- The Company’s revenue was adversely impacted in the initial months of 2020, with a very low number of domestic passengers and almost negligible international flyers.
- As the pandemic continues to revisit other parts of the world, AIA expects an impact on its revenues this year as well.
- The Company expects a steady recovery from early 2022 and continues to focus on improving its critical infrastructure assets.
It will release its FY21 results on 19 August, followed by a webcast for the analysts, as well as media.
All its stakeholders along with the market are curious to know if the Company has regained its lost trajectory and will deliver a solid performance for FY21.
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Lacklustre interim performance due to the pandemic
In its 1H FY21 results ended 31 December 2021, the Company saw a challenging time due to low passenger turnout because of the pandemic. AIA reported a revenue of NZ$131.5 million and PAT of NZ$28.1 million, which were down by 64.9% and 80.9%, respectively. It suffered a net loss after tax amounting to NZ$10.5 million.
As compared to the previous six-month period ended 31 December 2019, the total number of passengers declined to 2.8 million, down by 73.4%, i.e. domestic passengers dipped by 44.6% to 2.6 million, while international passengers (including transits) fell to just 187,003, down by 96.8%, during the said duration.
Moreover, the Company also saw a decline in its revenue from hotel operations.
AIA undertakes significant steps in its overhauling
To reposition itself, Auckland International Airport undertook numerous significant steps like reducing its core operating expenses and scaling back its key infrastructure expansion programme. Meanwhile, it continues to focus on improving its critical infrastructure assets like roads and runways.
AIA’s commercial property business comes as a silver lining
However, with the successful stemming of the pandemic within its shores by the NZ government, the domestic travel market began showing signs of recovery, with domestic travel reaching 65% of the pre-pandemic level.
It is pointed out that while domestic travel was recovering, one segment of AIA which posted strong results was its commercial property business. Driven by rental growth, its revenue from commercial property rose by 2.4% to NZ$47 million, for the six months period ended 31 December 2020.
Moreover, the Company has many significant commercial developments in its pipeline, which would value more than NZ$223 million on completion.
Opening of quarantine-free travel between Australia and Cook Islands
With the opening of the two-way travel bubble with Australia in April 2021,( which has been paused since 23 July for eight weeks), AIA got a boost as there was a surge in its international passengers, plus domestic travel also increased (including transits).
As per reports, international passengers were up 114.0%, and domestic passengers were up by 5,586.3% in April 2021 as compared to April 2020, which was affected by the pandemic.
Moreover, international travel got a boost when the NZ government announced quarantine-free travel to the Cook Islands in May 2021.
Anticipation of a steady recovery in 2022 leading to an increase in AIA's revenue
AIA had recently provided a trading update, wherein it has stated that the recent community outbreaks in Australia and the prevailing uncertainties would undoubtedly impact its revenue, thereby expecting a loss after tax to be around $35 million and $55 million for FY21.
However, Auckland International Airport anticipates a steady recovery in early next year, as it anticipates a retail income between NZ$25 million to NZ$35 million in FY2022.
With the ramping up of the vaccination programme in the coming months, AIA is anticipating a bounce in trans-Tasman traffic and a steady return of long-haul international travellers.
On 12 August, Auckland International Airport was up by 0.98% at NZ$7.23, by the end of the trading session.