Sydney Airport (Sydney Airport), Australia`s busiest airport, reported that total airport passenger traffic fell 0.2 percent in the six months to June 30, the first decline in a decade.
It is worth mentioning that in the past two years, Sydney airport passenger traffic has also achieved an average annual growth rate of 3.5%.
Sydney Airport said that the previous boom of China`s passenger traffic volume was flat in the year, and the decline in domestic passengers was the main influencing factors.
Passenger traffic at Sydney Airport fell first in ten years.
China is Australia`s largest source of overseas tourists. The number of Chinese passengers transported at Sydney airport rose 7 percent last year, but this year it has not been sustained.
The number of passengers in Australia fell 1.5 per cent, or 200000, to 1.3 million. The number of international tourists rose 1.9 percent to 8.3 million, down from 5.2 percent in the same period last year.
Sydney Airport Chief Executive Geoff Culbert said he wanted to open up new markets to maintain growth.
According to it, the decline in the number of domestic passengers is mainly due to Qantas and Virgin Airlines ticket price increases, capacity restrictions.
"domestic ticket prices have been rising," Culbert said. "by contrast, international flights are flat or slightly lower. Fierce competition for international flights is one of the reasons."
In the past year, 26.5 percent of Australians chose to spend their holidays abroad, double the 13.1 percent in the early 2000s, according to data released in July by Roy Morgan, a research firm.
Domestic airlines` capacity, measured by the number of seats available, has remained flat over the past year, according to data released by (Department of Infrastructure), Australia`s infrastructure department.
In fact, Sydney Airport has been adding more direct flights to South America, hoping that South America will become the next more popular tourist destination for Australians. Australian residents who choose to travel overseas account for 53% of the international passengers at Sydney Airport.
Nicholas Chapman, an analyst at the rating agency (Moody's), said the overall decline in passenger traffic was "controllable" given Sydney airport`s profit growth, cost control and sound financial management.
Tax disputes led to a 90 per cent drop in profits and 8 per cent layoffs
In the six months to June 30, 2019, net profit fell 90 percent to A $17.3 million in the first half of the fiscal year compared with a year earlier, due to a surge in Danish tax-related spending, according to Sydney Airport.
To cut costs, Sydney Airport announced layoffs of 8% and reduced capital spending.
Compensation for the tax dispute over the sale of shares in Copenhagen airport is expected to be 182 million, with net profit at Sydney airport falling as much as 90 percent to 17.3 million Australian dollars in the first half of the fiscal year from 173.2 million Australian dollars in the same period last year.
Most of Sydney airport`s main businesses, including aviation, retail and real estate, as well as car rental revenue, recorded growth, but parking and ground transportation revenue fell slightly, rising 3.4 percent to 797.1 million Australian dollars.
Sydney Airport announced an interim dividend of 19.5 Australian cents per share and confirmed that the annual dividend guidelines are 39 Australian cents per share.
Sydney airport has been laying off workers to cut costs. The number of executives reporting directly to CEO Culbert halved to five, according to the report. The number of core employees (450 ≤ 500) will be reduced by 8%.
Culbert said the changes are aimed at reducing organizational complexity and bureaucracy and helping to make decisions more quickly.
The cost of restructuring and layoffs in the first half of the year was 2.4 million Australian dollars. In addition, the airport plans to reduce capital expenditure for the whole of 2019 from 3.9-440 million Australian dollars to 3-350 million Australian dollars.
