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Sydney Airport SYD

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Morningstar’s Analysis

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Economic Moat




Overseas Traffic at Auckland and Sydney Airports Near Zero, but Domestic Picking Up; Maintain FVEs

Adam Fleck, CFA Regional Director

Analyst Note

| Adam Fleck, CFA |

Ongoing border closures continue to limit international passenger traffic at both wide-moat Auckland and narrow-moat Sydney Airports. But there is room for optimism, with renewed domestic tourism, local travel bubbles, and vaccines on the horizon. Encouragingly, Auckland Airport’s management noted at its annual meeting that higher domestic travel, and associated business such as car parking, has driven greater first-quarter fiscal 2021 profitability than anticipated. While the timing of border openings remains uncertain, the recent passenger trajectory tracks our near-term forecasts, and we maintain our fair value estimates: AUD 6.20 for Sydney, and NZD 6.50 (AUD 6.00) for Auckland.

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Company Profile

Business Description

Sydney Airport owns the lease to operate Sydney Airport until 2097. As Australia's busiest airport, it handles more than 40 million passenger movements annually and connects to close to 100 international and domestic destinations. Australian airports operate in a benign regulatory environment and negotiate with individual airlines regarding charges and terms. The regulator monitors the aeronautical and car park operations to ensure reasonable pricing and service. Retail and property operations are free from regulatory oversight.

10 Arrivals Court, Sydney International Airport
Sydney, NSW, 2020, Australia
T +61 296679871
Sector Industrials
Industry Airports & Air Services
Most Recent Earnings
Fiscal Year End Dec 31, 2020
Stock Type
Employees 5,743