After the unfortunate power outage at the airport represented by Sydney Airport Holdings Ltd (ASX: SYD) over a week ago, shareholders may be wondering if there are any surprises to come from the outage and its aftermath.
The costs of cancelled flights to carriers Virgin Australia Holdings Ltd (ASX: VAH) and Qantas Airways Limited (ASX: QAN) were likely only matched by passenger frustration with the event, with one particularly irate customer demanding to know why modern technology hasn't put an end to the inconvenience of a power outage.
In fact the opposite is true, because as technology becomes ever more pervasive; the inconvenience of an outage only increases. All the conveniences of automated check-in, air-conditioned terminals and electronically assisted aircraft control could only be dreamed of 60 years ago – ironically a time when a power outage would have very little impact on the flight schedule.
Travelling in 2014 is cheap, comfortable, efficient and safe, and the price is the risk of potential inconvenience in terms of a power outage. Sydney Airport does have a back-up power supply in the event of a disruption; however this was also taken offline by technical difficulties with the local substation. A third backup supply is a possibility, but would be an outrageous waste of money to cover the once-in-a-blue-moon event of primary and secondary power failures.
The good news however, is that Sydney Airport is not expected to suffer any serious costs from the outage, with no material changes to the company's capital expenditures outlined earlier this year. Power failure notwithstanding, Sydney Airport remains one of the best stocks on the ASX thanks to a number of competitive advantages and the quality of its management team.
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