Auckland International Airport’s half-year net profit rose 58%, but the country’s biggest airport says New Zealand is lagging behind when it comes to growth compared to other international airports.
While an appetite for international travel helped counteract “subdued” domestic aviation market conditions, the airport said on Thursday Air New Zealand’s 84% market share in the domestic aviation market was a cause for concern.
Auckland International Airport’s revenue rose 13% to $499.9 million in the six months to December 2024. Excluding interest income, revenue for the half-year period was up 11% to $484.2 million.
Actual net profit came in at $187.3 million for the six months to December 31, 2024, a 58% increase from a year earlier. Underlying net profit after tax was up 2% to $148.1 million.
Auckland Airport will pay shareholders an interim dividend of 6.25 cents per share.
The airport reported a 2.3% jump in the total number of travellers in the six months to December, bringing it to 9.4 million travellers in total.
Of those travellers, domestic was up 0.1% to 4.27 million, while international visitors (including transits) rose 4.1% to 5.19 million.
Auckland Airport Chairwoman Julia Hoare said the airport had achieved its busiest month for international travel since 2019 in December 2024 when over one million international passengers passed through the airport.
The 5th of January, when 36,000 international travellers flowed through the terminal, marked the busiest day the airport had experienced in more than five years.
“A clear trend over the summer period is that New Zealanders haven’t lost their love of international travel, with more Kiwis travelling offshore than ever before, up 5.5% to 2.42 million during the half-year compared to the same period last year,” Hoare said.
Despite these “bright spots” Hoare said growth in the international market had been softer than expected, particularly for inbound visitors.
“The global market to attract tourists is highly competitive, and that’s making it more challenging for New Zealand to secure additional airline routes and services,” she said.
Chief Executive Carrie Hurihanganui described competition for available international airline capacity as “tough” in the airport’s half-year results.
“Of note, we are seeing the pace of growth accelerate in other key markets, with New Zealand currently lagging behind. For example, at some Australian airports, airline seat capacity is now exceeding 2019 levels, while New Zealand is sitting further behind in the recovery with international capacity at 89% overall for the half-year period compared to 2019,” she said.
“A key factor driving this is Australian travellers looking beyond New Zealand and choosing to visit destinations in Asia for their holidays.”
Domestic capacity was flat at 88% during the six months to December 2024 and Hurihanganui said domestic capacity had been “constrained” by Air New Zealand’s fleet issues as well as challenging local economic conditions.
“We acknowledge Air New Zealand is facing difficult fleet challenges which is constraining their ability to grow. However, we are concerned that the 84% market share they hold over New Zealand’s domestic aviation market is not meeting the needs of consumers or regional communities,” she said.
Hurihanganui said questions needed to be raised about the competitiveness of the domestic aviation sector, with a focus on regional routes.
“Left unchecked, the benefits of tourism and travel to New Zealand’s regions will continue to be held back by fewer planes flying and lack of competitive airfares,” she said.
Auckland International Airport is still working through its $6.6 billion infrastructure upgrade and Hurihanganui said on Thursday the airport’s new integrated domestic terminal programme was now 31% complete.
The airport’s new transport hub had been completed and was open to travellers while the airport’s airfield expansion had advanced 66.5% alongside major stormwater improvements.
Hurihanganui said the airport’s upgrades and expansion will allow it to support “about $55 billion in economic value from travel and tourism and $41 billion in trade” by 2032.
“As the airport’s infrastructure development programme continues to progress, Auckland Airport is reconfirming its guidance on capital expenditure of between $1 billion and $1.3 billion for the year,” the company said.
The airport also announced on Thursday that it was “narrowing its guidance” and now expects a full-year underlying profit after tax, excluding any fair value changes and other one-off items, of between $290 million and $320 million.
This is up from the range of between $280 million to $320 million that the airport previously expected for the 12 months to June 2024.
Hurihanganui said despite the subdued market conditions in the near-term, Auckland Airport remained optimistic about the future.
The airport’s share price was down almost 1.5% on Thursday morning following the release of the results.
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