Sydney Airport says that stimulating air services agreements is the key to unlocking the demand



An aerial view of Sydney airport. (Sydney Airport)

An aerial view of Sydney airport. (Sydney Airport)

Geoff Culbert, CEO of Sydney Airport, said that further liberalization of Australian air services agreements would help to unlock new passenger flows and stimulate air travel.

On the company's results presentation for the first half of the 2018 calendar on Wednesday, Culbert cited the example of Nepal, which he said was the third largest source of foreign students after China and India.

Furthermore, Kathmandu is currently the largest unmanned market in Sydney worldwide, with 93,000 people traveling to Sydney every year from and to the capital.

"But they fly somewhere else," Culbert said.

"This means that we can immediately fill in a service of five days a week.With the stimulating effect of a direct flight, we would expect that a daily service between Kathmandu and Sydney would not be a problem."

Culbert said that Nepal Airlines had shown interest in coming from Kathmandu to Australia non-stop and that Airbus A330-200s had aircraft in the fleet for the route. (Sydney-Kathmandu is 5.253 nm).

However, there is currently no air services agreement between Australia and Nepal.

"We are working on it and it is a good example of the work we are doing to expand the core in our aviation activities," Culbert said.

At present, the markets of Fiji, Hong Kong and Qatar are limited in terms of capacity from and to the four major Australian gateway offices of Brisbane, Melbourne, Perth and Sydney in the framework of existing air services agreements with Australia.

In the case of Hong Kong and Qatar, airlines from these two countries can not add extra frequencies to or from the four major Australian gateway. Instead, the only way to increase capacity is the use of larger aircraft, which Cahtay Pacific has already done.

There is still capacity available for Australian airlines to launch services to Qatar or to extend their existing schedule to Hong Kong.

Qatar Airways Boeing 777-300ER A6-BAO flies over the Sydney harbor. (Seth Jaworski)

Qatar Airways started flights to Sydney in March 2016 and added a second frequency in 2018. (Seth Jaworski)

In the case of Fiji the bilateral milestone is almost reached, with on both sides the 6,500 available places for both Australian and Fiji flag companies.

In March, aviation advice CAPA – Center for Aviation & # 39; s Blue Swan Daily website said in a research note Fiji Airways made full use of its capacity rights to Australia during peak periods.

Meanwhile, the capacity rights for Australian airlines are expected to be fully utilized by the end of 2018 after planned expansion of Jetstar and Virgin Australia.

Culbert said there was a constant dialogue between the airport and the government on air services agreements.

"We have a good relationship with the government, where we explain to them where we think we are going against the limits of existing air services agreements or that we think new air services agreements could unlock the new demand," Culbert said.

"And that is a constant conversation, we are not just talking about Nepal, there are also a number of other regions that we talk about from time to time."

Cathay Pacific has increased its flights between Hong Kong and Sydney from Airbus A330-300s to Boeing 777-300ERs. (Rob Finlayson)

Sydney Airport benefits four percent higher in the first half of calendar 2018

In terms of financial results, Sydney Airport reported net profit of $ 174 million for the six months to June 30, 2018, an increase of four percent from $ 167 million in the previous corresponding period.

Turnover rose by 7.9 percent to $ 770.8 million, reports Sydney Airport in a registration application at the Australian Securities Exchange (ASX).

Culbert said it was a strong result.

"This result reflects our targeted marketing strategy, our partnerships with government and industry, continued benefits from the liberalization of air rights, sensible investment in capacity and favorable global trends in tourism and travel," he said in a statement.

Aviation taxes, which account for more than half of the total revenues of the airport and consist of payments from airport users for terminal and airport infrastructure use, increased by 7.6 percent to $ 345 million.

Retail sales increased 8.9 percent to $ 177.1 million, while revenue from parking lots and ground transport grew 2.1 percent to $ 78.6 million.

Finally, real estate and car rental income increased by 10.9 percent to $ 118.2 million.

Passenger numbers are rising by 3.3 percent

The airport handled 21.6 million passengers in the first half of calendar 2018, an increase of 3.3 percent over the previous corresponding period.

The number of international passengers rose by 5.2 percent to 8.1 million, while domestic passengers grew by a more moderate 2.1 percent to 13.5 million.

Looking ahead, the finance director of Sydney Airport, Geoff Botham, said that the plans submitted so far for the Northern Winter Season in the second half of calendar 2018 suggested the international growth of chair capacity between four and six percent.

Sydney Airport said the total aircraft movements in the first half of 2018 were flat at 170,702, which was broadly unchanged from the previous corresponding period.

Furthermore, it was said that 35 percent of the slots were unused at the moment.

Culbert said that Sydney Airport had lock capacity, both in the peak that defined it and between 0600 and 1200, and off-peak hours.

"Once again, we were able to let passengers grow while the movements remained flat," Culbert said

"The motives of this are the usual suspects – more capacity and a bit more revival."

A slideshow of the results of the first half of 2018 in Sydney Airport. (Sydney Airport)

A slideshow of the results of the first half of 2018 in Sydney Airport. (Sydney Airport)

Sydney Airport said that 61 percent of new seats were added during the first half of 2018 – such as Qatar Airways & Sydney-Doha Depature, Emirates & # 39; fourth Sydney-Dubai rotation and Singapore Airlines' evening flight to Singapore, via Canberra – were in off-road peak periods.

Singapore Airlines launched a new Singapore-Sydney-Canberra-Singapore Singapore in May 2018 with Boeing 777-300ERs. (Singapore Airlines)

Singapore Airlines launched a new Singapore-Sydney-Canberra-Singapore Singapore in May 2018 with Boeing 777-300ERs. (Singapore Airlines)

New peak flights were the direct flight from United & # 39; s Sydney-Houston, the flight from Tianjin Airlines to Zhengzhou and the Haikou-route from Hainan Airlines.

United Boeing 787-9 N35393 at Sydney Airport. (Kurt Ams / Sydney Airport)

United started with Boeing 787-9 Sydney-Houston flights in July. (Kurt Ams / Sydney Airport)

Sydney Airport said that 49 percent of the available slots were used for domestic flights, with 16 percent for international services. Approximately 35 percent of the slots were unused.

"We can accommodate growth in the peak and we have some really good additions in the first half," Culbert said.

Geoff Botham, financial director of Sydney Airport, said that the schedules submitted so far for the Northern Winter season indicated an international growth of chair capacity between four and six percent in the second half of calendar 2018.

Regarding the improvement of the infrastructure, Culbert said that there was some consideration to add extra ports to Pier A of the international terminal and to extend the remote stands at the platform.

Sydney Airport confirmed the earlier guidance of between $ 1.2 billion and $ 1.5 billion in capital expenditures in the three years to 2021.

A slideshow of the results of the first half of 2018 in Sydney Airport. (Sydney Airport)

A slideshow of the results of the first half of 2018 in Sydney Airport. (Sydney Airport)

Sydney Airport signs agreement for sustainable energy

Apart from that, Sydney Airport says that it will discharge 75 percent of its current electricity tax from wind energy after signing a Memorandum of Understanding (MoU) with Origin Energy and Grassroots Renewable Energy.

The electricity is supplied by Grassdots Renewable Energy Crudine Ridge Wind Farm, located near Mudgee in the NSW Central West.

It is expected that the wind farm will have 37 wind turbines and 135 megawatt capacity by the time construction, which started earlier in 2018, has been completed by the end of 2019. This was able to generate 400,000 megawatt hours per year.

Origin Energy will provide caseload power when the wind farm does not generate enough energy to meet the needs of the airport.

Grassroots Renewable Energy is a partnership between Partners Group and CWP Renewables.

Origin Energy said the MoU was in agreement with Sydney Airport to provide firming generation for the University of NSW, which was complementary to the use of renewable energy from Sunraysia Solar Farm.

Furthermore, it was an area of ​​growing interest among customers who wanted to combine "more sustainable energy with the assurance of firming energy and expert portfolio management".

"Renewable energy in Australia is rapidly increasing and Origin allows our customers to source energy with a direct line of sight on wind and solar installations," said Greg Jarvis, CEO of Origin Energy.

"Origin is proud to help our customers develop energy buying strategies to improve their sustainability aspirations."


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