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Auckland Airport shares on the sup and up

Friday 26th September 2003

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Auckland International Airport soars despite industry hardships. Looking at its share price performance, it's as if the twin shocks of Sars and the war in Iraq never happened.

The shares have rocketed to above $6.70 from about $5.40 in January and have delivered an 18.8% return on investment for the 2003 financial year. Shareholders would have reaped an impressive 32.1% return on their investment over three years, according to the latest LEK shareholder scorecard.

The company reported an after-tax profit up nearly 17% at $83.5 million, on revenue of $234.7 million, clearly demonstrating resilience to adverse international events and the financial effects of the demise of Ansett Australia on Air New Zealand. New chief executive Don Huse will be further heartened that passenger numbers are improving as the impact of Sars recedes.

The now unlikely prospect of a Qantas-Air New Zealand alliance was also not expected to have any effect on AIA's revenue. This is largely because the company's revenue is mainly passenger driven and not airline driven.

In any case, AIA is likely to benefit from Virgin Blue's arrival in New Zealand, with increased landing fees. With international seat capacity expected to increase 36% over the summer the immediate outlook promises an improved profit again next year.

The only question is whether the company can cope with the impending arrival of the next generation of passenger aircraft, the 650-seat Airbus A380 "superjumbos."

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