Sydney soars on budget flights

THE arrival of foreign budget airlines and increased patronage of car parks has helped Sydney Airport increase annual pre-tax earnings by 7 per cent.

THE arrival of foreign budget airlines and increased patronage of car parks has helped Sydney Airport increase annual pre-tax earnings by 7 per cent.

Australia's largest airport used its results announcement to call on the government to relax the cap on hourly aircraft movements, saying it would "dramatically" increase its ability to recover from disruptions.

With record numbers of passengers filing through its domestic and international terminals, Sydney Airport delivered pre-tax earnings of $848 million for the year to December, up from $790 million previously.

Revenue increased 7 per cent to $1.04 billion.

The entry of foreign budget airlines on routes to Sydney - Singapore's Scoot and Malaysia's AirAsia X - helped boost international passengers by 5.6 per cent.

Other international airlines put on an extra 40 flights a week last year, especially those flying from Asia, such as China Eastern.

The battle between Australian airlines has also helped spur traffic.

The number of domestic passengers rose by almost 6 per cent in the second half of last year, due largely to a significant increase in flights by Jetstar and to Tiger Airways basing four planes at the airport.

While budget passengers may not hang out in lounges, Sydney Airport's chief executive Kerrie Mather said they were more valuable to the airport than the high-flyers.

"They tend to arrive at the airport early," she said. "They don't have access to a lounge, so they have longer dwell times.

"That makes them very attractive from a passenger-mix perspective."

The growth in international passengers is also a boon for the airport because they are more than twice as valuable as domestic flyers: they stay longer and spend more in duty-free shops.

The airport's revenue from car parking rose by almost 9 per cent during the year, which it attributed to increase patronage, not a rise in parking fees.

It increased car spaces by 3300 last year and will add another 900 at the domestic terminals by the end of 2013.

As the vexed issue of a second airport flares, Ms Mather backed calls from the tourism industry for the cap on Sydney Airport of 80 aircraft movements an hour to be relaxed.

"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 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 Kingsford Smith.

The airport will pay a final dividend of 11¢ per security, taking the payout for the year to 21¢.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Join the Conversation...

There are comments posted so far.

If you'd like to join this conversation, please login or sign up here

Related Articles