Major Australian airports will take a hit to their earnings in the near-term as the worst bushfires in a decade trim tourist arrivals.
A decline in international and domestic passengers in the next six months will reduce activity at airports including at Sydney, Melbourne and Brisbane – the major international gateways into the country – according to ratings agency S&P.
“It will be difficult to say that international travel into Australia is not affected.” S&P Director Parvathy Iyer said on a media webcast yesterday. “I expect this will have the effect of some form of subdued international traffic in the first quarter of 2020, which will flow into the earnings of airport companies during the year.”
Her comments come amid catastrophic scenes in the country, with the fires raging through around 12 million hectares of land since September, according to Rural Fire Service data. Victoria and New South Wales have suffered the most damage to property and infrastructure, and economists estimate that the country’s 2020 GDP could be affected by between 0.1% to 1%. Much of Australia is expected to be fire-prone until the end of March.
Iyer said that the airports will likely be able to withstand the impact overall because the fires are a “transient event”.