Sydney Airport's international travellers, a lucrative source of...

Sydney Airport's international travellers, a lucrative source of income, will not return to pre-COVID numbers until 2024, analysts warn as the outlook for aviation darkens.RBC Capital Markets joined other financial groups in being pessimisticabout a near-term rebound for air travel as the numbers of people globally infected with COVID-19 soars to more than 10 million and deaths surpass 501,000.The investment bank has pushed out its forecasts for a recovery in Sydney Airport's international passengers to 2024 compared with 2019 levels (having formerly forecast the rebound would occur by 2022). Domestic passengers are now not expected to return to previous numbers until 2023.The gloomy outlook comes after Virgin Australia's new owners, Bain Capital, flagged plans to slash the airline's overall fleet size to 70 planes from 130 and Qantas said international flights were not expected to resume until the 2022 financial year and sacked 6000 workers.A slow recovery in Sydney Airport's international traveller numbers, which collapsed 98 per cent in May compared with a year earlier to 29,000, hurts the company's bottom line because they accounted for 70 per cent of total passenger revenue before the pandemic and a third of the company's group revenue.RBC does not expect Sydney Airport to pay any dividends for 18 months and is forecasting a dividend of just 10¢ per share in the second half of 2021.Sydney Airport scrapped its first half dividend and chairman Trevor Gerber told the company's annual general meeting in May the board would assess its position on future dividends but needed to ensure it had adequate liquidity.Analysts are becoming more concerned about Sydney Airport's liquidity as the pandemic continues, with RBC warning the company could come close to breaching default levels when its debt covenants are tested in December."We think Sydney Airport is likely to get covenant waivers but in return its banks could push it into an equity raise," RBC analyst James Nevin said.The airport has not disclosed how low earnings or cash flow have to fall before it breaches its covenants. It has also been losing income from retail and property tenants such as shops, restaurants and car hire companies during the pandemic.


A few new analyst reports out this evening.

They are all now reassessing their initial estimates.

I simply can not see how SYD won’t breach debt covenants.

I can see the spiral to below $3 now without any doubt.

10x