The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has been climbing higher in 2019 and has outperformed the S&P/ASX 200 Index (INDEXASX: XJO) by a significant margin.
The group's shares are up 35.79% since the start of the year, while the benchmark Aussie index has gained 22.64% in the same time.
But while 2019 has been a bumper year for the Aussie airport group, what's the outlook like for 2020?
Why the Sydney Airport share price can outperform in 2020
The big driver for Sydney Airport earnings comes from its passenger numbers.
Sydney Airport's half-year earnings were propped up by strong Aeronautical and Retail segment performance.
The Aussie airport's half-year revenue climbed 3.4% higher compared to FY18 and totalled $797.1 million in 1H 2019.
The company's earnings before interest, tax, depreciation and amortisation (EBITDA) climbed 4.1% higher to $649.2 million despite a 0.2% drop in passenger numbers to 21.6 million.
Sydney Airport reported 21.6 million total passengers for the half-year ended 30 June 2019 (1H19), down 0.2% on the prior corresponding period (pcp).
International passenger numbers climbed 1.9% higher for the Aussie airport, which helped to offset softer domestic passenger numbers.
Those passenger numbers are what I'd be keeping an eye on as we head into 2020.
Record-low interest rates from the Reserve Bank of Australia (RBA) could provide a good tailwind in 2020. The RBA has already slashed rates to 0.75% per annum but some pundits are tipping rates to go as low as 0.25% p.a. next year.
Lower rates should theoretically mean more financial relief and more spare cash to splash. That could be good news for Sydney Airport as the number of domestic travellers could climb higher.
Is 2020 the time to buy in?
The technical environment looks alright for Sydney Airport as we head into 2020. We're still seeing strong tourism from China internationally and domestic numbers look relatively stable.
The Sydney Airport share price could be at the right price if passenger numbers hold, with the current 4.32% dividend yield providing some income in the meantime.
