Budget airlines boost Sydney Airport profit
Sydney Airport has posted a 7 per cent rise in annual pre-tax earnings as it benefited from budget airlines boosting the number of international passengers passing through its terminals.
Australia’s largest airport reported a 3.6 per cent rise in the total number of passengers during the year to almost 37 million. The entry of foreign budget airlines on routes to Sydney – such as Singapore’s Scoot and Malaysia’s AirAsia X – helped to boost its international passengers by 5.6 per cent.
Shares were up 0.8 per cent to $3.165.
The airport also pointed out that other international airlines had boosted capacity on flights to Australia, especially to and from countries in Asia including China and Malaysia.
The number of domestic passengers rose by almost 6 per cent in the second half of last year, due largely to a significant boost in flights by Jetstar, and Tiger Airways basing four planes at Sydney Airport.
In a sign of the aggressive competition between this country’s airlines, Jetstar increased its capacity on the country’s busiest route between Sydney and Melbourne by 57 per cent in the second half.
Using its preferred financial metric, Sydney Airport reported pre-tax earnings of $848 million for the year to December, up from $790 million previously. Revenue rose 7 per cent to $1.04 billion.
It reported a statutory net profit of $179 million for the year, compared with a loss of $240 million in 2011 when its bottom line was weighed down by an asset swap involving the transfer of stakes in Copenhagen and Brussels airports in return for a larger slice of Sydney Airport.
The airport’s revenue from retail rose by 5.3 per cent for the year, helped by the growth in international travellers. International passengers are more than twice as valuable to airports as domestic passengers because they stay longer and spend more in duty-free shops.
It did not give specific earnings guidance for the new financial year but pointed out that international passenger growth had been strong in the first two months.
The airport will pay a final interim distribution of 11 cents per security, which takes the payout for the year to 21 cents.