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Wellington Airport posts 4.8% drop in 1H profit on fewer domestic flights

Wednesday 12th November 2014

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Wellington International Airport, which is two thirds owned by Infratil, posted a 4.8 percent drop in first half earnings, reflecting fewer flights to Auckland and Queenstown.

Earnings before interest, tax, depreciation, amortisation, asset revaluations and payments to Infratil declined to $40.4 million in the six months ended Sept. 30, from $42.5 million in the year earlier period, the Wellington based company said in a statement. International passenger numbers rose 2.2 percent while domestic passengers slipped 2.3 percent, reflecting reduced Auckland and Queenstown capacity, the company said.

The airport and Wellington City Council have $350 million plans to extend the capital's only runway to attract more long-haul international Asian and North American routes as the domestic market grows increasingly competitive. New Zealand's domestic routes are dominated by the nation's carrier Air New Zealand, which has an effective monopoly on the more regional routes. Yesterday the airline ditched seven regional routes, including three operating out of Wellington, blaming the financial burden of maintaining its regional fleet. 

Last year Jetstar, the discount airline of Australian Qantas, dropped its Wellington to Queenstown route after Air NZ boosted capacity on the same service, and has since seen its local market share shrink to 20 percent in the year ended June, from 22 percent a year earlier.  

The company's revenue from landing and terminal charges, which make up 58 percent of total revenue, fell 4.5 percent to $30.9 million, while revenue from retail and trading activities was little changed at $16.9 million and revenue from property income edged up 1.6 percent to $5.7 million, the company said.

Infratil, the listed infrastructure investor, clipped a $38.2 million payment from the airport, up from $35.3 million a year earlier. 

Wellington Airport's NZX listed bonds, which carry a 6.25 percent coupon and mature in May 2021 were unchanged at $104.639 per $100 face value at a yield of 5.4 percent. 

Shares of Infratil slipped 0.2 percent to $3.085 and have gained 36 percent since the start of the year. 


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