The Sydney Airport Limited (ASX: SYD) share price has come under pressure this morning, down 3% in early trade, after the company posted weak domestic and total passenger numbers in its February 2019 Traffic Performance update.
What did Sydney Airport report this morning?
The airport's Domestic passenger numbers fell by 2.7% year-on-year (YoY) to 2.08 million in February 2019 which was also down 1.3% on a year-to-date (YTD) basis versus 2018 to 4.37 million passengers. This was largely due to reduced domestic seat capacity (-1.9%) and lower load factors (-0.7%) while cancellation rates have remained higher than usual.
The news was brighter for the airport's International traffic, which saw 0.4% YoY and 2.9% YTD growth to 1.32 million and 2.99 million, respectively.
Sydney Airport continues to see double-digit passenger growth from a number of Asian markets including South Korea (18.7%) and India (11.9%) in February. The airport also saw notable declines across international travellers from China (-4.6%), the United Kingdom (-6.3%) and Canada (-2.4%) during the month.
This international passenger growth was also notably impacted by Chinese New Year (CNY) falling on February 5 which boosted January numbers but also made YoY comparisons less insightful. Management expects this backwards shift in the traditional holiday to be reflected in lower March 2019 numbers, given CNY period usually extends into March.
However, the stronger international numbers still saw total passenger numbers fall by 1.5% YoY to 3.40 million while YTD numbers were 0.3% higher at 7.36 million.
Is the Sydney Airport share price a buy at $7.15 per share?
The Sydney Airport has surprised many in recent years as it has ridden a lower Aussie dollar and increased traffic from China to soar 77% in the last 5 years and a tidy 10.8% in this year alone.
However, I think the headwinds are building for international travel and the airport as a whole, and it remains susceptible to slowing economic growth and particularly economic conditions across Asia.
For those looking for growth, I think these top growth shares should be considered before Sydney Airport, but the 5.09% dividend yield offered by the airport could provide handy income for those positioning their portfolios for more yield in 2019.
