Daily ShareChat: Auckland Airport

By Jenny Ruth

Friday 4th March 2011

Auckland International Airport's underlying first-half earnings, up 14% to $61.5 million, were slightly ahead of his forecast and above consensus forecasts, says Rob Bode, an analyst at First NZ Capital.

"The highlight was a strong performance from AIA's retail concessions with the performance accelerating over the later part of the half and into the second half," Bode says.

The airport is investing heavily in air service development marketing and promotion to drive growth, he says.

"International capacity additions at Auckland of over 750,000 seats per annum have been announced, equating to a little over 7% additional capacity."

This alone should underpin traffic growth of about 5% over the second half and a further lift of 5% in the year ending June 2012 before allowing for any boost to traffic from the Rugby World Cup.

"We think AIA's outlook for the next two to three years remains favourable," Bode says.

"The outlook is underpinned by increasing exposure to fast-growing Asian tourism markets, the potential recovery in the key UK and US inbound markets and the eventual introduction of B787 aircraft which should be highly beneficial for AIA's long-haul routes," he says.

"In the near term, however, we acknowledge the potential risk to travel demand from the Christchurch earthquake and potential for rising oil prices to crimp demand."

Rating: Neutral.

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