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From: "G Stolwyk" <>
Date: Mon, 23 Dec 2002 10:45:40 +1300

(Some reference has been made to a source from the other channel but this post can be read without it)


1. Introduction.
I have referred to AIA and SKC as TWINS, the reason I say that is because both have the ability to "print money".

Since its listing in 1998, AIA has carefully put plans into place with the aim of shielding itself from adverse conditions.

It took a few years to get up to that level but the concept was tested last year when irrespective of the Sept. 11 attack on NY, it still earned a very satisfactory increase of 21% profit.

It didn't take long for DONNER to understand that the non-aeronautical earnings of AIA are more important than the aeronautical earnings.

Page 1, date 7 Dec., mentions that the revenue of non-aeronautical activities is 49.8% of all revenue; this could grow to about 53.6% this year. Much of this will be due to an additional $15 mil. income from Retail.

Some of this will come from Investment property development and increasing rentals. One must remember that in this case costs and risk are very low.

Last year's increased operating margin on operations of 75.7% also bodes well. I calculate the NPAT margin as % of revenue a high 33.3% this year.

I now want to update last year's data from page 1 and use numbers from ABN_AMRO for the current year. I believe that within the stated NPAT, these numbers are quite feasible. Readers please take note their data are subject to their Disclaimers.

2. Revenues, year 2003
2.1 Non-aeronautical - $Mill.
Concession-Retail: 75.4
Rental Inv. Property: 28.5
Carpark 13.5
Utilities 6.4
TOTALS $123.8 mill. or 53.6% of all revenue.

My notes: The Concession-Retail is for 5 years. All property is prime quality. Rentals from Investment Property were $21.6 mill. last year and this division is becoming increasingly important. Items: Commercial development has 220 ha; Retail development has 6 ha and the Business park has 12 ha. available.

2.2 Aeronautical - $Mill.
Airport Dev. Charge: 35.6
Airport dues (airfield income): 56.4
Terminal Service Charges 15.3
TOTALS: $107.3 mill. or 46.4% of all revenue ($231.1 mill)

AIA has a "Dual Till" policy: where possible, no cross-subsidies.



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