Could the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price be a dividend recovery idea? It announced its monthly traffic update for November.
Sydney Airport traffic update
Today the company revealed that for the month of November 2020, it saw total passenger numbers decline by 90.6% to 350,000.
That number was made up of 308,000 domestic passengers (down 87.1%) and 42,000 international passengers (down 96.9%).
Sydney Airport said that the modest recovery in domestic traffic in the month was driven by demand for New South Wales (NSW) and Victoria interstate travel. Unrestricted travel between NSW and Victoria was permitted from 23 November.
The downturn in international passenger traffic is expected to persist until government travel restrictions are eased.
The comparison numbers will continue to show heavy declines until February and March. It was April when air travel had almost completely stopped.
Income announcement
If you’re expecting an imminent announcement of dividends from Sydney Airport then you’re going to be disappointed.
Considering the huge drop in passenger numbers, it was unsurprising that Sydney Airport said that there would be no distribution paid for the upcoming result.
Could this be a recovery opportunity?
Well, there’s certainly a long way to go for passenger numbers, earnings and the Sydney Airport share price to recover back to its former glory. Sydney Airport shares are still about 26% lower than they were 11 months ago.
Aside from the worrying new community cases picked up in NSW today and yesterday, the whole Australian COVID-19 situation is very good. Domestic travel could really pick up over the next few months if state borders remain open to all other parts of the country.
Considering how low Australian interest rates are, you’d think the Sydney Airport share price would be quite a bit higher if passenger numbers were close to normal.
Sydney Airport is an interesting idea if you think beyond 2021 (which will still have COVID-19 impacts). But I think the full recovery requires a really positive trend with COVID-19 cases and the vaccine globally before Sydney Airport reaches its full potential. There are other recovery-theme ASX shares I’d rather go for first such as EML Payments Ltd
(ASX: EML).
