Auckland Airport retail income slumps -93.8% in first half due to border controls and rent assistance

NEW ZEALAND. The devastating impact of the COVID-19 pandemic was writ large on Auckland Airport’s financial results for the six months to 31 December 2020, released yesterday.

The airport company posted the first underlying loss in its history (down -107.5% to -NZ$10.5 million/-US$7.6 million), on revenues that tumbled -64.9% to NZ$131.5 million (US$95.2 million). Passenger numbers fell -73.4% to 2.8 million with international traffic collapsing by -97.1% and transit by -94.0%, as New Zealand kept its borders strictly controlled.

All charts courtesy of Auckland Airport (Click to enlarge)

Retail income slumped -93.8% to just NZ$7 million (US$5.07 million), driven by the reduction in international passengers and the airport company’s support of retail tenants on a case by case basis. Car parking income was off by -63.6% to NZ$12.5 million (US$9.05 million).

Online retail proposition The Mall was extended to domestic passengers as part of a repositioning of the offer. The majority of international retail (including F&B) was closed with international PSR falling -40.0%. Domestic PSR actually rose by +8.5%.

Auckland Airport CEO Adrian Littlewood said: “We expect the timing of the recovery will remain uncertain in the coming five months of the 2021 financial year. While we have already seen a partial recovery of domestic travel and the opening of one-way quarantine free travel to Australia, our recovery path is strongly linked to two-way quarantine free trans-Tasman travel.

“Despite the ongoing level of uncertainty around the recovery of trans-Tasman and wider international travel the company is providing underlying earnings guidance for the 2021 financial year of a loss after tax of between NZ$35 million (US$25.3 million) and NZ$55 million (US$39.8 million).

This table underlines just how important a restart of normalised two-way trans-Tasman travel is for the airport

“Although the government remains committed to restarting two-way trans-Tasman travel, and we support this, for the purposes of this underlying earnings guidance we have assumed there will be no material quarantine-free, two-way Tasman travel during the remainder of the 2021 financial year. It also assumes no further lockdowns of an extended duration during the period.”


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