes to see passenger numbers rise beyond pre-pandemic levels.
“The outlook for Sydney Airport looks set to only improve with a post-Covid travel boom underway and tourism and migration set to be a key pillar of the growth path,” said Mr Riggall.
Sydney Airport chair David Gonski wrote in a statement that Mr Charlton’s “strong commercial, operational and project delivery experience, along with a deep understanding of government and the regulatory environment” will help manage growth.
“The next few years will herald an exciting period of transformation in the aviation industry, as we grow beyond pre-Covid passenger numbers,” Mr Gonski said.
Mr Charlton said he was “excited and privileged” to be taking on the role. With Christmas just around the corner, the flying public will soon decide if it agrees with his excitement.
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