Sydney Airport profits up

Lower than expected car parking revenue was the only blemish in Sydney Airport’s half-year results released yesterday.

Lower than expected car parking revenue was the only blemish in Sydney Airport’s half-year results released yesterday, with a 4.1 per cent increase in after-tax profit to $174 million.

Other sectors of the business grew in line with market expectations, with aeronautical revenue up 7.6 per cent to $345m thanks largely to ongoing strength in passenger numbers, which reached 21.6 million for the six months to June.

Retail revenue grew 8.9 per cent to $177m, aided by the opening of 14 new stores in Terminal 2, and property, including income from car rental companies, swelled 10.9 per cent.

Sydney’s road traffic gridlock was blamed for a lacklustre 2.1 per cent increase in car parking and ground transport revenue to $78.6m.

In a note to investors, Macquarie Wealth Management said parking revenue “continued to suffer from the impact of traffic congestion, thus diversion to rail remains”.

The privately owned Airport Link Company that operates the domestic, international, Mascot and Green Square train stations said it was expecting to accommodate more than 26 million passengers in 2018, its biggest year to date.

Sydney Airport first-half 2018 revenue split ($m)

Macquarie also pointed out the 2.1 per cent growth in carpark revenue was below CPI and “$2m below our expectation”.

Sydney Airport CEO Geoff Culbert has previously spoken of his concerns about traffic congestion and suggested a solution was being planned.

While the market responded favourably, with Sydney Airport shares closing up 4 per cent at $7.50, aviation stakeholders were less impressed.

Board of Airline Representatives Australia executive director Barry Abrams said members continued to have concerns about the services they were getting at Sydney Airport.

“It’s really about are they getting what they believed they were promised under the agreements with the airport, and that’s an issue we will be discussing and putting forward in our submission to the Productivity Commission inquiry into airport charges,” Mr Abrams said.

Aircraft Owners and Pilots Association CEO Benjamin Morgan said big profits by Australia’s biggest airport underlined “why the general aviation industry was broken”.

“Once upon a time all these airports were federally owned, and profits trickled down to supporting all the small airports in the regions,” Mr Morgan said.

“… over the last 17 or 18 years since privatisation, (airport operators) have made billions and denied that money to regional airports.”