The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price will be on watch this morning following the release of the airport operator's traffic update for the month of July.
How did Sydney Airport fare in July?
Sydney Airport experienced another soft month of traffic during July.
According to the release, a total of 3.85 million passengers passed through Sydney Airport's gates during the month. This was a decline of 1.2% on the prior corresponding period.
The airport saw both domestic and international passengers decline compared to July 2018. Domestic passenger numbers fell 0.7% to 2,388,000 and international passengers tumbled 2.2% to 1,459,000.
This means that calendar year to date, domestic passenger numbers are down 1.3% to 15,688,000 and international passengers are up 1.3% to 9,761,000.
Combined, total passengers in 2019 are now down 0.3% compared to the prior corresponding period to 25,449,000.
Sydney Airport's CEO, Geoff Culbert, explained: "The market continues to be subdued, but there are some exciting developments on the horizon. Both Qantas and LATAM Airlines have announced they will be increasing direct services to Santiago, which is really great news for the emerging South American market."
"In addition, we were delighted to welcome Malindo Air to Sydney Airport last week. Their service from Kuala Lumpur to Sydney via Bali further grows our Asian network and provides customers with more options on these popular routes," Mr Culbert added.
What were the drivers of this weakness?
The main drag on the company's performance during July was a sharp decline in passengers from China.
Passengers from China (and Hong Kong) fell 7.8% in July compared to the prior corresponding period, which could be down to a combination of trade war concerns and the protests in Hong Kong.
In addition to this, there was a 3.6% decline in Australian passengers and a 3.8% drop in visitors from the United Kingdom. The latter could be due to the negative impact that Brexit has had on British consumers.
