Terminal revamp on airport agenda

Auckland International Airport's throughput of passengers is increasing - which puts the domestic terminal under a great deal of pressure. Photo / Steven McNicholl

The days of Auckland International Airport's old domestic terminal are numbered as the NZX-listed company gets to work on a vision for a dual runway, integrated terminal operation.

Chief executive Simon Moutter, speaking at the annual result briefing, said the move was a master plan that had been around for decades.

"For the business and for New Zealand it is essential that as congestion begins to occur that we have a path to unlock the potential for future growth to benefit New Zealand tourism and trade," Moutter said.

Growing demand, particularly brought about by larger A320 aircraft, combined with more electronic processing systems by airlines, meant the airport was seeing busy-hour throughput of passengers increasing and putting the domestic terminal under a great deal of pressure, he said.

"It is clear to us and most observers that the old terminal is reaching the end of its useful life." The solution was to be finally determined, although there was emerging thinking along the lines of a two stage process, he said.

Stage one would be delivered in about three years time and would see the first part of a new integrated terminal, with associated aprons and taxiways, built alongside the international terminal at a cost of about $100 million to $150 million.

Interim improvements would be made to the existing domestic terminal to give it a short life extension at a cost of about $15 million to $25 million.

Stage two would be a few years later and would see the completion of the integrated terminal, aprons, taxiways, a new runway of at least domestic jet length capability and the closure of the existing domestic terminal.

Auckland Airport yesterday posted an underlying profit for the year ended June 30, excluding one-off items and valuation changes, up 15.1 per cent on the previous year at $120.9 million.

Much of the strength of the underlying profit had resulted from a rise in total income to $397.7 million, which was up 9.5 per cent on the previous year, the company said.

Two key drivers of the revenue growth were better than expected retail results in the new departures area and a stronger yield in car parking.

"The break out profit result has been delivered despite some significant challenges in the global environment, the volatility in both the economy and some of the natural events and disasters that we've confronted particularly in the last six months," Moutter said.

"Our focus on growing the Asian market has paid off with some big increases in air services and passenger volume growth, particularly out of China which was our number one strategic objective."

Underlying profit for the current financial year was expected to be in the $130 million range.

Chief financial officer Simon Robertson said passenger volumes were strong at all four airports in which the company had an interest, with growth expected in the next year.

"In fact Auckland Airport had started off particularly strongly in the first six weeks of this financial year with passenger growth about 7 per cent for international passenger numbers," Robertson said.

The balance sheet was strong, with a decrease in interest costs reflected in lower average interest rates, while average debt maturity and interest cover had increased, he said.

Auckland Airport's shares closed up 1c at $2.22.5 yesterday.

Goldman Sachs head of research Marcus Curley said: "Retail was the standout, but they are certainly meeting expectations for growth in other parts of the business as well."

"For a fairly defensive asset -15.1 per cent [underlying profit] growth is a pretty good performance."

For the current year, Curley expected the Rugby World Cup to prove a mild positive but to not make a huge difference to performance.additional reporting APNZ