Auckland Airport Breaks 10 Million Passenger Mark

Auckland International Airport Breaks 10 Million Passenger Mark

Auckland International Airport Limited (AIAL) today reported a surplus after tax of $45.2 million for the six months ended 31 December 2003, up 13.8 per cent. New Zealand's gateway airport also announced that it had, for the first time, processed more than 10 million passengers in a 12-month period ending January 2004.

AIAL chairman, Wayne Boyd, said that the result underlined the company's strength and reflected the positive growth in passenger numbers, "we are not only seeing a rise in international visitors, but New Zealanders are travelling more as well." Total passenger movements for the six-month period increased 12.2 per cent to 5,292,601.

"Competitive fare structures and strong marketing initiatives by airlines have stimulated overall demand, particularly on trans-Tasman services," Boyd said.

Total international passenger movements increased 9.9 per cent to 3,004,760. Domestic passenger activity was also buoyant, increasing 15.4 per cent over the previous corresponding period, for a total of 2,287,841.

"The summer season is reflected in this half-year, with the record for international passengers handled in a week being broken on four occasions in November and December," Boyd commented. "The busiest week of the year has traditionally been in January, and this year a record 140,950 passengers were processed in the week ending 11 January 2004."

Reflecting the growth in scheduled services, international aircraft movements increased to 17,948, an 18.4 per cent rise. Domestic aircraft movements increased 2.6 per cent to 58,080.

"Through strong co-operation between airlines, government agencies and the airport company, the airport was able to accommodate the recent growth in passenger numbers within existing infrastructure. The last major building development was in 1997, and the recent growth in activity requires expansion of facilities," said Boyd.

A number of construction projects are taking place over the next three years. Expansion of the check-in area to accommodate 12 new check-in counters is scheduled to be complete by late- October 2004.

The reconfiguration of the existing international terminal pier to separate arriving and departing passengers is scheduled to begin April 2004. There will also be an expansion to baggage handling facilities to allow for stowed luggage screening. These are in compliance with security requirements.

Construction of four Boeing 747-sized aircraft stands, one of which will also be able to service the new generation A380, is scheduled for completion by October 2004. These stands will initially be serviced by bus operations from the existing international terminal, with a new walkway link including travelators expected to be operational by mid-2005.

A second international pier, initially to provide gates to the four hard stands but incrementally built to accommodate a total of 12 gates, is planned. The scope and timing of this development is yet to be determined.

April and May 2004 will also see the rehabilitation of a section of the runway, during which time the stand-by runway will be in use. The 38-day project involves replacing concrete slabs in a mid-section of the runway. The new, thicker, slabs will have a lifespan of at least 40 years.

Boyd said, "The cost of these projects, excluding the second pier development, is currently estimated at around $150 million over the next two to three years. They will be funded from retained operating cash flows and increased borrowings, and are not expected to impact on the directors' practice of distributing dividends equating to approximately 80 per cent of the surplus after tax.

"The increased activity level and strong financial performance has provided the directors with the confidence to proceed with investment in increased airport capacity. The company remains committed to ensuring service standards at the airport are maintained at levels that meet the expectations of passengers, airlines and other airport stakeholders."

Shareholders will receive an interim dividend of 10.5 cents per share, to be paid in March. This amounts to $32 million, an increase of 10.8 per cent on last year's interim.

"The strong first half result reflected record passenger and aircraft activity. This trend has continued in January and February 2004. Provided these levels can be sustained throughout the second half of the year, the company could well look to reporting a surplus after tax result in excess of $90.0 million." - ends -

Fast Facts

Six months to 31 Dec 03 Six months to 31 Dec 02 Revenue $129.1m $114.4m Surplus after Tax $45.2m $39.7m Earnings per share 14.9 cents 13.1 cents Aircraft movements 76,028 71,768 International 17,948 15,154 Domestic 58,080 56,614 Passenger movements 5,292,601 4,715,836 International 3,004,760 2,733,257 Domestic 2,287,841 1,982,579

Highlights

. Record passenger numbers, with total movements up 12.2 per cent to 5,292,601.

. International passenger movements increased 9.9 per cent to 3,004,760 – domestic passenger movements up 15.4 per cent to 2,287,841.

. Significant increase in scheduled international services over the New Zealand summer period.

. Revenue increased 12.8 per cent to $129.1 million, while the surplus after tax was up 13.8 per cent to $45.2 million.

. Interim dividend of 10.5 cents per share, amounting to $32.0 million, or 70.8 per cent of the surplus.

. In the absence of any adverse events, a surplus after tax result in excess of $90.0 million for the full year is projected.

. Increased activity levels and security issues will necessitate further expansion of airport capacity:

- check-in counters;

- additional international apron areas and aircraft stands;

- separation of arriving and departing international passengers;

- expanded baggage facilities to meet additional screening requirements;

- eventual development of a second international pier.

. Financing of expansion projects not expected to impact on the practice of distributing dividends equating to approximately 80.0 per cent of surplus.

. Expansion projects to be funded by retained earnings and increased borrowings.

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