Auckland Airport Annual Meeting

The Auckland Airport, New Zealand annual meeting was held on October 27 at the Telstra Clear Pacific Events Centre in Manukau City.  Chair of the Board Joan Withers addressed airport shareholders and discussed the highlights of 2011 and the outlook for the next 12 months.  Shareholders were also given an update on the company since June 2011.
Airports International details the highlights of Ms Withers’ address:
 
“Despite the destructive natural events and the numerous challenges that have buffeted travel and tourism in the last 12 months, Auckland Airport was able to deliver an excellent result for the 2011 financial year.  We broke out of a period of relatively flat profitability, delivering a 15.1% increase in underlying profit to $120.87 million.
“This result was well ahead of the guidance we issued at the end of the 2010 financial year.  Delivering that strong profit uplift, together with excellent passenger volume growth, is of course of benefit to our shareholders, but also ultimately for New Zealand’s economy.  The strength of the announced underlying profit was driven predominantly by the increase in total income to $397.72 million, up 9.5% on last year, with our retail business in particular performing strongly.
“Key to the year’s performance has also been a belief that Auckland Airport can grow passenger volumes faster than the organic growth of the market.  Simon [Moutter, CEO Auckland Airport] and his team, particularly Glenn Wedlock, our GM Aeronautical Commercial, have really shifted the paradigm in relation to route development.  Auckland Airport’s specific approach in the past couple of years, has been to target airline operators and persuade them to service routes we have researched and determined as providing a sustainable opportunity.
“The commencement of a number of new air services to Asia, including a direct China Southern Airlines service between Auckland and Guangzhou, and a new Jetstar service between Singapore and Auckland, were particularly important successes, given that Asia and in particular China is now driving much of the growth in global travel demand.  I want to acknowledge the collaboration and co-operation that has assisted our route development initiatives this year. We have received fantastic assistance from the PM, His Worship the Mayor Len Brown, Immigration Minister Jonathon Coleman, Tourism NZ and a number of other key government departments.
“Our results this year were also built on a foundation of service excellence.  2011 saw Auckland Airport complete a hat-trick in the global Skytrax awards, being recognised as one of the world’s ten best airports for the third year in a row.”
 
Ms Withers went on to illustrate how the financial results demonstrated Auckland Airport’s “resilience as a business”.  Commenting on the last quarter, the Chair said:
For the first three months of this, the new financial year, international passenger movements at Auckland (excluding transits and transfers) were up 6.5% to 1.73 million.  Domestic passenger movements at Auckland were flat at 1.54 million.  Total aircraft movements were flat for the three-month period.
“As for the Rugby World Cup 2011, our primary aim at Auckland Airport was to ensure that the first and last impression of New Zealand for the estimated 85,000 visitors was part of a fantastic tournament experience for each player, official and fan – win, lose or draw.  Just as importantly, we viewed the event as an important opportunity to deliver enduring benefit in the global marketing of New Zealand as a destination.”

 
Ms Withers then told the shareholders of the airport’s plans for the next 12 months:
“Your board will continue to focus on ensuring that best practice standards of corporate governance are met, that management is delivering on performance and value creation targets, and that relationships with key stakeholders are strengthened.
“The 2012 financial year is going to be another big 12 months for Auckland Airport.  We intend to develop, alongside our airline partners, a clear pathway for uncapping further long-term visitor growth potential.  This will involve resolving some of the timing challenges for the delivery of a better domestic terminal and for the northern runway.  It will also involve the development of better commercial frameworks to meet individual airline needs, and continuing to support of airline growth ambitions on new or expanded air services.
“The board and management team is focussed on achieving a successful 2012 financial year and at this stage we expect net profit after tax (excluding any fair value changes and other one-off items) to be in the $130 millions.  We make special note of our caution around, any potential long-term implications from the existing volatility in global financial markets.
“Looking even further ahead than next year, in our annual report we have outlined a set of longer-term aspirations for our business.  They definitely aren’t a guide to the market, but they do give shareholders a glimpse of the scale of the ambitions that we collectively have for this business.  Ultimately, our aim is to build a great New Zealand business recognised as a world-leader in creating value from modern airports.
“The world is continuing to change rapidly, and we will remain focussed as a business on making the most of the opportunities that those changes may offer.”