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Australian Infrastructure Fund higher as Tiger sinks claws into Sydney

Tiger Airways CEO, Tony Davis
Tiger Airways CEO, Tony Davis

Australian Infrastructure Fund (AIX), which owns 10.1% of Melbourne Airport, is seeing some positive route development across its portfolio of Australian airports, driven by LCC expansion.

Tiger Airways announced plans to commence four times daily service to Sydney in July - breaking the strangle-hold over the route by Qantas and Virgin Blue. Traffic on the Sydney-Melbourne route has been languishing recently, due to a lack of price competition.

Sydney-Melbourne (city pair) vs Total Australian domestic market (all routes) passenger numbers growth (% change year-on-year): Jan-2001 to Jan-2009

Load factors on the route meanwhile have consistently been higher than the rest of Australia, hitting 82% in Jan-2009, according to Australian Bureau of Transport and Regional Economics traffic data.

Sydney-Melbourne (city pair) vs Total Australian domestic market (all routes) passenger load factors (%): Jan-2001 to Jan-2009

Melbourne Airport posted 7% passenger growth, or an increase of more than 400 000 passengers, in the first quarter of fiscal 2009, thanks to solid increases in international and domestic airline competition at Australia's second busiest airport.

Australian Infrastructure Fund shares rose 1.5% on Friday. Macquarie Airports shares rose 1.7%. Hainan Meilan Airport was the day's big mover, advancing 9%.

Selected airports daily share price movements (% change): 03-Apr-09

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