Australian airports to take a hit due coronavirus

05 February 2020 - 12:00 am UTC

Australian airports will be deeply impacted by a reduced flow of travellers from mainland China following the outbreak of the Novel Coronavirus, according to S&P.

The ratings agency predicted a sharp drop in international arrivals at capital city airports in the next six to 18 months, in a report released today. 

Airports are already battling reduced international and domestic travel after the country’s extensive bushfires and are likely to be hit harder compared to previous disease outbreaks like SARS. 

This is partly because China and other Asian countries also now account for a larger share of airline passengers than when SARS appeared in 2003.

In 2008-09, South and South East Asia as well as China accounted for a combined 21% of short-term visitor arrivals in Australia. Between 2008 and 2019, the proportion climbed to 36%, S&P said.

Melbourne Airport  in particular, as well as Perth, Adelaide and Wellington airports, have the “lowest financial headroom” in their credit ratings, according to the report. 

It stressed, however, there is no immediate threat to their ratings, noting each can reduce planned capital expenditure as well as cut dividends if need be.

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