The Sydney Airport Holdings Pty Ltd (ASX: SYD) earnings for the first half of 2021 were released last week. Within them were several insights that could affect the shares of its ASX travel peer Flight Centre Travel Group Ltd (ASX: FLT).
Right now, Flight Centre shares are trading for $13.74 apiece. The travel agency group is expected to report its earnings for financial year 2021 on Thursday.
Let's take a look at what Sydney Airport's half-year results might mean for Flight Centre shares.
What can Flight Centre investors take from Sydney Airport's results?
Flight Centre shares will be in the spotlight on Thursday as the market anticipates the release of the company's FY21 earnings.
While we wait, let's take a look at the earnings of what is normally Australia's most traversed airport to see if they provide any insight on the travel industry's woes.
Sydney Airport's earnings included some dire figures. Here's a snapshot of what the airport reported:
- An 81.7% greater net loss after tax benefit than it recorded in the first half of 2020
- A 36% drop in aeronautical revenue
- 6 million travellers passed through the airport – 36.4% fewer than the previous corresponding period (pcp)
- Sydney Airport saw 91% fewer international passengers than the pcp
As you can see, international travel into and out of Australia's biggest airport dropped notably in the first half of 2021 compared to the pcp. Of course, Australia's international borders slammed shut in the middle of the first half of 2020.
However, Flight Centre shares might be safer than that figure makes them seem. Sydney Airport reported it only saw a 3.1% drop in domestic travel for the 6 months ended 30 June.
Additionally, Sydney Airport CEO Geoff Culbert said domestic traffic rebounded well each time Australia's domestic borders reopened. Further, before New Zealand shut its borders to Australia again, trans-Tasman traffic recovered to more than 40% of its pre-COVID levels.
This seems to suggest many Australians (and New Zealanders) were travelling however they could during the first half of 2021.
All eyes will be on Flight Centre – and its shares – on Thursday. The market will likely be waiting to see if the travel agent experienced the same strong domestic travel sector throughout FY21.
