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Prime Minister Tony Abbott says Sydney's second major airport will be built in the city's west at Badgerys Creek. It is the right decision. We hope that the latest reiteration of this plan is unlike the many others that came before it, in that it actually leads to construction and, within a decade or so, a working airport.

Sydney is now home to more than 4.5 million people. It is a poorly planned city with a neglected and vastly inadequate transport system. Traffic congestion will soon cost the city $8 billion a year in lost productivity. Then there are the unmeasured social costs, such as family members who rarely see each other because they spend so many of their non-working hours behind a steering wheel. A second airport would disperse some of the congestion in the inner suburbs - especially freight trucks - and encourage more businesses to move west, where Sydneysiders increasingly live. Badgerys Creek will be no panacea for the city's transport woes, but it is necessary and should have happened years ago.

Politicians have ''announced'' a second airport on several occasions. However, the politics of this project have thwarted it for decades. Mr Abbott has the benefit of working with a Coalition government in NSW, but this issue has split party colleagues before. Many businesses will be pleased by the Badgerys Creek plan; other businesses and residents will inevitably oppose it. Some of the federal, state and local politicians with constituents in the area will court votes by trying to stymie the project. Mr Abbott's announcement will mean little until the detailed work is well under way.

Meanwhile, Canberra Airport's owners should not have been surprised by the decision; indeed, they welcomed it publicly as a crucial investment. Some hopeful voices had mooted the prospect of Sydney's second major airport being based in the ACT. There were a few small advantages in support of that idea: first, Canberra Airport already exists and could be expanded for far less money; second, the ACT's airport is already curfew-free and faces none of the political difficulties of implementing a 24-hour flight zone over populous western Sydney; and third, the distance between Canberra and Sydney could be made less inconvenient by a high-speed rail link. Nonetheless, such a rail link would likely take longer to build than an entire new airport, and associated infrastructure, at Badgerys Creek.

While Mr Abbott's decision may have been expected, it highlights concerns for the prospects of Canberra Airport. The airport and its surrounding business and retail park are in a valuable precinct made possible by the bold vision of Terry Snow and his family. Yet it is entering a potentially bleak phase of its history. The Gillard government's belated crackdown on public service travel began to bite three years ago and will worsen under the Abbott government, which promises even steeper cuts to public spending. Passenger numbers at the airport have fallen every month for 39 months. The airport's managing director, Stephen Byron, expects them to fall ''some more over the coming six to nine months'', but believes the government will then get ''back to doing business'' and allow public servants to travel again.

Yet Mr Byron's optimism is at odds with political reality. Cuts to the bureaucracy's travel spending are budgeted for years to come. It would be a brave government that undid these cuts; nor should they be undone. The Gillard government was right to target public servants' travel: it made little sense for staff to fly to Sydney for a short meeting, and it will make even less sense as videoconferencing technology improves. It was often noted that Canberra Airport seemed to have more travellers waiting in its exclusive lounges than in its main departure halls. This was a sign that a high proportion of those travellers - many of them government employees - were paying full-fee fares. It was always unlikely to last.

The airport faces a tough challenge as the city braces for further pain in the wake of Mr Abbott’s commission of audit. There is hope in the shape of international flights to Canberra, though it will take years for them to become the goldmine that some are suggesting.  Like the rest of Canberra’s private sector, the airport will need to continue to innovate if it is to  flourish in austere times.