Sydney Airport Holdings Pty Ltd (ASX: SYD) hailed the approval of the $2.6 billion Sydney Gateway government initiative as a "game changer" that could ease congestion around the airport and increase passenger volumes over time.
Sydney Gateway is an initiative to build a freeway from the West Connex motorway controlled by Transurban Group (ASX: TCL) through to both domestic and international terminals at the Sydney airport. The initiative is also expected to widen the Qantas Airways Limited (ASX: QAN) drive to three lanes in each direction.
Sydney airport CEO Geoff Culbert said, "Sydney Gateway is a game changer for reducing congestion around the airport. Widening Qantas Drive to three lanes in each direction will substantially improve the experience for people travelling to, from and past the airport. It is exciting to think that soon you will be able to drive from Parramatta to the airport and back without passing through a single traffic light".
Passenger growth has been taking off
I think the initiative will have some long-term benefits for Sydney Airport which has experienced steady growth in the number of both domestic and international travellers.
The company's latest traffic performance update for July shows that the 2018 year to date total number of passengers was up 3.2% with international passenger growth particularly strong at 5.2%.
In the short term however, the initiative will have a limited impact on Sydney airport and could even increase congestion due to the road works. That was reflected in Sydney Airport's share price which did not really react to the news and was down slightly by 0.14% at the time of writing.
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