20 Oct 2022

Auckland Airport lifts profit guidance as travel revival fuels recovery

12:24 pm on 20 October 2022
Auckland Airport international terminal

Auckland Airport. File photo. Photo: RNZ / Samuel Rillstone

Auckland Airport has lifted its full-year profit guidance following a stronger than expected rebound in the aviation market.

The airports company updated its outlook ahead of this morning annual shareholders meeting, as high aircraft load factors and continued strength in forward international seat capacity expected to fuel the ongoing recovery.

It was forecasting an underlying after tax profit of between $100 million and $130m in the year ending June, compared with August's guidance of between $50m and $100m.

"For the full 2023 financial year we are now anticipating international passenger numbers will be between 60 and 70 percent of pre-Covid levels and domestic passenger numbers between 85 and 90 percent," chief executive Carrie Hurihanganui said.

"We have also adjusted our outlook which is now in line with International Air Travel Association's (IATA) view that the global industry will recover to pre-pandemic levels by the end of the 2024 calendar year."

Auckland Airport had seen a strong first quarter within New Zealand and internationally, particularly in North and South American, South Pacific and Trans-Tasman routes.

"The shape of the recovery is also consistent with what we're seeing globally, with travel significantly picking up in the United Kingdom, Europe and in the Americas following the relaxation of border controls," Hurihanganui said.

While North Asia had been slower to open, she said there was an uplift in seat capacity.

Five airlines will be flying between Auckland and North America over the high season, offering up to 60 flights per week and direct flights to eight destinations, including Honolulu, Los Angeles, San Francisco, Houston, Dallas, Chicago, New York, and Vancouver.

Capacity to North Asia had been boosted by Korean Air increasing its services, while Trans-Tasman travel had been boosted by connections with China Airlines flying to Taipei via Brisbane and AirAsia X flying to Kuala Lumpur with a Sydney touchdown.

In addition, she said Emirates would restart daily non-stop Auckland-Dubai A380 flights from 1 December.

However, the outlook was not without some ongoing turbulence.

"The global aviation system continues to be impacted by constraints such as availability of crew and ground staff and resourcing challenges associated with bringing fleets out of hibernation," she said.

" Uncertainty also remains about the reopening pathway for the Chinese market."

Auckland Airport's capital expenditure guidance for the 2023 financial year remained unchanged at between $600m and $700m, with ongoing roading, airfield, and investment property projects alongside enabling

works for the combined domestic and international jet terminal.

The company was continuing to consult with the industry aeronautical prices under Price Setting Event 4.

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