Sydney Airport's estimates of its capacity over the next 20 years are too optimistic and will not negate the need for a second airport to be in operation by 2033, the Deputy Prime Minister says.
Warren Truss, who is also the Infrastructure and Regional Development Minister, approved on Monday night Sydney Airport's latest master plan, which calls for combining domestic and international operations at shared terminals and improved ground transport.
Sydney Airport said it welcomed approval of the 20-year master plan, which would meet the forecast demand of 74 million passengers in 2033, up from 38 million last year.
But Mr Truss said he disagreed with the projections by Sydney Airport which indicated there was no need for a second airport by 2033.
''I think it will have to be operational before then,'' he said.
Mr Truss said he expected a decision on the site for a second Sydney airport would be made this year, with Badgerys Creek the preferred option.
He said Sydney Airport's capacity projections depended on there being a significant migration to larger aircraft over time, meaning fewer movements could carry a larger volume of people.
''I think their estimates are optimistic,'' he said. ''There are no signs the airlines have the orders in for aircraft to deliver on the prediction. Within a couple of years there will be slots in the day that will be fully occupied.''
Mr Truss indicated he might be open to removing 15 minute rolling periods in which 80 movements an hour at Sydney Airport are counted to help free up capacity. ''Because it is divided into quarter hour slots it is not possible to achieve 80 movements per hour,'' he said. ''Certainly that is an issue we can talk about.''
Opposition Leader Bill Shorten has called for a curfew to be imposed at any new airport, but Mr Truss said he did not think that would be needed because newer aircraft are quieter.
A limited number of quieter aircraft are already allowed to land at Kingsford-Smith after the curfew, and Mr Truss expects to update that list after consultation with the community.
''The time may well come maybe even by the time a second airport is built in Sydney when most of the fleet will be as quiet as the ones in Sydney that land after dark,'' he said.
The approval of the Sydney Airport master plan clears the way for the airport and Virgin Australia Holdings to resume stalled talks over the plan to combine domestic and international operations at shared terminals.
Virgin has protested against an initial plan for its domestic and international operations to be moved to Terminal 1, the current international terminal which is further from the CBD than Terminals 2 and 3.
The airport had told the airline there would be room in the current domestic precinct for Qantas and Emirates along with Virgin and one of its alliance partners.
But Virgin, whose partners include Air New Zealand, Singapore Airlines, Etihad Airways and Delta Air Lines, believes that plan would place it at a disadvantage to Qantas.
A spokeswoman for Virgin said the airline supported the expansion of infrastructure but said it should be done in a cost-effective way that did not provide a competitive advantage to one airline group. A Qantas spokesman said his airline continued to work closely with Sydney Airport on the plan to combine the terminals.
Mr Truss said Sydney Airport would likely have to seek further federal approvals for combining the terminals because it has not yet provided specific details of the plan.