Auckland International (NZX:AIA): How would it perform in its interim results?

Highlights

• Auckland Airport had remained resilient amid tough months of uncertainty and constant disruption. 
• The Group has committed to secure infrastructure projects with construction to be aligned with aviation’s recovery.
• AIA is due to release its interim results for the 6 months ended 31 December 2021 on 24 February 2022. 

Auckland International Airport Limited (NZX:AIA; ASX: AIA), the biggest commercial airport of NZ, had remained resilient amid tough months of uncertainty and constant disruption. The Group followed the strategy of Respond, Recover and Accelerate when COVID-19 struck in 2020. 

AIA has continued to manage its operations, support recovery of the aviation sector and travel restart while maintaining core infrastructure resilience and future development programme. 

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FY21 performance 

AIA witnessed a 50% drop in revenue to $281 million and a 122% decline in underlying profit to a loss of $42 million in FY21.  

The Group’s international business had begun to pick up with the opening of travel corridors with the Cook Islands and Australia, but COVID-19 outbreaks brought impromptu closure of these developments. 

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Nearly 560K travellers landed or deviated via the international terminal in FY21, down from 8 million in FY20. AIA’s property portfolio persists to fare powerfully with swift growth in e-commerce and operational changes in the logistics sector. 

November traffic Preview 

AIA provided the monthly traffic update preview for November last month. The Group’s total passenger volumes fell by 89.1% in November 2021 on pcp. Domestic passenger volumes were down by 93.9%, transit passengers down by 72.1% and international passengers were up by 7.1% in the month on pcp. 

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Both international and domestic flight and passenger movements were limited in November with Auckland staying at Alert Level 3 all through November 2021. International passengers grew in the month as RSE workers arrived from Vanuatu, Samoa and Tonga. 

The Group also launched a retail bond offer in November where it provided nearly $100,000,000 of the 5-year fixed rate bonds to NZ retail and institutional investors. 

AIA’s progress on infrastructure projects 

AIA has committed to secure infrastructure projects with construction to be aligned with aviation’s recovery. The team is advancing with its intention to develop a new domestic hub unified into the eastern end of the international terminal. The Group would need nearly 5-6 years to complete it once the construction begins.  

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AIA has also been working with airlines, airports and agencies to create a set of proposals for the Government to design a risk-based travel system without any quarantine to provide for airlinks between NZ and other low-risk countries. 

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On 21 January, at the time of writing, AIA was trading at $7.4, down 0.13%. 

Bottom Line 

AIA remains optimistic on returning to growth and has adopted conversative planning assumptions. The International Air Travel Association has forecasted global travel to recover in 2023 but the airline perceives that the full recovery will take more time. 

AIA is due to release its interim results for the 6 months ended 31 December 2021 on 24 February 2022. 

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)