NEW ZEALAND. Auckland International Airport Limited (AIAL) today announced solid financial results for the year ended 30 June 2007, with a particularly good showing from commercial revenues.
The retail business performed strongly with income rising by +8.1% to NZ$93.7 million, well ahead of passenger growth.
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‘Haere mai’ – The Maori welcome underlines the airport’s positioning as New Zealand’s national gateway | |
Simultaneously the company announced a new brand positioning. Instead of being promoted as a regional or city airport (Auckland is by far the country’s largest city) it has adopted a national vision and new core values of being “outstanding, uniquely Kiwi and welcoming”.
The company, currently the subject of a majority takeover bid by Dubai Aerospace Enterprise, also reported “significant progress” in expanding and upgrading the airport facilities, along with major developments in the aeronautical and commercial businesses.
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CEO Don Huse predicts continued improvement in international passengers |
“Total passenger movements rose +2.4% year-on-year to 12,355,191. International passenger numbers, including transits and transfers, edged up by +2.6% to 7,286,397 with very strong growth from newer markets such as China and India. International passengers (excluding transits and transfers) also rose by +2.6% to 6,373,427.
Total revenue rose +5.3% to NZ$321.946 million. There was solid revenue growth across all major aeronautical and commercial revenue lines, with the exception of airfield income. EBITDA increased +1.1% to NZ$242.8 million and on a like-for-like basis by +5.2% to NZ$252.7 million.
Chief Executive Don Huse said: “Throughout the 2007 year we started to see a rebound in passenger growth rates from the levels experienced throughout 2006, although overall at a level below the company’s long-term average of around +5% per annum. Growth in international passengers in the second six months of the year was +3.8% and we expect this improving trend to continue into the 2008 year.”
“The new NZ$85 million project to expand the Arrivals facilities at the international airport is also on track, with the first stage expected to open in April next year. Work on the new A380-capable Pier B at the international terminal is also underway and completion is planned for September 2008. This will provide much needed additional gate capacity, and will ensure Auckland Airport is fully ready for the expected arrival of A380s in 2009.”
The next stage of expansion of the international terminal (referred to as stage 3B) is being considered. Earlier planning was to complete the project in 2012 or 2013. Serious consideration is now being given to an earlier deadline before the Rugby World Cup 2011 to be held in New Zealand.
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DFS Group will soon enjoy solus status in a greatly enhanced Arrivals shopping area |
The company has also focussed on enhancing passenger facilities and services this year. New retail concessions were awarded in the major business areas of duty free (to DFS Group exclusively, instead of the previous DFS/Regency duopoly), foreign exchange (Travelex) and, from 1 July 2007, car rental (Hertz, Avis, Budget, Thrifty and Europcar).
AUCKLAND SAYS HAERE MAI
Consumer and stakeholder research over the past year has highlighted the importance of Auckland Airport to the New Zealand economy and tourism and transport infrastructure. Every year, Auckland Airport welcomes nearly three-quarters of all international passengers to New Zealand.
“As such, we are the premier gateway to this country and the first and last experience of New Zealand for most international passengers,” said AIAL. “The clear and consistent conclusion is that AIAL is increasingly becoming New Zealand’s Airport.”
As a result AIAL has extended its vision beyond Auckland towards a strongly New Zealand-based positioning. The new strategy reinforces AIAL’s commitment to growing New Zealand tourism and business and providing a “unique and compelling New Zealand airport experience”.
The branding will adopt the name Auckland Airport in place of “˜Auckland International Airport Limited’.
COMMERCIAL HIGHLIGHTS
The retail business performed strongly. As mentioned, Income rose by +8.1% year-on-year to NZ$93.7 million. This resulted from new retail developments, especially in the domestic terminal, plus re-tendering of concessions and increased sales across a variety of product categories.
Retail income per international passenger, including transit and transfer passengers, was NZ$12.87, up +5.4% over last year (NZ$13.11 in the second half of the financial year).
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Auckland Airport General Manager Retail Nick Forbes (left) and Retail Commercial Manager Scott White (right) at the airport’s new Adidas All Blacks store, which is doing roaring business in the run-up to the Rugby World Cup in France | |
Independent research on the preferences of passengers and other visitors was conducted during the year for food & beverage, duty free, car parking and foreign exchange services. This research confirmed travellers are looking for choice, quality, authenticity and specialist offerings at competitive prices. The data is being used to refine existing retail offerings and new concession tenders.
In the international terminal, expansion of the arrivals area is on track for completion in April 2008. The duty free area will be doubled in size to 1,600sq m – making it the most extensive arrivals duty free offering in Asia Pacific. Enlargement and upgrade of the food court and retail area in the international departures area is also being considered.
A five year concession for an adidas concept store airside (pictured below) in the international terminal was awarded in May 2007. The 150sq m flagship store opened in July and offers a wide range of licensed apparel, including team sportswear for the All Blacks in time for the Rugby World Cup 2007 in France. The agreement duration means adidas will continue its offering through to the Rugby World Cup 2011.
FOOD & BEVERAGE SERVES UP STRONG GROWTH
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The Blue Bar, run by the HMSC-AIAL Limited joint venture, is part of an enhanced F&B offer on the second floor pier area of the international terminal |
The long-running food & beverage joint venture between AIAL and HMSHost, HMSC-AIAL Limited, traded well during the year. The 50/50 alliance operates F&B facilities at the international terminal.
AIAL’s 50% share of the HMSC-AIAL’s profit was NZ$0.9 million, up +31.4% year-on-year.
New facilities on the new second floor pier area have proved extremely popular. They include a Burger King, café and a lounge bar offering extensive views over the airfield and Manukau Harbour.
CAR PARKS ON COURSE
Car park income was NZ$25.9 million, a rise of +4.1%. Car parking at the domestic terminal performed well but revenue growth slowed at the international terminal due to an easing in the growth of New Zealand travellers, higher fuel prices and the increased use of public transport by passengers.
Car park operations at the domestic and international terminals were outsourced during the year to Wilson Parking, an experienced Australasian operator. The business is operated under the Auckland Airport Parking brand.
FOOTNOTE: Auckland International Airport Limited will be the subject of an extensive profile in The Moodie Report Print Edition in October. It features interviews with Don Huse and General Manager Retail Nick Forbes, as well as other AIAL commercial executives and concessionaires.
MORE STORIES ON AUCKLAND INTERNATIONAL AIRPORT LIIMITED
International passenger numbers grow by +3.8% at Auckland Airport in July – 22/08/07
Auckland Airport, Adidas and All Blacks – The Smile Train gets triple A-boost – 17/08/07
Auckland Airport calls for Expressions of Interest to develop hotel – 14/08/07
