Sydney Airport to raise $1.4bn to combat Covid-19 impact

11 August 2020 (Last Updated August 21st, 2020 11:54)

Sydney Airport Holdings has announced that it will raise A$2bn ($1.43bn) of equity to reduce its debt levels after experiencing a half-year loss as the Covid-19 pandemic continues to affect travel.

Sydney Airport to raise $1.4bn to combat Covid-19 impact
The net debt position of Sydney Airport is expected to reduce to A$7.1bn from A$9.1bn after the fund raising. Credit: MDRX.

Sydney Airport Holdings has announced that it will raise A$2bn ($1.43bn) of equity to reduce its debt levels after experiencing a half-year loss as the Covid-19 pandemic continues to affect travel.

In May, the airport operator said it did not anticipate the need to increase equity, which was before Melbourne’s Covid-19 cases surged, thereby resulting in the closure of state boundaries and further damage to travel and business.

Reuters quoted Sydney Airports CEO Geoff Culbert as telling analysts: “The outlook is very uncertain.

“What we are witnessing today is the most stringent restrictions on the movement of people since the second world war, and in the domestic context possibly the most stringent movement restrictions in Australia’s history.”

The airport registered a net loss of A$53.6m ($38.36m) in the first six months of this year compared to a profit of A$17.3m ($12.3m) recorded last year.

Sydney Airport said that domestic passenger numbers have so far decreased by 94.2% in August compared to the same period last year, down from the 88.2% drop reported last month.

International traffic this month has plunged 96.8%.

Culbert added that cargo flights accounted for 70% of take-offs and landings, versus 2% before the pandemic.

In a briefing, Culbert said: “In addition to the measures to protect the physical health and safety of our people that I outlined earlier, our response also acknowledges the risks to mental health, as our people deal with a highly uncertain and rapidly changing environment.

“On this front we accelerated the deployment of a mental health training programme for both leaders and frontline employees and tailored it specifically to the unique challenges we are all facing with Covid-19.

“We also committed to guaranteeing the jobs of the approximately 500 people directly employed by Sydney Airport through to the end of September. Personally, this was the right thing to do. There is a human cost to this pandemic, and it is not just measured in the number of people who are infected or sadly die from the virus. The impact on people’s lives from loss of employment cannot be understated.”