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· Posted on
April 8, 2024

Sydney Airport says it's 'healed and come back stronger' from its tough pandemic days

Sydney Airport announced that earnings for the year ended December 2023 have more than doubled to $1.2 billion.

What's the key learning?

  • The growth in earnings puts the airport back on track with its strong performance in 2019 and 2018, before COVID.
  • Infrastructure assets like airports are considered valuable investments for several reasons
  • Often, airports operate as natural monopolies or oligopolies due to barriers including, regulatory hurdles, high capital requirements, and location suitability

👉 Background: Sydney airport, one of the world's longest running commercial airports, is owned by a consortium led by Australia's IFM Investors and US-based Global Infrastructure Partners.

👉 What happened: Last week, Sydney Airport announced that earnings for the year ended December 2023 have more than doubled to $1.2 billion. The revenue is made up of aeronautical fees, shop and car rentals, property leases, and parking fees.

👉 What else: The growth in earnings puts the airport back on track with its strong performance in 2019 and 2018, before COVID.

What's the key learning?

💡It’s not surprising to see infrastructure assets bounce back quickly post-pandemic.

💡Infrastructure assets like airports are considered valuable investments for several reasons:

  • Stable returns - they often provide predictable cash flows
  • Essential services - airports provide critical transportation services
  • Growth potential - with increasing urbanisation, demand for air travel continues to grow

💡Often, airports operate as natural monopolies or oligopolies due to barriers including, regulatory hurdles, high capital requirements, and location suitability. This can give airports significant pricing power and protection from competition.

‍

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