A month after Sydney Kingsford Smith Airport (SYD) received a takeover bid of AUD22.3 billion – and then swiftly rejected it – shares in the owner Sydney Airport Holdings continue to ride high, suggesting that the market is expecting further offers (more on this below).

At the Australian Securities Exchange, SYD stock was trading at AUD7.81 at market close on July 30. This was slightly up on the level it spiked to on Monday July 5 (AUD7.78) when the offer was made.

The rejection in mid-July, has not put investors off. Sydney Airport Holdings is trading up 21.5% year-to-date, and up 54% on a year ago. Not bad for Australia’s busiest airport during one of its worst crises as a result of the COVID19 pandemic. But SYD has a lot to do to get back to where it was.

The airport only just made it into the 2019 top 50 rankings for the world’s busiest airports by passenger traffic. SYD scraped in with 44.4 million passengers to make 49^th place (down three places). In the pandemic year of 2020 – and not helped by the Australian government’s strict quarantine arrangements and quota system for returning Australian nationals – SYD dropped out of the top 50 altogether as traffic collapsed to 11.2 million, down by 75%.

Sydney is not the only international airport to slip out of the top 50. Given that the pandemic skewed markets everywhere towards home travel, big airports with busy domestic route systems like those in China and the United States have jumped to the top of the table.

However, the pandemic has weakened SYD, possibly more than other international hubs thanks to factors such as its isolated global position; heavy reliance on missing Chinese travelers; and the unwavering ‘Fortress Australia’ stance from the government. Australia’s effective ban on most international travel looks like it will stay in place for the foreseeable future.

Before the takeover bid, SYD’s share price during the pandemic had floundered with lows not seen since mid-2015 and naturally seen by some investors as a bargain. While times are tough now, they see an opportunity when things get better. That is a gamble because the big question remains when.