summary
- Auckland Airport posted strong growth in passenger numbers and revenue in FY23 despite a 77% decline in reported after-tax profit.
- The airport plans to proceed with a multi-billion dollar terminal renovation despite opposition from major airlines over the cost and scale of the project.
- Due to an ongoing Commerce Commission review, airport fees are set to increase in the coming years.
Things are really strange at New Zealand’s gateway to Auckland Airport (AKL). This week, the airport reported a 183% increase in passenger numbers, a 108% increase in revenue and a 77% decrease in after-tax profit compared to the previous fiscal year, ignoring major airline customers and diversifying. announced that it will proceed with – Billions of dollars in terminal upgrades paid for by increasing fees.
Strong second half bodes well for FY2024
In the 12 months to 30 June 2023 (fiscal year 2023), Auckland Airport handled 15.9 million passengers, up from 5.6 million in FY2022 and just 75 of the 21.1 million passengers handled in FY2019. %. Real net profit after tax was reported at NZ$148.1. It reported sales of $92 million and an after-tax profit of NZ$43.2 million ($26.8 million).
Photo: Auckland Airport
This compares to a net loss after tax of NZ$11.6 million ($7.2 million) and a reported profit after tax of NZ$191.6 million ($119 million) in FY22. Year-on-year revenue increased 108% from NZ$303 million ($186.5 million) in FY2022 to NZ$625.9 million ($388.7 million) this year.
Of the 15.9 million passengers, 8.1 million were domestic flight users and 7.9 million were overseas travelers, but in fiscal 2010 the figures were 4.3 million and 1.3 million. By the end of June, international seat capacity had recovered to 90% of pre-pandemic levels, domestic capacity to 89%, and cargo traffic to 95%.
Photo: Jordan Tan | Shutterstock
Auckland Airport CEO Carey Frihaganui said the airport is still a long way off, but it’s a great turnaround for an industry that suffered two years ago. He added that it will be a busy summer, with current forecasts for transport capacity between Auckland and North America surpassing 2019 levels, up 29% from November to May.
“Air New Zealand currently flies to seven North American destinations, including its flagship New York flight, and will also join Qantas on the same route from June 2023. Hawaiian Airlines, Air Canada, United Airlines and American Airlines will fly to Auckland. Delta will be among the airlines that will reconnect.” Starting in October.
“In our largest international market, Trans-Tasman, there has been a lot of movement, returning to 96% of pre-pandemic capacity. Joining AirAsia X, Batik Air will depart from Perth.”
What about new terminals?
In March, the airport said it would proceed with the construction of a NZ$2.2 billion ($1.37 billion) integrated domestic terminal as part of a broader airport construction program that will cost around NZ$3.9 billion ($2.44 billion). Decided. While there is no disagreement that a new terminal is desperately needed, the two largest airlines, Air New Zealand and Qantas, and the Air New Zealand Representatives Board (BARNZ) have vehemently opposed the project’s scale and cost.
Frihaganui said he understands the concerns about cost, but that there have been extensive discussions since 2012, including creating more than 21 concept designs for the new domestic terminal. He said the airline wants to stay with its current terminal beyond 2030 and explore more designs. I considered it, but the CEO said it was not an option.
“After 10 years of careful analysis, we believe our infrastructure plans are in the best interest of all airport users, but where feasible and reasonable, our partner airlines We will always try to incorporate improvements suggested by the company.”
Airport fees are set on a four-year cycle, with prices for fiscal years 2023-2027 coming into effect on July 1 of this year. The airport announced on August 24 that domestic fares, which had been raised from a low of NZD 6.75 ($4.19) per passenger, will rise to NZD 10.25 ($6.36) in the 2024 financial year. Announced.
The new air fares are now being independently reviewed by New Zealand’s competition regulator, and the Commerce Commission and the airport said they would not comment further until that review was completed. The airport is undergoing a generational change, pouring billions into infrastructure projects that position Auckland for decades of growth.
But harsh attitudes from major airline partners and high investment costs are likely to create more turmoil to navigate in the next decade.
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