Airways profit soars 54pc as NZ aviation booms

By Pattrick Smellie

To combat growing congestion, Airways expects to raise its capital expenditure in the year ahead to around $40 million. Photo / elisfkc, Flirk Creative Commons
To combat growing congestion, Airways expects to raise its capital expenditure in the year ahead to around $40 million. Photo / elisfkc, Flirk Creative Commons

Airways New Zealand, the state-owned air traffic controller, posted a 54 percent increase in annual profit and more than doubled its dividend to the Crown as it benefits from increased flights.

The Wellington-based company reported net profit of $23.2 million in the year to June 30, ahead of its budgeted $16.5 million profit. It will pay a $9 million dividend to the Crown, up from $4 million the previous year.

"Airways' positive financial result was supported by an 8 percent increase in flight volumes from the prior year, in addition to strong cost management," chair Susan Paterson said in a statement. A 4.7 percent decrease in Airways' fees over the next three years was announced in May.

However, the strong growth in air traffic in New Zealand skies was likely to tail off and become "more incremental" in the year ahead before "normalising" in 2018 and 2019, chief executive Ed Sims told BusinessDesk.

Recent growth in long-haul routes into New Zealand was unlikely to continue at recent rates, while New Zealand airports and associated infrastructure were constrained by growing congestion, he said.

Sims said net profit was likely to be lower in the current financial year.

To combat growing congestion, Airways expects to raise its capital expenditure in the year ahead to around $40 million, having increased it 10 percent in the last financial year, much of it spent on investment at Queenstown airport to allow evening flights into the alpine resort town.

"We are working very closely with several airports, particularly Auckland, to maximise the use of the single runway ahead of potential for further development", with an emphasis on data-sharing between airports to minimise congestion, Sims said.

New Zealand continued to measure its flight delays in seconds, whereas most countries measured routinely measured delays in minutes, he said.

Airways' 'commercial businesses' unit, which includes the development and delivery of air traffic controller training in New Zealand and internationally, increased net earnings to $3.5 million from $2.2 million, with Sims seeking a growing contribution to Airways' total earnings from such non-traditional services.

An announcement was "imminent" on a "very significant" sale in the US of its SureSelect pre-screening and pre-selection tool for air traffic controller training, said Sims.

Airways was also moving into air traffic controller training technology that could be delivered by apps on smartphones and tablets.

- BusinessDesk

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