The announcement follows the recent release of a Code of Conduct by the Australian government which is designed to provide relief for commercial and retail tenants across the country during the crisis.
The airport said: “We note the Federal Government’s announcements in relation to commercial and retail tenants and the associated Code of Conduct. We will adhere to the Code of Conduct and all other relevant guidelines set by Government.
“We are working closely with all our retail partners to reach fair and equitable outcomes. Those discussions are currently ongoing, but we note that the Government’s Code of Conduct is helpful in progressing negotiations.”
Much like at Melbourne Airport, where traffic dropped 44% in March compared to the same month in 2019, total traffic in March dropped significantly in Sydney.
SIMILAR TRAFFIC REDUCTIONS EXPECTED
Passenger numbers decreased 45.1% to 2 million on the previous corresponding period in 2019. International traffic amounted to 700,000, down 47.9%, while domestic traffic reached 1.3 million, a 43.4% drop on the previous corresponding period.
Provisional data for the first 16 days of April indicates a 96.1% decrease in international passenger traffic and a 97.4% drop in domestic traffic versus the previous corresponding period.
“We expect to see similar reductions in traffic for so long as current restrictions on travel remain in place.
“The extent and duration of the downturn in traffic will continue to be dependent to a large extent on the measures taken by governments in response to Covid-19,” the airport commented.
In response to the Covid-19 crisis, the airport is implementing a range of operating cost initiatives. It is targeting at least a 35% reduction in operating costs for the next 12 months from 1 April 2020 (excluding security recoverable costs).
This will ensure the operating cost base reflects the lower level of activity, without compromising on the safe and secure airport operations.
The airport added: “As part of this process, we are working with our suppliers to sensibly reduce operating costs in a fair and reasonable manner.
“Considering the current circumstances, the directors of Sydney Airport Limited and The Trust Company have decided to reduce their fees by 20% for three months commencing 1 April 2020 until 30 June 2020. The fixed remuneration of the Chief Executive Officer will also be reduced by 20% over that same period.”
FOCUS ON ESSENTIAL PROJECTS
A modular capital investment programme and capital programme governance is also in place. Adjustments have been made to “rapidly defer, rescope and cancel a broad range of non-critical projects.”
The airport remarked: “At this time, we are targeting a capital investment range of $150-$200m for the next 12 months from 1 April 2020. Our focus will be on essential projects targeting safety, maintenance and asset resilience.
“In addition, we may consider a range of non-critical projects that would take advantage of the fact that the terminals, facilities and airfield are largely dormant. Any projects in this category would be pursued prudently and the overall capital investment target will be constantly reviewed and updated over the coming months as business conditions continue to unfold.”
Sydney Airport CEO, Geoff Culbert said: “The entire industry is hurting, but we are all in this together and we are working closely with our airline and commercial partners to make sure everyone has the best shot of making it through to the other side, while continuing to operate the airport as an essential service.
“We remain confident in the strength of our balance sheet and liquidity position, but we will continue to tightly manage liquidity and operating and capital expenditure to reflect the significant reduction in passenger traffic at the airport.”
Asia & Pacific,