Sydney Airport’s total first half year revenue grew by +4.6% to A$594.7m ($437.9m), with retail revenue up +3.9% to A$129.9m ($95.m) over the period.

 

Airport management said the airport’s duty free operator Gebr. Heinemann has been ‘trading well’ during its transition phase and the construction is progressing on time and budget with new stores expected to open in phases until mid-2016.

 

This comes at the same time that Sydney Airport Managing Director and CEO Kerrie Mather has reported strong traffic for the month of July, growing by 6% compared to the same month in 2014.

 

“July’s international result was driven by higher average load factors (2.8 percentage points) and capacity increases. Inbound nationalities were 9.1% higher due primarily to growth from Chinese (+13.3%), Indonesian (+34.6%), Indian (15.2%) and US (12.8%) nationals. Australian outbound grew 3.3% as a result of school holidays and increased seat supply, particularly to the USA, UAE, Philippines and Singapore.”

 

 

By contrast she pointed to a 4% increase for the airport’s domestic passengers in July, thanks to a 1.9% increase in seat capacity and 1.6 percentage point improvement in load factors. Both the Qantas and Virgin groups added seats compared to the previous corresponding period.

 

This positive news comes at the same time that Heinemann’s Executive Director Raoul Spanger told TRBusiness in a completely separate interview recently that ‘everything’ has gone well during the first weeks after taking over the Sydney Airport duty free operation, although he concedes that the retailer might have missed out a little in the ‘intermittent stage’ where it is operating counters as it waits for its shop-in-shop solutions.

 

“This is, of course, costing us money in luxury products, but the rest of the turnover is fine and what is even better is we are completely on schedule with the refurbishment.

 

“This means that by the planned middle of September we will move the core categories of perfume, cosmetics and liquor and tobacco into the final premises. Then later we will have the regional area and electronics and then early next year the boutique area.

 

 

“The refurbishment programme should be on time by the end of January next year. This means that overall it will have taken us one year to refurbish everything, although not refurbishing as we know it – but a completely new layout of the whole terminal.”

 

An added bonus and good timing for Heinemann at Sydney is the increasing number of Chinese travellers visiting this market. This good fortune is also continuing with today’s announcement by Kerrie Mather that there are even more Chinese flights in the pipeline: “We were delighted this month to announce two new airlines commencing services to Sydney, Xiamen Airlines and Indonesia AirAsiaX. Xiamen Airlines will commence direct services in late 2015 to two new mainland Chinese cities, Fuzhou and Xiamen.

 

“Both routes will be operated by the new generation Boeing 787-8 Dreamliner aircraft. These services will expand our footprint into China and are expected to bring extra 36,000 Chinese visitors and increase NSW annual visitor expenditure by A$134m ($98.5m).

“Indonesia AirAsiaX will be the fifth long haul low cost carrier serving Sydney, making Sydney Airport the world’s leading long haul low-cost carrier airport. The five-weekly Sydney-Denpasar service will commence on 17 October. It will be operated by an Airbus A330-300 aircraft, increasing seats by nearly 200,000 per annum.

 

 

“Indonesia Air Asia X also provides a welcome boost in low cost capacity servicing rapidly growing Asian markets, with considerable inbound potential for Sydney and Australia”, she said.

 

Chinese nationals were once again Sydney’s fastest growing market, up some 16.8% on a year-to-date basis. Growth in Chinese travellers through Sydney Airport has accounted for 60% of foreign nationality growth. By contrast, Australian nationality travellers – the largest market at approximately half of all international travellers – grew by 2.1%.

 

In summary of its results announcement, Sydney CEO Mather said the HY1 performance was another strong result due to the continued growth of international passengers, in addition to investment driving yield expansion across all businesses.

 

Mather also pointed to a ‘pleasing international result’ in terms of strong passenger demand from China, Australia, India, the Philippines and the USA.

 

 

Amongst the strategic objectives completed in the period, she points to new international aeronautical agreements, plus a potentially lucrative transaction with Qantas to take control of Sydney Airport Terminal 3. Interestingly, Mather said that the fixed property rental previously received from Qantas will now cease and new variable aeronautical, retail and property revenue streams will commence on transition.

 

The terminal boasts 17 gates, over 51 commercial outlets, three lounges, 120 valet car parking spaces and 24,000sq m of office space, providing Sydney Airport with multiple revenue streams.