Airports Fear Sars More Than Iraq War
Illawarra Mercury
Wednesday April 9, 2003
SEVERE acute respiratory syndrome (SARS) presents a greater threat to the performance of airports than the war in Iraq, according to analysts and a credit rating agency.
Standard & Poor's Ratings Services said yesterday the mystery virus could more severely impact airports and their credit outlooks than the Middle East conflict.
It said, however, the China-originating SARS - now seen around the world - had no immediate impact on the ratings or outlooks of airports in Australia and New Zealand.
Analysts said both Australian and New Zealand airports were seeing a significant downturn in passenger numbers, but how big the long-term impact of SARS would be was very hard to predict.
They said the strong negative reaction by travellers would only dissipate with significant medical advances against the disease.
Macquarie Equities analyst Ian Myles said 31 per cent of Sydney Airport's international passenger traffic was out of Asia, the worst region for the SARS outbreak.
He said he expected international passengers arriving in Sydney in March were likely to be down around seven per cent compared to March 2002. ``March looks like it's probably going to be okay within our forecast, April (is going to be) minus 15 per cent," he said.
However these types of numbers - a couple of hundred thousand passengers - was not going to stress forecasts for the airport's result, he said.
The worst case scenario for Sydney Airport was for 2003-04 earnings before interest, tax, depreciation and amortisation result of $424million, versus the present forecast of $437million.
Mr Myles said in an extreme worst case scenario international flights would consolidate down to major hubs like Sydney to the detriment of airports like Melbourne and Brisbane.
Shaw Stockbroking research director Scott Marshall said SARS looked much more serious than other weak flu bugs, but he hadn't yet changed his forecasts for airport or airline stocks.
S&P said the Asian countries constituted one of the largest source markets into Australia and New Zealand, representing 25 per cent to 60 per cent of international visitors into these ports.
``The epidemic fears gripping the air travel industry and .. travel warnings to a number of Asian destinations will compound the impact ... caused by the war in Iraq," S&P said.
© 2003 Illawarra Mercury
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