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Auckland Airport announces $1.8B infrastructure spend by 2022

Thursday 8th June 2017

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Auckland International Airport announced plans to invest $1.8 billion in aeronautical infrastructure by 2022 and said over the next five years its average international passenger charges will reduce by 1.7 percent in real terms each year while domestic passenger charges will only increase by 0.8 percent per annum.

In nominal terms, however, average revenue on a per passenger basis is expected to be $22.98 in the current financial year and will rise to $23.50 by 2022. For domestic passengers, it is expected to be $5.73 this year and $6.57 in 2022. It is expecting total passenger numbers to rise from 19.8 million in the current financial year to 22.6 million in 2022. According to the company, its new prices for the 2018-2022 financial years will target a return on investment of 6.99 percent.

"We believe our prices are fair and reasonable given the significant investment we are making in long-term infrastructure and our charges remain only a small fraction of the overall cost of travel," said Auckland Airport chief executive Adrian Littlewood.

Among other things, the planned investment will provide three more contact gates for international aircraft, a new domestic jet terminal, the border processing area and public arrivals space will be expanded, the international check-in area will be upgraded and investment will be used for public transport, roading, and walking projects.

The company also said over the next five years it will take significant steps toward opening a second runway it currently expects to be required by 2028. Based on an opening date of 2028 it expects earthworks to start around 2020 or 2021. If the construction of a second runway is confirmed, it will introduce a runway land charge of $1.19, excluding GST, per passenger at that time, it said.

The new prices will apply to airlines operating at Auckland Airport between July 1, 2017, and June 30, 2022.

Its shares last traded at $7.30 and have climbed 17 percent this year.


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