Of all the corporate victims of COVID, no sector has been more damaged than aviation and tourism.
Both are the lingering sores from COVID and there seems no way of any quick return to travel and tourism anywhere near the scale pre-COVID (in January and February of 2020).
And of those sectors, airlines, airports and travel companies have been starkly exposed.
Today it will be Qantas that revealed a big blob of red ink its December half results to go with the losses of 2019-20, especially the closing months of this year.
Yesterday it was the 2020 results of Sydney Airport and a big loss and the interim figures from travel agents, Helloworld.
At Sydney Airport it was revenue damaged beyond all estimates, profits and dividend gone, but management still had an upbeat ‘chin up’ and ‘jolly hockey sticks’ approach to the future, forecasting a recovery this year as vaccinations kick in.
Sydney Airport reported a full year loss of $145 million, a half a billion or more turnaround from 2019’s profit of $403 million.
Australia’s busiest airport revealed that revenue fell 51% to $803 million in the 12 months to December 31, with traffic falling 75% to just 11 million passengers and most of those domestic with international passenger traffic down to a trickle.
“The COVID-19 pandemic delivered a crisis of unprecedented magnitude to the global aviation industry, and Sydney Airport has been right on the frontline,” Sydney Airport chief executive Geoff Culbert said in a statement to the ASX.
The company scrapped its dividend and did not provide guidance for when payouts might resume given the uncertainty around when the market will recover.
However Mr Culbert said he was “cautiously optimistic” that the recovery would start this year.
“The recovery won’t be linear, but our experience shows that when restrictions are eased and borders come down, people are keen to travel,” he said.
That recovery is still distant – passenger numbers were down 94% in January compared to the same month a year earlier. The comparison starts looking easier to grasp as the impact of the pandemic’s border closures start appearing in the 2020 comparison base from March onwards.
Sydney Airport also announced that prominent director David Gonski will replace Trevor Gerber as chairman after its annual general meeting in May. Mr Berber has been chairman for six years and on the board for 19 years.
Mr Gonski has been on the company’s board for two and a half years and previously served as a director at Singapore Airlines from 2006 to 2012. More importantly he is a former chair of ANZ bank, a more valuable background to have in a chairman at the moment.
SCG shares closed down just over 1% to $2.84.
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Meanwhile, Brisbane-based travel agent Helloworld reckons any recovery will come in 2022, so Sydney Airport will have a while to wait with fingers crossed.
Wednesday saw Helloworld reveal a $14.8 million half-year loss, down from the $22 million profit a year ago, thanks to the negative impact of the virus and the crippling of travel demand globally and within Australia.
The group reported on Wednesday that the value of bookings in the six months to December 31 fell 88%, driving revenue slashing revenue 85% to just $29.5 million.
“The travel, tourism, hospitality and transport industries have just been through the most difficult year ever experienced and the first half of 2021 is shaping up to be equally as challenging,” Helloworld said in a statement to the ASX.
“Based on international travel recommencing in 2022 and on a significant uplift in domestic sales as state borders remain consistently open, we are confident this will translate into an enormous demand for travel and most particularly international travel when it resumes.“
Helloworld did not declare a dividend. Its shares finished the Wednesday trading session 1.7% lower at $2.31.
The lack of dividends from both companies tells us more about the realities of the outlook for these sectors than any statements. Qantas will be the same today.
