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Home / Business / Companies / Airlines

Airport chief checks in for the long haul

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
6 Dec, 2013 04:30 PM6 mins to read

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When Adrian Littlewood arrived in New Zealand as a 4-year-old (centre, with his grandparents) in 1975, the terminal's exposed steel beams betrayed its original use as a cargo shed.

When Adrian Littlewood arrived in New Zealand as a 4-year-old (centre, with his grandparents) in 1975, the terminal's exposed steel beams betrayed its original use as a cargo shed.

The first photo of Auckland Airport chief executive Adrian Littlewood in New Zealand reveals the challenge that successive bosses at the company have wrestled with for decades - the domestic terminal.

The 1975 picture shows a young Adrian and his grandparents on the day he arrived in the country with his parents in what was the international terminal and is now the domestic base, its exposed steel beams betraying its original use as a cargo shed built in the 1960s.

"The first time I actually touched New Zealand was the domestic terminal. You can still see those beams in the domestic terminal today, so you can see how long that terminal has been around."

After just a year of his tenure, the airport has started a $30 million renovation of the ageing terminal. A permanent solution is planned with a new domestic terminal being built on the southern end of the present international building - a cornerstone of a $2.4 billion "airport of the future" to be developed over the next 30 years.

Littlewood was born in Britain while his parents were doing an extended OE and lived in London for his first four and a half years.

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"I had the good fortune to travel around Europe as a kid. I got a taste for travel early; one of the favourite smells of my childhood was jet fuel."

After following his father into law, he returned to London where he worked in the City.

"When I left I committed to myself that I wouldn't come back as a lawyer. I was more interested in what the clients were doing. What I wanted to be doing was being closer to where the decisions were being made."

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That led to work as a management consultant in media and technology, riding the late 1990s dotcom bubble until it burst at the end of that decade.

"I was there when it hit the wall. As a consultant I was trying to figure out what was left in the business and what they could get out of it."

The self-confessed technology geek shifted back to New Zealand and about 2003 worked for Roam A.D. which was a wireless data company battling Telecom and Vodafone.

"It was real seat of your pants stuff. With any start-up the thrill is the challenge of being paid every three months. Then I got realistic, we had a baby, bought a house and realised I needed a job with regular income."

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That led him to Telecom where he worked in a newly formed strategy team charged with coping with rapid change, the growing competition from Vodafone and a tougher political and regulatory environment.

He loved it. "It was almost like being in the corporate SAS. You had to learn to be flexible and resilient, we were in the thick of regulatory focus and in those days, mobile phone tech [was] exploding, broadband too."

It was there he firmed up one of his key approaches to business: "If you've got your own plan, stick to it."

After five years, he followed another senior executive - Telecom's chief operating officer Simon Moutter - to the airport just after Paul Reynolds started in the top job at the telco. Moutter had been made chief executive of Auckland Airport and Littlewood was appointed general manager of retail and commercial.

He liked the idea of working for a New Zealand-owned company where the big decisions were made here.

"I wanted to work for a company that mattered for New Zealand. Eighty per cent of shares are owned by New Zealanders."

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Littlewood's job covered marketing, branding, carparking and retail at the airport, which was becoming more customer-focused after a big capital works phase.

"There was a great opportunity to make changes, we transformed the international terminal that was locked in the '80s with shades of teal and peach. We wanted to create something people wanted to go to rather than pass through."

The airport was also losing the carparking battle to new businesses sprouting around the airport.

Littlewood got an online booking system running and offered more choice. Revenue on the airport company's 8500 car parks grew 10 per cent over the past year to more than $40 million.

"We managed to recover market share. We had to provide better offers and people have got a choice."

Shops in the international terminal have been revamped and in the past year earned $124 million, up nearly 3 per cent on the previous year.

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When Moutter returned to the top job at Telecom in 2012, Littlewood was appointed chief executive.

The non-aeronautical part of the business - retail, parking property, development and utilities - made up 55 per cent of $448 million revenue in the last financial year. Big earthworks to create a landscaped gateway to the airport are part of $120 million to $130 million of capital spending this year and Littlewood is mindful of concerns the airfield risks coming second.

Running an airfield is where the company starts. "Having fantastic infrastructure and operations earns us the right to do what we do. If we lose sight of that, we lose the right."

Shareholders payout no threat to growth plan

Auckland Airport's big growth aims will not be affected by plans to return $454 million to shareholders next year.

Chief executive Adrian Littlewood said the extra payout was a result of strong growth in the past few years and the plans for the $2.4 billion "airport of the future" were on track.

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The company plans to return $454 million to shareholders by way of a share cancellation, with 60 per cent of the payment to be treated as a taxable dividend.

It will seek shareholder approval in February for a scheme of arrangement to cancel one in 10 shares at $3.43 each.

The transaction requires approval of at least 75 per cent of voting shareholders and the company would then seek final High Court clearance in March, with the return of capital aimed for mid-April.

Standard & Poor's lowered the airport's credit rating outlook from positive to stable but affirmed the airport's long-term credit rating of A minus.

Analyst Thomas Jacquot said the revision was based on the airport's plan to fund the capital return from debt.

"The increase in debt will drive a relative weakening of the key financial metrics over the short term, in relation to our prior expectations, although this deterioration is not severe enough to result in the ratings being under downward pressure," he said.

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Morningstar's analysis in the wake of the airport's announcement says the company is in "reasonable" financial health and give its shares a "hold" rating.

The Morningstar analysts estimate the new domestic terminal work will cost around $250 million over the next five years.

They say earnings are expected to increase by 6.1 per cent a year on average for the next five years.

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