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Christchurch Airport Financial Results

28 August 2018

Christchurch Airport reports a financial year 2018 (ending 30 June 2018) which saw passenger numbers reach a record 6.87 million (up from 6.57m).

Long-haul passenger numbers lead the way with growth of 17% year on year, trans-Tasman passenger numbers grew 5% and domestic passenger numbers grew 4%.

Average airline charges per passenger at Christchurch fell 8.4% to $11.11 ($12.13 the previous year).

Christchurch Airport reset its aeronautical charges effective 1 July 2017.

Total reported revenue grew 10.8% to $236 million ($213m prior year), operating expenses fell 2.3% to $67 million ($69m prior year) and NPAT grew 37% to $89 million ($65m prior year).

The Board declared annual dividends of $40 million, up 5.5% ($38m prior year).

Chief Executive Malcolm Johns says the strategy reset the company undertook in 2014/15 has begun to produce tangible results.

“All parts of the business are now showing pleasing commercial maturity in the way we are building our business, enhancing customer journeys and being great kaitiaki focused on safety and sustainability,” he says.

In the past year, international visitor arrivals at Christchurch grew 8.5% compared to the national growth rate of 3.9%.

Australia grew 7.8% (national growth was 1.4%), China grew 25% (national growth was 12.8%), UK grew 5.2% (national growth was negative 3.7%) and the United States grew 11.8% (national growth was 2.9%).

“In terms of transit points to and from the South Island, the three key Tasman airport hubs of Melbourne, Sydney and Brisbane have been gaining more market share than Auckland for the past few years and we saw this continue in FY18,” says Mr Johns.

“Australian hubs have more connections and more competition for traffic. This is leading to many markets finding it more economic and more convenient to hub via Australia into and out of the South Island.

Singapore is a great example - more than 70% of the FY18 growth in international visitor arrivals between Singapore and Christchurch (+19%) has come from Singaporeans transiting through Australia to get to/from the South Island.”

Property income accounted for 19% of the airport company’s total revenue in FY18 and developing vacant land continued, with the company securing Bunnings Warehouse as an anchor tenant for a new trade retail precinct (called Harvard Park) at the northern end of the airport campus.

Construction will start in FY19.

The airport company invested around $85 million in new land and buildings during the financial year, ending the year with 98% of property leased with a weighted average lease term (WALT) of 6.5 years (up from 6.45 years).

“Developing our vacant land in a way which services those wanting to be located around the airport, in a way that builds shareholder returns and the company’s value, has been a key focus for the past few years,” says Mr Johns.

“The only disappointment for us in FY18 was the delay in the contractor completing construction of Novotel Christchurch Airport.

We do not expect this delay to have a negative financial impact on the airport company, however the hotel is a game changer for us as we service the strong growth in early morning and late night Tasman flights (set to grow by more than 10% over the next year). Our focus is on working with the contractor to complete construction so we can open the hotel and welcome visitors.”

The Chief Executive says the extraordinary result is a tribute to the Christchurch Airport team.

“The whole team has done a fantastic job over the past few years. From where we were in FY14, they have grown the business against the backdrop of a city still building its visitor infrastructure.

They have had the courage to have honest and hard conversations, they have self-imposed solid strategic and commercial processes to step-change the business, at the same time maintaining the number one position for airport service quality across Australia and New Zealand - plus they haven’t taken their eye off safety or sustainability outcomes.

I’m super proud of them.”

 

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