While airlines are feeling the hit of lockdown on their share prices, to the point where they may need Government bailouts, Outsider spares a thought for those who have invested in airports.
Notwithstanding the rivers of gold generated for the owners of Sydney and Canberra airports (ever paid for parking?) times have changed and the rivers of gold are now looking more like the Murray-Darling in the middle of the drought.
In happier times, these infrastructure picks have been touted as delivering stable revenues, essential to the community and resilient to changes in economic conditions. Passenger numbers are increasing and everyone still has to fly right? That is until a global pandemic sees borders closed and flights grounded…
Super funds have been investing heavily in airports, among other unlisted assets, as a way to diversify their risk and reduce volatility but the crisis is showing nothing is a ‘sure thing ‘anymore.
UniSuper, Sunsuper and AustralianSuper are all invested in Brisbane Airport, UniSuper is invested in Adelaide Airport and Macquarie is invested in Sydney Airport but now they are being forced to slash the value of these assets to the detriment of members and investors. Meanwhile, listed infrastructure funds have already stated their airport exposure has been a dent in returns.
For Outsider, he looks forward to his next trip to Queensland when the state borders re-open, but as he wheels his suitcase to the gate, he will be looking at the airport in a whole new light. Maybe he should buy a few extra packs of peanuts to boost their fortunes, after all, every little helps right?