The share price of Sydney Airport Holdings Ltd (ASX: SYD) has edged higher in morning trade in response to the release of the company's traffic figures for June. It was yet another month of growth for Australia's busiest airport leading to some impressive year-to-date figures.
In June domestic and international traffic grew 3.7% and 7.5%, respectively. This meant a total of 3,181,000 passengers, up 5% from 3,030,000 for June of 2015.
For the first half of the year total passengers through Sydney Airport's terminals grew 6.7% to 20,270,000, compared to 18,998,000 passengers for the first half of 2015. This growth was supported by a 9.3% increase in international traffic and a 5.3% increase in domestic traffic.
Management pointed to strong international passenger growth from China, the United States, Korea, India, and Japan as being partly to thank for the increase.
The good news is that these impressive figures are going to receive a little boost thanks to Hainan Airlines' announcement of a new service from Changsha in September and the resumption of its Xi'an-Sydney route. These twice-weekly services are expected to bring in an additional 33,000 Chinese visitors each year.
It won't just be Sydney Airport that benefits. Management estimates these visitors will contribute around $124 million in visitor expenditure each year. I believe accommodation provider Mantra Group Ltd (ASX: MTR), casino operator Star Entertainment Group Ltd (ASX: SGR), and ferry services company Sealink Travel Group Ltd (ASX: SLK) could all be positioned to profit from these visitors.
Whilst I think Sydney Airport is a great company to be invested in, at 53x trailing earnings it's definitely on the expensive side of the market. Investors might want to wait for a potential pullback before investing, or take a closer look at the shares above which may prove to be just as good investments.
