Wellington Scoop

Wellington Airport’s profit up by 81% to $16.2m; 5.4m passengers in a year

Report from BusinessDesk
Wellington International Airport, which the Commerce Commission deems is extracting excessive profits, released its annual results today, showing that its net profit rose about 81 per cent to $16.2million in the 12 months ended March 31.

The airport, which is 66 percent owned by Infratil and 34 percent by the Wellington City Council, reported that its total revenue climbed 6.8 percent to $106 million, of which landing and terminal charges rose 9.8 percent to $62.6 million. Revenue from property rent and lease income was little changed in the latest year at $10.8 million and retail and trading activity sales rose to $32.8 million from $31.6 million.

Revenue from Air New Zealand, Qantas Airways and Virgin Australia rose 20 percent to $62.2 million, which the airport said included about $2.2 million it charged airlines as a noise levy.

A spokesman said that backing out the impact of the levy, adjusting for the lack of international departure fee and taking into account the increase in passenger numbers, revenue from airlines only rose about 1.5 percent in the year.

Passenger movements rose to 5.4 million from 5.2 million a year earlier. Domestic passengers rose to 4.6 million from 4.47 million and international increased to 727,000 from 718,000. Total aircraft movements fell to 99,998 from 100,909.

The airport’s preferred performance measure is earnings before interest, tax, depreciation, amortisation and fair value movements, which rose to $82.9 million in the last 12 month period, from $75.5 million a year earlier. The increase in EBITDAF was made up of a $3.4 million increase in aeronautical charges, $1.2 million of passenger services income and $2.1 million for air noise mitigation.

In February, the Commerce Commission released its final assessment of returns for the airport, which it concluded would be between $38 million and $69 million more than it needs to be for a reasonable return between 2012 and 2017.

The airport disputes the regulator’s methodology, saying returns were “well below the commission’s benchmark,” while its per-passenger charges were at the low end of the range of its peers.

The Board of Airline Representatives New Zealand, which represents 20 airlines including Wellington airport’s three biggest customers, said today that the airport “needs to come under a more effective form of price regulation.”

The airport paid a dividend of $8.8 million to the council in June last year and what is called a subvention payment of $30 million to Infratil subsidiary NZ Airports.

Infratil’s shares fell 1 percent to $2.42 and have gained 7.5 percent this year.