Australian and New Zealand airports face a fragile and volatile recovery until a COVID-19 vaccine restores consumer confidence in air travel.

A report by S&P Global Ratings says airports are unlikely to see a firm recovery until late next year, with international traffic expected to recover in 2022.

"Fiscal 2021 will be weaker than our previous expectations for most airports given recent setbacks," S&P lead credit analyst Parvathy Iyer says.

New Zealand's national response to managing the pandemic, including domestic travel, had helped airports with their recovery, she says.

In contrast, she says the five Australian airports rated by the agency had been hamstrung by volatile state border policies.

"Indeed, domestic travel in New Zealand has steadily climbed since May 2020 to reach about 60 percent of pre-COVID levels."

She says that was an encouraging sign for Australian airports, which were likely to see increases of at least 40 to 50 percent of pre-COVID levels once quarantine restrictions between states were lifted.

Iyer says property revenues had helped cover operating costs for most airports, but international travel was still needed to bolster airports' balance sheets.

The report says bigger airports, such as Sydney and Auckland, needed to boost cash flows through duty free and retail revenues.

"International travellers are at least three to five times more beneficial to the airport than the domestic travellers, in terms of both aeronautical charges and retail revenues, and therefore to boost their earnings and enable the airports to comfortably trade with good margins and cash flow, we need to get back those international travellers."

-RNZ