Auckland Airport lifts profit guidance as travel revival fuels recovery

Auckland Airport International Terminal

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

Auckland Airport has raised its full-year earnings guidance after a stronger-than-expected recovery in the aviation market.

The airport company updated its outlook ahead of today’s AGM of shareholders as high load factor factors and continued strength in international seating capacity should fuel the ongoing recovery.

It forecast underlying after-tax income of $100 million to $130 million for the year ended June, compared to the August forecast of $50 million to $100 million.

“For the full fiscal year 2023, we now expect international passenger numbers to be between 60 and 70 percent of pre-Covid levels and domestic passenger numbers between 85 and 90 percent,” said CEO Carrie Hurihanganui.

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“We have also adjusted our outlook, which now aligns with the International Air Travel Association (IATA) view that the global industry will recover to pre-pandemic levels by the end of calendar year 2024.”

Auckland Airport had a strong first quarter in New Zealand and internationally, particularly on routes to the Americas, South Pacific and Trans-Tasmania.

“The shape of the recovery is also consistent with what we are seeing globally, with travel picking up significantly in the UK, Europe and America following the easing of border controls,” Hurihanganui said.

While the opening in North Asia has been slower, she said seating capacity has increased.

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Five airlines will fly between Auckland and North America during peak season, offering up to 60 weekly flights and direct services to eight destinations including Honolulu, Los Angeles, San Francisco, Houston, Dallas, Chicago, New York and Vancouver.

Capacity to North Asia was boosted by the expansion of Korean Air’s services, while trans-Tasman travel was boosted by connections with China Airlines flying to Taipei via Brisbane and AirAsia X flying to Kuala Lumpur with a touchdown in Sydney.

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

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However, the outlook was not without ongoing turbulence.

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

“There also remains uncertainty about the path of reopening the Chinese market.”

Auckland Airport’s FY2023 capital expenditure guidance remained unchanged at $600-$700 million, with road, aerodrome and investment real estate projects ongoing alongside enablement

works for the combined domestic and international jet terminal.

The company continued to consult with industry aviation prices at Price Setting Event 4.

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