Auckland Airport is re-validating climate change assumptions following the devastating flood which damaged buildings and forced it to suspend operations on January 27.
It is still working on repairs to part of its international terminal and will claim insurance for damage and business interruption for the inundation which forced the suspension of flights for 37 hours and 18 hours from its domestic building.
The company’s chief executive Carrie Hurihanganui said she couldn’t put a figure on the claim but excess would cost $500,000.
The airport today reported its first interim underlying profit in two and a half years as aviation rebounds strongly from the pandemic. Air New Zealand announced today it has surged back to profit and Qantas announced a record first half result.
While net profit at Auckland Airport (AIA) was hit by a $94 million property valuation decrease, underlying profit was $68m, up from a $11.5m loss for the same period last year.
Assumptions made in a 2019 study that raised concern about sea level rise and the inundation risk by 2040 would be re-validated following the rainfall which smashed records. A metre of water in and around the terminal followed an intense two hours of rainfall assessed as being a one-in-400-year event.
“The unprecedented flooding over Auckland Anniversary Weekend caused huge disruption to travellers and airport operations, and like other infrastructure owners, we are taking a hard look at our stormwater system and modelling around climate change to ensure the future capacity we are building into our infrastructure programme is fit for purpose.’'
Work is nearing on a $1 billion integrated domestic jet terminal and Hurihanganui said some assumptions around the detail of its design and equipment - such as where its electrical plant is located - would be re-assessed.
‘‘We just will double check through our third-party advice that we’ve got that right,’' she said.
Auckland Airport revised its guidance for the 2023 financial year following a stronger than expected rebound in the aviation market as demand to reconnect exceeded capacity and expects to resume paying dividends in October.
The company says it continues to see positive signs in the recovery of the aviation industry and as a result is revising earnings guidance of underlying profit after tax to between $125m and $145m, up from the guidance of between $100m and $130m provided in October last year.
Earnings before interest, tax, depreciation, fair value adjustments and investment in associates (Ebitdafi) was at $189m, up 213 per cent from $60.3m on a bounce in total income to $287.8m, more than double the $126.2m for the comparable six months in 2021.
Opening of borders resulted in resurgent passenger traffic of 7.6 million through the terminal, 4.1 million domestic and 3.5 million international.
For the full 2023 financial year Auckland Airport expects international passenger numbers will be around 70 per cent of pre-Covid levels, with domestic passenger numbers at around 85 per cent.
This would result in overall passenger numbers of around 16 million for the 2023 financial year, roughly comprising 50 per cent domestic passengers and 50 per cent international passengers.
In addition, Auckland Airport is also revising capital expenditure guidance for the financial year from $600m to $700m to between $525m and $600m – largely reflecting the phasing of development from design to construction for a number of commercial projects.
Auckland Airport expects total passenger numbers to recover to pre-pandemic levels during 2025, broadly consistent with the International Air Transport Association’s outlook for global air travel.
The airport agreed with banks following fresh interest covenant agreements in February last year, no dividend has been declared for the six-month period to December 31, 2022.
Auckland Council owns 18 per cent of the company which says it will be reviewing its dividend policy later in the 2023 financial year.
Chair Patrick Strange said the group was forecasting continued growth, although the post-pandemic recovery “still has some way to go” because global aviation is facing ongoing systemic challenges.
“Travellers are feeling the frustration of mishandled bags, airline schedule changes and global staff shortages, as well as the increased likelihood of delays and queues across the aviation system – all issues that are going to take time to resolve.”