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Sydney Airport Continues to Grow

Sydney Airport Continues to Grow
Jul 20, 2015 By Ben Visser

Sydney Airport (ASX:SYD) has released an update on its traffic performance for June 2015 and year to date. For the month of June the airport saw an increase in total traffic of 2.1 per cent and year to date increase of 2.1 per cent, when compared to the previous corresponding period. Domestic traffic grew by 1.7 per cent and international traffic by 2.8 per cent, for both periods.

Sydney airport MD and CEO Kerrie Mather said: “We welcomed nearly 19 million passengers through Sydney Airport during the first half of 2015 and more than three million in June.” “It is fantastic to see Sydney again voted the number one city in the 20th annual USA Travel + Leisure 2015 World’s Best Awards.”

There were several factors contributing to the increase in total traffic. Average load factors improved in international markets by 2.2 percentage points and remained flat for domestic markets. Qantas announced additional frequency on their Sydney-Santiago route from four to five services weekly, adding 9,000 seats over the Australian summer holidays in response to high demand from travellers. China Southern announced an upgauge on its A380 service, adding approximately 79,000 seats on the Sydney-Guangzhou route. Air China upgauged its Sydney-Beijing route, adding 31,800 seats per annum. Korean air also announced an upgauge of its high season services adding 25,000 seats per annum.

Mr Mather said: “We are delighted that All Nippon Airways (ANA) will commence operations to Sydney on 11 December 2015. ANA will offer daily direct Tokyo Haneda-Sydney services on its Dreamliner aircraft. This new service which will add 157,000 seats annually is expected to boost tourism and visitor expenditure in Sydney and NSW and bring more than 35,000 additional Japanese visitors to Sydney.”

“We are pleased to see a number of capacity addition announcements this month from Qantas, China Southern, Air China, Korean Air and ANA. These announcements in total increase seat capacity by nearly 302,000 seats annually.”

Sydney Airport’s share price has experienced healthy growth for several years now. More recently growth has been spurred by solid financial results, consistent total traffic growth and attractive dividends. There was very little reaction to the traffic update this morning, largely because the increase in traffic was already factored into the price.

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Ben Visser Author: Ben Visser Jul 20, 2015

Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.

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