Key Points:

Hamilton International Airport has reported an after-tax surplus of $3.8 million for the year to the end of June, up from $2.7 million the year before.

Chairman of airport owner Waikato Regional Airport, Jerry Rickman, said the company had reduced debt during the year from $21.2m to $17.9m from the proceeds of land sales.

Revenue had increased over all key revenue lines with the exception of duty free store concession income. Operating revenues of $7.13m compared to $5.96m the previous year.

Rickman said landing charges were up 33 per cent to $1.7m, car park revenue up 2.9 per cent to $1.5m, with rental income up almost 36 per cent to $1.3m.

Departure fees were up 13 per cent to $1.56m, as the airport achieved record aircraft movements for the year at 148,000, up 24 per cent on 2007.

Rickman last week took a swipe at Air NZ, after it said it would stop flying the Hamilton to Coolangatta and Sydney route from March next year. It also plans to cut its Hamilton-Brisbane flights from three a week to twice weekly.

At the peak of its schedule Air New Zealand through its low cost airline, Freedom, was running 16 flights a week from Hamilton to Australia and Fiji.

Air NZ said the flights were being cut because of a lack of support from passengers.

Rickman said Air NZ was "distorting the facts" and told the region's mayors last week that the airline had to take the blame for the poor performance.

"Air New Zealand's assertion that the Waikato catchment area, including Tauranga and Rotorua, is not performing is untrue," he said.

Passengers flying from the region to Australia had in fact increased by 2 per cent between May and August this year.

This growth was compared to the same period last year when Air New Zealand's, Freedom, was operating out of Hamilton International Airport.

Rickman said this demonstrated that the regional market continues to be strong and supportive at a time when tourism growth nationally has slowed.

However, the airport's research showed a "hugely different picture" when it looked at passengers travelling from Australia to Hamilton.

Travellers on the Air New Zealand full-service flights from Australia were down 38 per cent compared to Freedom for the same period in the previous year.

Air New Zealand had to take responsibility for the fact that its full-service brand had failed to connect with Australians, he said.

The councils and the airport board are to meet again shortly to further consider capital requirements, including the potential extension to the runway.

While domestic passenger growth is continuing at Hamilton Airport, international passenger numbers were down.

Chief executive Chris Doak said those changes were driven by Air New Zealand increasing domestic flights while reducing its international schedule.

Domestic passenger numbers grew 4.6 per cent, while the loss of international flights to both Melbourne and Fiji resulted in a 15.8 per cent reduction from 104,000 to 87,000.

During the year, a $15.5m terminal redevelopment was completed, and after a $750,000 upgrade to the car park 600 sealed parks were available.

The company is exploring the viability of extending the airport runway, now at 2200m, and an economic benefit study has been commissioned. Extending the runway to 2500 metres would allow it to be used by wide-bodied jets that can connect to the Asian markets.