Airports need strong jab rollout: Moody's

·2-min read

A strong take-up in coronavirus vaccinations should support a sustained recovery in Australian air passenger traffic late this year.

However, Moody's Investors Service warns the recovery for airports could be uneven if states adopt different approaches to the vaccine rollout.

The national COVID-19 recovery plan targets vaccination rates of 70 to 80 per cent to start easing restrictions, although there has been some consternation among some states and reservations on whether they will strictly follow the plan.

These targets are expected to be reached in late October and late November this year.

Almost 67 per cent of Australians aged over 16 have had one virus jab, while just under 42 per cent are fully protected with two doses.

Moody's, the global credit rating agency, says underlying demand, and international experience, suggest a quicker domestic recovery for Australian airports provided consumers have confidence that internal borders will remain open.

"However, airports in states with a relatively slower vaccine rollout and greater inclination to lock down will face a slower pickup in activity," Moody's vice president and senior analyst Nicholas Chapman says.

Airports with a greater exposure to international traffic will also lag behind the more domestically oriented airports.

Moody's noted domestic travel rebounded to over 65 per cent of pre-pandemic levels by the end of April 2021 when state borders were open.

At present, NSW, Victoria and the ACT are in lockdown.

"Australia's highly urbanised population in a geographically large, island country underpins strong travel demand that will lift airports post COVID-related disruptions," Mr Chapman says.

"Moreover, the sector's newfound operational efficiencies, as well as continued solid support from capital markets, will support a recovery."

Moody's believes beyond the recovery, airports are well placed to sustain their business profiles.

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