Wellington Airport profits rise on passenger, aeronautical income growth

Wellington International Airport, the Infratil-controlled capital city gateway, has increased its profits by 6% as aeronautical and passenger services income grew year on year.

After accounting for a subvention payment to 66% owner Infratil, profit rose to $55 million in the year to March from $52 million a year earlier. Revenue climbed 5.3% to $119.6 million.

The payout to shareholders fell slightly from last year - Infratil received $38.9 million in the form of a subvention payment, down from $39.5 million, while 34% shareholder Wellington Council received a dividend of $12.1 million, down from $13 million in 2016.

The capital city's airport company has almost completed the first stage of a $300 million capital investment programme that has seen the domestic terminal expanded and upgraded, work start on a multi-level transport hub and a 4-star hotel and plans for an expanded international terminal. The programme includes plans to extend its runways to accommodate larger long-haul aircraft, although that has become bogged down by objections to the plans from the New Zealand Airline Pilots' Association, and a Supreme Court appeal date is now awaited.

Earnings are "expected to continue to increase, reflecting investment in route development, new and expanded airport facilities and services, growth in passenger numbers and scheduled aeronautical charges," chairman Tim Brown and chief executive Steven Sanderson said in a statement.

Domestic passenger numbers rose 3.6% to 5.08 million in the latest year, while international passengers slipped to 888,427 from 897,316, the company said. Singapore Airlines began a direct service to Canberra last year that provides a new route to Singapore from Wellington. Aeronautical income rose 6.7% to $70.3 million and passenger services income rose 3.6% to $37 million. property and other income climbed 3.4% to $12.2 million.

Operating expenses rose 6.2% to $29 million while capital investment climbed almost 40% to $79.3 million.

The airport company attributed growth in domestic passenger numbers to break through the "milestone" of 5 million to Air New Zealand's introduction of larger aircraft on some domestic services and increased capacity on others. The biggest growth had come on the route between Wellington and Auckland and there had also been increases on regional routes including Jetstar flights to Dunedin and Nelson and additional Sounds Air Services.

International passenger numbers had levelled off following years of strong growth driven by new airlines, additional capacity and marketing of Wellington as a destination, it said.

Net assets rose 3% to $512.9 million, while debt rose from $295.1 million to $417.4 million.

(BusinessDesk)