Queenstown Airport boosts profit 25%

A sustained period of outstanding passenger growth has again underpinned Queenstown Airport Corporation’s (QAC) strong financial performance for the 2014/15 financial year.

The company’s Net Profit after Tax was $8.3 million – up 25 per cent from the previous year’s profit of $6.6 million.

Total revenue increased 13 per cent to $24.8 million and was driven by strong passenger volumes, greater retail spend per passenger, more car parking and improved commercial leasing revenues.  The uplift flowed to Operating Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) which increased by $1.4 million to $16.6 million.

Total passenger movements through the airport increased 12 per cent, setting a new record of 1.4 million passengers in the 12 months to June 2015.   The main contributors to this increase were strong trans-Tasman passenger growth, buoyed by the recommencement of Jetstar’s Gold Coast service, and domestic passenger numbers hitting the one million mark for the first time.  International passenger numbers were up 29 per cent to 398,000 while domestic passengers rebounded, up 6 per cent to 1,001,000.

In line with QAC’s financial results, Board Chairman John Gilks was pleased to report the company’s largest ever dividend of $5.2 million to its two shareholders, up 19 per cent from $4.3 million last year.

“This performance has helped propel us to a strong year-end result and we are delighted to deliver our largest ever dividend to our shareholders and the community,” Mr Gilks said.

The record dividend will see 75.1% ($3.9 million) payable to majority shareholder Queenstown Lakes District Council and 24.9% to Auckland International Airport Limited.  The Queenstown Lakes District Council return equates to around $168 per rateable property in the district.

To manage the demands of growth and improve passenger flow, QAC completed several key infrastructure projects during the year.  These included a public carpark expansion, a temporary ‘pop-up’ structure to expand the international arrivals area for winter 2014 and a new international terminal for winter 2015 which has doubled the size of the airport’s international operations and provided a superior experience for international visitors.

The commercial and retail improvement programme QAC embarked on two years ago continues to reap rewards, with the rate of revenue growth from those activities exceeding that of aeronautical.  The speed and willingness with which operators have taken up new space has also demonstrated the popularity of the airport as a retail destination.  New offerings in the past year include Airspresso Café and Bar (opened July 2014), the Manaia Passenger Lounge (October 2014) and TravelPharm (December 2014).

Mr Gilks said the appeal of Queenstown and the surrounding region as a domestic and international travel destination remains strong.

“We are very grateful for the ongoing support of our four commercial airlines – Air New Zealand, Jetstar, Qantas, and Virgin Australia – and their global airline partners.  Their forward schedules demonstrate a strong desire to meet continuing demand, grow sustainable capacity and improve connectivity to ultimately provide inbound and outbound travellers with more choice and flexibility.  In particular, Air New Zealand’s commitment to adding more than 110,000 additional seats between Queenstown and Auckland in FY2016 is extremely positive.

“We will continue to work closely with aviation and tourism partners to identify growth opportunities for the future, particularly in off-peak months, and ensure our infrastructure is developed to meet demand.

“Growth projections remain very strong and we are mindful that there will be a need to manage this growth in line with community expectations.  We see the need for providers in the region to continue to invest in the region’s infrastructure and tourism facilities to maintain the quality of visitor experience and accommodate the anticipated growth from new and emerging long haul markets.”

Mr Gilks said that QAC continued to be committed to working with its aviation and tourism partners to identify high quality growth opportunities and ensuring that the airport is equipped for the future and can provide the best possible visitor experience.  Key growth opportunities include

• Planning to introduce evening flights to increase capacity and provide greater accessibility for international flights
• Creating a new aviation precinct with the proposed acquisition of approximately 16ha of land (Lot 6) from developer Remarkables Park Limited
• Working closely with local government and businesses in Queenstown to encourage investment in visitor infrastructure to ensure the destination maintains quality and the infrastructure keeps pace with the growth QAC anticipates
• Continuing the rollout of QAC’s 20-year noise mitigation works plan for acoustic treatment packages in the homes identified as most affected by aircraft noise.

“Our strategic alliance with Auckland Airport, New Zealand’s largest travel gateway, continued to deliver long-term value, providing improved connectivity and resources otherwise not available to us. This has been reflected in our passenger growth and helped us improve operational and cost efficiencies,” Mr Gilks said.

“Looking ahead, we remain confident about the sustainability of trans-Tasman growth – we anticipate strong future passenger growth but acknowledge it may not continue at the record levels seen during 2014/15.”