MA hopes A380 ups traffic at Sydney Airport
Apr. 20, 2006
Macquarie Airports is hoping the arrival later this year of the double-decker Airbus A380s and the emergence of longer-haul, low-cost carriers will help boost lacklustre growth in international traffic through Sydney Airport.
About 60 per cent of Jetstar International flights are due to go through Sydney, and chief executive Kerrie Mather said yesterday that there was also interest from Asia in Sydney Airport as a low-cost international destination.
Sydney Airport is spending $100 million to ensure it is ready for the A380 and says work on the project is due to be completed shortly.
Ms Mather believed this was an important medium-term opportunity.
"That's why we're so enthusiastic about the start of Jetstar services because that represents the start of what is effectively a new market and a new opportunity," she said.
The start of Jetstar International would coincide with the arrival of the first A380s at the end of the year.
Ms Mather's comments came as Southern Cross Airports Holdings announced unaudited earnings of $395.4 million for the nine months to March 31, up 5.9 per cent on the previous year.
Third-quarter earnings before interest, tax, depreciation and amortisation of $134.3 million were 3.7 per cent ahead of last year's.
Revenues for the nine months rose 6.7 per cent, compared with the previous period to $499.1 million, helped by a 3.6 per cent rise in aeronautical charges, to $203.8 million, and a retail revenue rise of 4.7 per cent, to $113 million.
Ms Mather said it was difficult to forecast what sort of traffic boost the A380s would provide for the airport because it depended on the number of seats.
But Sydney would get a significant share of the new planes with Singapore Airlines, Emirates and Qantas all planning to introduce them in the first 12 months and other carriers flying to the airport getting them in the medium term.
"At the moment, you've got an average of 375 seats on a 747," Ms Mather said. "(The A380s) have capacity for 550 seats but maybe they'll introduce 500 initially ... so it's a 25 per cent increase in capacity for every aircraft that's actually introduced."
Sydney Airport's operating costs grew 9.9 per cent to $103 million, mainly due to increased spending on security. Operating costs, other than security which is recoverable, were flat. Capital expenditure, driven by the A380 work and a new checked-bag screening system, rose 120 per cent to $174.5 million.
"It's a very solid result and I think, importantly, it does reflect continued improvement in the commercial businesses that we implemented at the start of year,' Ms Mather said.
The MAp chief also revealed there was stiff competition for the airport's duty-free franchise. Duty-free sales produce the bulk of retail income, making up 25 per cent of the airport's revenues.
Tenders close this week for the airport's duty-free franchise and Ms Mather said it had attracted a "large number" of responses.
"It's an important contract and it's attracted a lot of interest from the market, as you'd expect, because it's a very attractive retail opportunity."
A decision on the contract was still a few months away, she said.