Airport looks to Asia for more passengers

Wayne Boyd

Auckland International Airport's net profit is expected to remain flat this year, but the company is promising improved earnings thanks to the growth of new markets such as India and China.

Revenue was up 8.3 per cent, at $77.1 million, for the three months to September, with trading profit (before interest, tax, depreciation and amortisation) also up 8 per cent, at $60.8 million.

However, net profit was down slightly, from $24.9 million last year to $24.2 million, mostly because of lower passenger numbers and higher depreciation and interest costs, the company said.

Chairman Wayne Boyd - who resigned after yesterday's annual meeting to focus on other business interests - said the board expected net profit for this financial year would be similar to last year's $103.2 million.

"That said, the stage is set for much-improved earnings, particularly when passenger growth reverts to the long-term trend," he said.

New services were expected to stimulate demand and there were compelling signs of growth from markets such as China and India, he said.

Air New Zealand begins direct flights to Shanghai in November.

Passenger growth during the next year would be positive but below the airport's long-term growth rate of about 5 per cent, while fuel prices and the slowing domestic economy were likely to dampen travel by New Zealanders.

However, it was "pleasing to note" that international passenger numbers were up 3.1 per cent in September compared with last year.

"With the New Zealand dollar somewhat lower than levels prevailing for most of last year and the new services expected shortly, we expect to see continued growth in international arrivals over the balance of the year, and in particular the high summer season," Boyd said.

Chief executive Don Huse told the meeting there was more movement in tackling Auckland's traffic woes but planning authorities needed to see their role as enablers and not naysayers.

Meanwhile, the airport expected to hear back from airlines by the end of the month about proposed new passenger and landing fees due to be set by September next year.

Last month the airport went to the High Court to stop Air New Zealand disclosing the proposed fees, which had left the company "stunned and shocked".

Huse said the original request for confidential negotiations had come from the airlines and was designed to encourage a full and frank exchange.

"We look forward to continuing the consultation process with the airlines with a view to securing a negotiated outcome with all of them," he said.

"If that is not achieved, I can assure you it won't be for want of trying on our part."

After the meeting Huse said negotiations had typically included a "certain amount of public debate and rhetoric, game-playing if you like".

At an operational level there was a robust engagement with all airlines, he said. "Life goes on and we participate in the debate".

Huse had also been following an industry debate about the importance of tourism and the relative focus on competing markets.

"Certainly we would ignore at our peril our existing very strong traditional markets," he said.

"However, they are mature markets and growth will come from the new markets which we've heard a lot about recently - India and mainland China and more generally other Asian countries, like Korea."

Shares in Auckland International Airport closed up 2c at $2.03 yesterday.