The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price will be on watch on Thursday following the release of its latest traffic figures.
How did Sydney Airport perform in November?
Sydney Airport didn’t have the strongest months in November.
After solid growth in September and October, the airport operator experienced a decline in domestic passengers passing through its gates in November.
A total of 2,377,000 domestic passengers used Sydney Airport in November, which was down 0.3% on the prior corresponding period. This brought its year to date domestic passenger numbers to a total of 25,189,000, which is a decline of 0.7% on the same period last year.
Although international passenger numbers continue to grow, the growth rate continues to moderate.
A total of 1,356,000 international passengers travelled through the airport in November. This was a 0.3% increase on the prior corresponding period. For the year, international passengers have grown 1.2% to date.
That small monthly increase was not able to offset the domestic passenger decline, leading to a 0.1% decline in total passenger numbers to 3,733,000 in November. This means that year to date Sydney Airport’s total passenger growth is now just 0.1% to 40,482,000.
What were the drivers?
Sydney Airport CEO Geoff Culbert explained: “International passenger growth has driven our overall traffic performance throughout 2019 and this trend continued in November.”
“The fastest growing foreign nationalities for the year to date are Indian (8.5%), American (7.8%) and Japanese (3.6%), representing a real mix of mature and emerging markets,” he added.
Mr Culbert blamed the decline in domestic passenger numbers on a reduction in seat capacity.
He said: “November’s domestic performance, down 0.3 percent on the prior corresponding period, was impacted by reduced domestic seat capacity.”
The chief executive appears optimistic that things will improve, especially given a new Qantas Airways Limited (ASX: QAN) route.
“Looking ahead to next year, QantasLink are opening a new route between Mildura and Sydney in the first quarter, which will add 30,000 seats annually, and they’re also bolstering their Bendigo-Sydney service with three new weekly return flights,” he added.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.