"Lingering travel fears signal modest growth for airports - S&P"

Wednesday, August 20, 2003

Lingering travel fears signal modest growth for airports - S&P
The Australian Associated Press


SYDNEY, AAP - Lingering travel and health fears should produce just modest
financial outcomes for airports in Australia and New Zealand this year, a
report said today. Ratings agency Standard & Poor's said in its industry
report card on international airports that, despite recent positive trends
in international travel at most rated airports in July 2003, only modest
year-on-year growth should be expected until the end of calendar 2003. S&P
associate director corporate and infrastructure ratings Colin Atkin said
lingering travel and health fears should be offset by the expectation that
airlines will gradually increase capacity between September and December.
Also, a number of airlines are establishing flights on the key trans-Tasman
route, further increasing capacity and stimulating demand. There were no
rating actions in the region's airport sector in the quarter, despite the
SARS-induced year-on-year slump in inbound international traffic to
Australia and New Zealand, S&P said. With the exception of Southern Cross
Airports Corporation Holdings Ltd, the owner and operator of Sydney airport,
all airport ratings maintained stable outlooks, reflecting their resilience
to the challenges that have besieged them. Mr Atkin said Southern Cross
remained vulnerable due to the company's fragile financial profile, which
reduced its ability to weather any further shocks to the aviation
environment. However, its strong liquidity and robust demand profile as the
key gateway airport to the region underpinned its longer term position.


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