Auckland Airport numbers impress

Auckland Airport has again impressed commentators with its latest monthly traffic updates.

Craigs Investment Partners broker Chris Timms says the prospect of a weaker dollar should help the company further in the future.

International passenger numbers - excluding transit passengers - were up 7.6% at Auckland Airport in April.

Passenger growth occurred across all regions, with strong improvement in Tasman passenger loadings.

Mr Timms said the top 10 arrivals showed an interesting trend.

Top of the list were New Zealand passengers, followed by those from Australia, China, United States, United Kingdom and Japan.

The prospect of the Reserve Bank cutting interest rates perhaps as early as next month would mean a falling currency and increased interest in New Zealand as a holiday destination from those top arrival countries.

The dollar had been upward of UK50 pence for a long time but yesterday it was under 47p.

''Any move down in interest rates will make New Zealand more attractive as a destination. Auckland Airport has weathered a period of a high dollar with good volumes and stable numbers.''

The Queenstown Airport numbers also impressed, he said.

Auckland Airport owns a share in the Queenstown facility.

Queenstown's international passengers were up 25.2% in April with growth across all Tasman routes.

Domestic passenger numbers also improved with a 4.8% increase.

Total passenger movements at the airport regularly exceeded 100,000 on a monthly basis with six of the last 12 months exceeding 120,000 passengers.

In the financial year to date, 350,832 international passengers had passed through Queenstown Airport compared with 275,209 in the previous financial year to date, Mr Timms said.

In a rolling 12-month total, more than 384,000 passengers had gone through the airport, a 27.6% increase.

However, while Mr Timms rated Auckland Airport as a ''world-class facility'', there were some concerns about possible regulation.

The company was covered by nine analysts with one having a buy recommendation, two holding and six recommending selling shares.

Any company or industry having monopoly-like characteristics would be under constant regulatory scrutiny and this was the case for Auckland Airport.

Electricity distribution companies had received some regulatory attention recently but the Commerce Commission purposely left airports off the revision schedule instead of dealing with them at the same time, he said.

''In our view, the reason for looking at airports separately is the commission is considering whether airports need an incentive beyond the current approach to invest in regulated terminal assets, as the investment will also benefit the airport's dual business.''

Craigs thought there could be more added regulatory scrutiny from the commission in the future, which could constrain the future earnings growth of the company and cause short-term share price weakness.

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