Sydney Airport Lifts Earnings in Strong Market
By Steve Creedy, The Australian | Apr. 27, 2007
A recovery in international passenger numbers and sustained strong domestic traffic helped boost earnings at Sydney Airport by 12.5 per cent for the nine months to March 31.
Figures released on April 26 show earnings before interest, tax, depreciation and amortisation at Australia's biggest airport rose to AU$444.7 million from AU$395.4 million as passenger traffic grew by 6.4 per cent.
The figures reflect the strong aviation environment - passenger loads are above 80 per cent.
Airlines are reaping the benefit in some markets. The American Express Airfares index shows Australian domestic fares rose 6 per cent in 2006 while fares on flights to the Americas rose 9 per cent.
But the index also shows fares in other markets remained flat or fell.
Sydney Airport officials said total revenue growth of 9.1 per cent was well ahead of traffic increases and showed that continued investment in the business was boosting yields.
Chief executive Russell Balding said management was particularly pleased with the growth in domestic passengers through the redeveloped T2 terminal, serviced by Virgin Blue, Jetstar and regional carriers.
"Passenger numbers through T2 are up significantly on the previous corresponding period and this demonstrates the strategic importance of Sydney as Australia's major gateway and most high-profile tourist destination," Mr Balding said.
Total revenue from all business units fell just short of AU$545 million for the nine months with solid growth from all business units.
The strong airline environment translated into a 9.5 per cent growth in aeronautical revenue in the year to date to AU$223.2 million, and included the highest ever monthly number of international passengers travelling through the terminal.
The retail business, which included the opening of the AU$20 million T2 redevelopment in April, also outperformed passenger growth to jump 7.6 per cent to AU$127.4 million.
Other growth areas included revenue from commercial trading, which was up 9.3 per cent due to growth in parking volumes, and property revenue, which grew 10.5 per cent.
On the other side of the ledger, costs fell 0.5 per cent to AU$103.3 million.
This included a fall in total operating expenses, before security and one-off costs, of 3.7 per cent to AU$73.6 million.
Capital expenditure fell 32.7 per cent to AU$117.4 million and included upgrades to checked baggage screening, Airbus A380 developments, a new Qantas lounge and the T2 development.