Adrian Littlewood finishes at Auckland Airport next month after nine years as chief executive. Photo / Supplied
Auckland Airport boss Adrian Littlewood says "revenge travel" will help speed up the industry's recovery, but a sobering picture of the state of aviation in New Zealand now has been revealed.
The airport expects a full recovery in air travel sometime after 2023, but has been rocked again by the latest Auckland lockdown, with daily passenger numbers last month half of what they were in its first year of operation back in 1966.
Littlewood said that around the world where borders have reopened and restrictions lowered, travel has bounced back strongly and he expected the same to happen here.
"There's a lot of pent-up demand and there'll be an element of revenge travel — people have been stuck at home for a long time."
The current Auckland lockdown — following the border failure in August at a time when the Government had rolled out two doses of the Covid-19 vaccine to just 22 per cent of the eligible population — had sent the robust domestic market into a sharp dive.
Last month there was an average of 960 passengers a day — less than half the number of daily passengers that moved through the airport in 1966, the year the airport opened.
International arrival numbers are dictated by MIQ spots, with some 300-seat aircraft arriving with a dozen or so passengers.
Global figures show markets that had opened up — much of Europe, Canada and the United States — have seen demand surge and capacity rebound to within 15 per cent of 2019.
Littlewood said 20 months into the pandemic, people were getting a better understanding of Covid and its risks, and the effectiveness of vaccines was helping rebuild confidence.
Critical to recovery was keeping as many airlines as possible flying here. Before the pandemic just on 30 airlines flew to 45 destinations around the world from Auckland and Littlewood said the airport company was doing all it could to keep them here.
Airlines wanted to keep a toehold in this market as it had previously been highly lucrative on some key routes, especially between Auckland and China and the United States.
"A focus for the team is keeping in very close contact with the airlines around the world to remind them of the quality of the routes to New Zealand and the generally high performance of them relative to other markets, to make sure that New Zealand is at the top of the list for when they restart," Littlewood told the Herald.
The challenge had been giving clarity about exactly the conditions are for reconnecting with New Zealand - and when.
"That's why we have worked so hard on both keeping contact with the airlines and also trying to play our part and helping the country to get up to a high vaccination level and support where we can."
The airport had allowed health authorities free use of its park & ride facility as a drive-through vaccination site, now the biggest in the country.
Transport engineers helped to establish the site and staff had volunteered there every day, doing everything from transporting vaccines around the site to helping public health nurses.
The company had taken part in promotions to encourage vaccinations.
"I'm proud to say that to date more than 100,000 people have already been vaccinated at the park & ride, including 25,000 while our campaign was under way."
The airport has loaned its fleet of park & ride buses to the "Shot Bro" public health campaign that takes mobile vaccination centres into the community.
Beyond vaccination, the airport company had also played a lead role in pushing for new testing technology, whether it was saliva PCR trials early this year or the initiative to work with 25 other major companies to introduce rapid antigen tests into New Zealand.
"As the vaccination rollout continues over the rest of this year and based on what we have seen overseas, we expect demand for international travel to rebuild during the 2022 calendar year," he told the company's annual shareholders' meeting, held online.
The company had taken a firm line with requiring its own frontline staff and new employees to be fully vaccinated.
In partnership with Customs, Auckland Airport has been leading a piece of work over the past eight weeks called Future Borders, working with airlines, airports and agencies to develop a set of recommendations for the Government.
"We want to be able to look forward and understand what those models might look like, learning from around the world so that when the politicians do decide it is time to go for certain markets then we are ready to go," said Littlewood, who retires as chief executive next month after nine years in the role.
Businesses in full or partial hibernation for an extended period would not be able to switch on immediately, and he said work would go into building travellers' dented confidence.
Chair Patrick Strange told the meeting international passenger volumes at Auckland Airport remain extremely low, and domestic travel remains volatile.
In the 2021 financial year, 560,000 travellers arrived or departed through the international terminal, down from nearly 8 million in the 2020 financial year, and from 10.5 million in 2019 — the last pre-Covid year.
The numbers for domestic travellers were stronger, with 6 million arriving or departing, down from 7 million in the 2020 financial year, and 9.6 million in 2019.
Strange said Covid was here to stay.
"Like the rest of the world, we will have to learn to live with it, principally through high levels of vaccination. And, like the rest of the world, our borders will open — probably gradually initially with some new controls, but open they will."
Exactly when was uncertain, but it was inevitable once New Zealand completed its vaccination programme.
"The reality is that we are quite quickly reaching the point where the risk of catching Covid-19 in the community will be greater than via our border."
He was confident of a return to growth. "But at this stage we continue to adopt more conservative planning assumptions than those of the International Air Travel Association, which is forecasting global travel to fully recover in 2023. We believe the full recovery may take a little longer, but it will be a full recovery."
In the year to June 30, 2021, revenue was down 50 per cent to $281 million, with earnings before interest expense, taxation, depreciation, fair-value adjustments and investments in associates decreasing 34 per cent to $172m.
Reported profit after tax was up 139 per cent to $464m.
However, this was driven by property revaluations.
Underlying profit fell by 122 per cent to a loss of $42m. Underlying earnings per share fell to a loss of 2.8 cents per share for the 2021 financial year. The annual rent roll increased 13 per cent to $117m and the portfolio value rose 29 per cent to $2.6 billion.
Littlewood said despite the impact of Covid, the company today was stronger and more dynamic than when he joined 13 years ago.
He will be succeeded by Air New Zealand chief operating officer Carrie Hurihanganui, who will become Auckland Airport's first woman chief executive in its 55-year history. She will join the airport company early next year.
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