Budget airlines boost Sydney Airport earnings
THE arrival of foreign budget airlines and increased patronage of car parks has helped Sydney Airport to increase annual pre-tax earnings by 7 per cent.
Australia's largest airport used its results to call on the government to relax the cap on hourly aircraft movements, pointing out that it would "dramatically" increase its ability to recover from disruptions.
With record numbers of passengers filing through its domestic and international terminals, Sydney Airport was able to deliver pre-tax earnings of $848 million for the year to December, up from $790 million a year earlier. Revenue rose 7 per cent to $1.04 billion.
The entry of foreign budget airlines - Singapore's Scoot and Malaysia's AirAsia X - helped to increase international passenger numbers by 5.6 per cent. Other international airlines also put on an extra 40 flights a week last year, especially those flying from Asia such as China Eastern.
The battle between domestic airlines has also helped spur traffic. The number of internal passengers rose by almost 6 per cent in the second half of last year, due largely to a significant rise in flights by Jetstar and Tiger Airways basing four planes at Sydney Airport.
The airport's chief executive, Kerrie Mather, said budget airline passengers were more valuable to the airport in terms of earnings than the high-flyers. "They tend to arrive at the airport early. They don't have access to a lounge so they have longer dwell times," she said. "That makes them very attractive from a passenger mix perspective."
The growth in international passenger numbers is also a boon because they are more than twice as valuable as domestic flyers by staying longer at the airport and spending more in duty-free shops.
The revenue from car parking rose by almost 9 per cent for the year, which the airport attributed to increased patronage - not a rise in fees. It added 3300 car spaces last year and will add another 900 at the domestic terminals this year.
As the vexed issue of a second airport flares, Ms Mather backed calls from the tourism industry for the relaxation of the cap of 80 aircraft movements an hour at Sydney Airport. "By allowing more flights per hour in the peak hours without us even increasing the number of flights per year, the ability of the airport to recover from disruption would be dramatically increased," she said.
Ms Mather's pay package for the year rose slightly to $3.5 million.
On a statutory basis, the airport reported a net profit of $179 million, 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.
The airport will pay a final dividend of 11¢ a security, taking the payout for the year to 21¢.