Air Service Development relevant commentary – the Grand Bargain: get the vaccine, get your life back – including travel

SYD has released their final financial results for FY2020. All the reports and associated presentations can be found here: https://www.sydneyairport.com.au/investor

SYD remains the largest airport in the region, and their commentary regarding the ongoing challenges facing the aviation industry and air service development (ASD), can be insightful.

Looking through the results and the commentary, the following is most notable:

1. Domestic recovery muted: Dhruv Gupta, Chief Aviation Officer stated “significant returns to domestic capacity” when certainty to domestic borders being open was clearly evident, before borders closed once more (as shown on slide 20 as presented, included below);
2. Vaccine rollouts in Australia does underpin a level of confidence, and presents an argument for borders to remain open as the vaccine is more widely administered;
3. CEO Geoff Culbert expanded on the return to meaningful travel volumes with The Grand Bargain: sign up to get the vaccine – get your life back, including the reasons for which travel is treasured (e.g. family occasions etc.);
4. “Hard to forecast traffic… but we’re optimist, especially regarding domestic”. The vaccine roll-out does offer a view, international traffic options could be taken up with the Grand Bargain enabling restrictions to lift. In this regard, Geoff elaborated on the rollout enabling more freer travel in the 2H FY21 (see slide 26 below). In response to a specific question, Geoff further elaborated: “…with the vaccine rolling out, the mood of the nation is changing… we’ll start to get our lives back, and we’ve reached an inflection point…“ where we need to be prepared for the return to travel;
5. Regarding a Tasman bubble – “vaccine corridors, may overtake travel bubbles…”, and travelling freely between Australia and NZ (and other countries) may be enabled as vaccines are administered, and SYD does expect two-way travel to commence over the course of this year;
6. Without international travel, domestic volumes could get back to similar past volumes, with international volumes contributing a lower proportion of the overall total, and some displaced travel – while Aussies can’t travel offshore.

Air New Zealand and Qantas Group will release their half-year results. Meangful commentary relative to both airlines in respect to ASD will be covered in the March

Source : Pacific Aviation Consulting Pty Limited 24 February 2021