NEW ZEALAND/AOTEAROA. Auckland Airport today reported its second-ever full-year underlying loss (following that of 2020/21) but said that rebounding demand for travel was fuelling an aviation recovery.
Retail income for the financial year ended 30 June rose by +28% year-on-year to NZ$22.7 million (US$14.25 million), reflecting the partial reopening of the international retail offering in the final quarter of the year. Car parking income fell by -9%, largely as a result of a year-on-year reduction in domestic passengers in the year. Investment property rental income grew +12%.
Auckland Airport said that it has commenced discussions with incumbent duty free retailers (ARI and Lagardère Travel Retail) regarding possible extensions to the current contracts with a tender for longer-term outcomes expected towards the end of FY24.
The company said that it has continued to support its retailers by offering rent reductions and abatements that are in line with the recovery of passenger numbers. Auckland Airport’s “collaborative and tailored approach to rent relief” had resulted in NZ$173 million (US$108.6 million) of contracted retail revenue abated in the year, the company added.
Overall airport revenue rose +7% to NZ$300.3 million (US$188.5 million) while operating EBITFAI fell -16% to NZ$144.5 million (NZ$90.7 million). Net underlying loss after tax reached NZ$11.6 million (US$7.3 million). Total passenger volume declined -13% to 5.6% with domestic numbers dropping -27% to 4.3 million and international passengers (including transit) rising +123% off a very low base to 1.3 million.
Retail revival
The company said that its retail proposition is gradually reopening in line with growing international passenger numbers. The international retail offering began to reopen in the final quarter of the financial year.
By 30 June, 90% of the domestic and 45% of the international retail offering was trading. Income per passenger rose +48% on the prior year but remained under pre-COVID levels. International PSR in FY22 was similar to FY21, the company said.
Reflecting the reopening of the international border, Auckland Airport’s Strata Lounge reopened to guests in July 2022.
Auckland Airport Chair Patrick Strange said: “The 2022 financial year has been a year of change and revival for Auckland Airport as we managed through the Covid-19 lockdowns, the gradual lifting of border restrictions and the restart of international travel.
“While the global aviation industry continues to experience ongoing operational challenges there is positive momentum with solid demand for travel to and from New Zealand supporting the recovery. We are in a global race to attract back visitors and international airline routes and services and New Zealand needs to work hard to ensure their return.
Chief Executive Carrie Hurihanganui said that although Auckland Airport’s results continued to reflect the impact of the pandemic and the challenging operating conditions of the 2022 financial year, the reopening of the border to Australia in April had marked a turning point. “After two years of disruption, careful cost management and perseverance from the team at Auckland Airport our recovery is now well underway,” said Hurihanganui, who became Chief Executive in February.
The gradual reopening of the border between February and June saw airlines such as LATAM restore services, with 17 carriers flying to 28 destinations at Auckland Airport by 30 June, up from 12 airlines and 21 destinations during the nadir of the pandemic.
Auckland Airport announced the development of Mānawa Bay to the east of the precinct. The NZ$200 million-plus (US$125.6 million) premium outlet shopping destination will offer premium fashion, athleisure, lifestyle and homeware brands as well as food and dining options. With earthworks on the 150,000sq m site and the building platform complete, leasing is underway for what will be New Zealand’s first premium purpose-built outlet centre.
