NEW ZEALAND. Non-aeronautical revenues were to the fore for Auckland Airport as it revealed its 2019 results today but the COVID-19 crisis is weighing heavily on 2020 prospects.
Retail income rose +2.5% year-on-year to NZ$113.6 million (US$72.5 million), ahead of a +0.5% rise in passenger traffic to 10.6 million. Car park income performed strongly, growing +4.3% to NZ$34.3 million (US$21.9 million).
The retail performance was driven by steady growth in terminal income and double-digit growth from the Collection Point and Strata Lounge. The parking revenue results reflected growing demand for higher margin and premium products such as Valet, and increased capacity.
Retail income per passenger reached NZ$20.42 (US$13.03), driven by a +4.6% uplift in international PSR and a +28% increase in off-airport sales.
International PSR rose +4.6%, with duty free and F&B the biggest contributors. Duty free PSR grew +7.1% with
growth across all categories,=.
Chinese business spurs ecommerce growth
Onine business The Mall continued its rapid growth with transactions via the platform having grown +55% year-on-year in the second half. The airport launched WeChat Mall and added WeChat Pay and Alipay functionality, whilse also trialing direct-to-consumer shipments to China.
Domestic terminal PSR increased +7.4%, reflecting an enhanced food & beverage offering and expansion of the
food court.
Total airport revenue rose +1.1% to NZ$374.7 million (US$239.2 million).
COVID-19 casts a shadow
Auckland Airport said that the COVID-19 outbreak will hurt FY20 underlying profit, though the extent remains uncertain.
“Current forecast is approximately NZ$10 million (US$6.4 million) after tax impact in 2H FY20 over both aeronautical and non-aeronautical revenues,” the company said. This forecast assumes increasing impacts over March/April and a gradual recovery over May/June.
“We are now seeing an impact on passenger numbers with capacity to/from China reduced following travel restrictions,” Auckland Airport commented. Currently there are 8-11 services per week to and from China, compared to the usual number of up to 45).
“The recent COVID-19 outbreak is impacting the tourism industry across the globe as travel restrictions and reductions in airline capacity reduce travel,” the company continued. “Given the evolving nature of the COVID-19 situation, it is difficult to estimate the impact on tourism across the region, New Zealand and as the country’s primary gateway, ultimately Auckland Airport.
“The impact of previous pandemic outbreaks has typically been short term, followed by a strong rebound.”
