View Full Version : SAC wants to buy Qantas terminal

21st Jan 2004, 09:26
Wed "Sydney Morning Herald"

SAC wants to buy Qantas terminal
By Brian Robins
January 21, 2004

Sydney Airport Corp expects to start negotiations to buy Qantas Airways' Sydney terminal in the coming weeks, with the acquisition expected to be concluded by the middle of the year.

The purchase, at about $500 million, would give Sydney Airport control of all passenger terminals on its Mascot site.

The airport acquired the leasehold for the Ansett terminal for $192 million in May 2002.

The start of negotiations to acquire the Qantas terminal comes as the airport is on track to post earnings before interest, tax, depreciation and amortisation (EBITDA) of $420 million for the year to June 30 as it benefits from the restoration of full operations at the former Ansett terminal and continuing cost reductions.

In the six months to December 31, the airport posted EBITDA of $206.2 million, up 12 per cent, on revenue of $271.5 million.

Securities analysts had forecast EBITDA for Sydney Airport of $420 million to $440 million for 2003-04.

Large reductions in costs helped to offset the effect of higher security charges at the airport, with only part of the higher costs recouped from travellers.

"Geoff Dixon at Qantas has said it is for sale," executive chairman of the airport, Max Moore-Wilton, said of the anticipated purchase of the leasehold of the Qantas terminal.

"We would expect to enter into negotiations in the first quarter of the year. This is about a willing buyer and a willing seller. Ideally, we would like to have it sorted out by mid-year," Mr Moore-Wilton said.

Qantas leases the land and owns the building on the site.

Qantas is also expected to sell its terminal at Melbourne airport, raising close to $1 billion in total.

Negotiations to acquire the terminal come as the airport is in the middle of cutting its work force to 250 by mid-year from 400 in mid-2003.

Redundancy payments of more than $6 million were made in the six months to December 31 as the airport cut its work force to 315, with the balance to leave by mid-year - resulting in further redundancy payments in the current year.

In the December half, 13.3 million passengers passed through Sydney airport, a rise of 7 per cent, with most of the growth in domestic travel. International traveller numbers rose just 3.1 per cent.

Macquarie Airports' managing director, Kerrie Mather, said the strong rise in earnings at the airport on only slight growth in international passenger numbers highlighted the strength of the asset. Macquarie has a 53 per cent shareholding in the airport.

"December growth of international traffic of 7 per cent was the second straight month of better than 7 per cent growth," Ms Mather said. "In the second half we should see the impact of additional airline capacity from Gulf, Qantas and Emirates, which were announced in the latter part of last year, and the new Hawaiian Airlines service."

In the December half, revenue per passenger stood at $20.46, with Sydney airport earning a gross profit per passenger of $15.54.

This gross profit margin of 79 per cent ranked Sydney Airport as one of the most profitable in the world, Ms Mather said.

"This is at the upper end," Ms Mather said. "It would be one of the most efficient in the world."

Earnings were hurt by a $1.9 million payment to one of the airport's larger international carriers following a dispute over aeronautical charges.


bitter balance
21st Jan 2004, 11:13
Hard to believe they are patting themselves on the back. All you have to do is calculate your beak even, stick on 79% and divide it by the number of movements by airlines that have no choice but to operate there. Then you call yourselves clever business people.