Owen Hembry

Owen Hembry is the business news editor of the New Zealand Herald

Airport upbeat on full-year outlook

Auckland Airport is working on plans for a new domestic terminal. Photo / Greg Bowker
Auckland Airport is working on plans for a new domestic terminal. Photo / Greg Bowker

Auckland Airport is not taking growth in Asia Pacific for granted as it pushes its full-year financial forecast towards the top of guidance, according to chief executive Simon Moutter.

"We're very clear in the business today that we think we are providing investors with an interesting proposition which is a relatively low-risk exposure to the Asian growth story and practically every part of our business is demonstrating the benefit of that approach," Moutter said.

But the airport would not think its Asia-Pacific location meant it would benefit from growth by accident.

"We think as an island nation on the bottom of the planet we have to work pretty hard and we have to innovate and do a bit more to earn a preferential slice of that Asian growth."

The NZX-listed airport yesterday reported net profit for the six months ended December 31 up 5.5 per cent at $69.1 million, with underlying profit up 15 per cent to $70.8 million.

Total international passenger movements at the airport, including transits, rose 6.5 per cent to 4 million for the period, with strong growth out of Singapore, China and Australia.

Moutter said that was an excellent performance and he was "cautiously optimistic" about near-term prospects, with full-year profit, excluding any fair value changes and other one-off items, expected to be at the high-end of guidance of the $130 millions.

The second half of the financial year had started well, particularly in terms of passenger volumes, with January having the busiest week for international arrivals and departures ever recorded, the airport said.

China Southern Airlines in November increased its flights to a daily service, which was showing every week in the number of visitors, Moutter said.

In total 141,424 people arrived at the airport from China last year - an increase of 19.3 per cent - with the month of December up 29.1 per cent.

"If anything our view on Asia has heightened as the global economy shifts and the continuing concerns in Europe, which several years ago were not being predicted to be quite so long lasting," Moutter said.

"So certainly the travel markets continue to change and we think the emphasis on Asia as a source of passenger volume growth for New Zealand has increased."

Outbound tourism from China was 70 million trips last year - a rise of more than 20 per cent, Moutter said.

The growth rate was phenomenal by any standards and the United Nations had predicted China would become the No 1 country in terms of both receiving and sending tourists in the next five to seven years, he said.

New Zealand's share of Chinese outbound tourism last year was only 0.2 per cent and those visitors spent $457 million, excluding international airfares, which was greater than the $447 million spent by United States visitors.

"We hear a lot of noise in the market from tourism entities who are not yet adapting to manage this new opportunity but the numbers speak for themselves and the potential is there."

Auckland Airport's share price closed down 4c yesterday at $2.40.5.

Goldman Sachs head of research Marcus Curley said it was a strong result.

"International passenger volumes were strong partly due to underlying growth, partly due to the Rugby World Cup and partly due to [the airport's] efforts of bringing in some new carriers," he said.

Auckland Airport said revenue was $215.9 million, up 8.9 per cent on the same period the previous year, with a strong performance from retail and car parking businesses. Total domestic passenger volume growth was up 0.9 per cent to 3.1 million.

The airport was experiencing capacity constraints and sub-optimal performance at the domestic terminal and was working on plans for a new terminal, Moutter said.

- NZ Herald

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