AIA 2017 Regulatory Disclosure

Media Release l 30 November 2017
2017 regulatory disclosure released
Auckland Airport has today released its regulatory performance summary for the
2017 financial year, as required by Part 4 of the Commerce Act 1986. This year’s
disclosure represents the last 12 months of the FY13–FY17, five-year, pricing
period.
Chief Financial Officer, Phil Neutze, says, “Our latest financial disclosure confirms
that Auckland Airport is focused on providing great outcomes for our customers
and, consistent with the purpose of the legislation, providing an accurate and
meaningful summary of performance across our aeronautical activities.”
“Our financial disclosure demonstrates that over the past five years we have
adapted to changing market conditions, and that we have struck the right balance
between investing to support sustainable tourism growth in a changing and
dynamic market, delivering a capital investment programme that responds to
demand, meeting and exceeding customer expectations, operating efficiently and
effectively, and earning a fair and reasonable return.”
“The disclosure also confirms the current airport regulatory regime is working by
providing transparency in relation to the real benefits Auckland Airport is
delivering for its airline customers, passengers, investors, Auckland and New
Zealand,” says Mr Neutze.
Ends
Information for media: the FY17 regulatory performance documentation is
available online: corporate.aucklandairport.co.nz/investors/regulation
For more information, please contact:
Auckland Airport Public Affairs
+64 27 406 3024

---

Annual Information
Disclosure
Regulatory Performance Summary
For the year ended 30 June 2017

Auckland International Airport Limited 1
Chair and
Chief Executive’s report
In 2012, Auckland Airport set its
aeronautical prices for the 2013-
2017 financial years (“PSE2”)
following consultation with airlines.
Our aim was to set moderate prices
for airlines that would enable us to
deliver quality experiences for our
passengers and fair returns for
our investors.
Since then, we have sought to
meet or exceed our growth targets
while delivering good outcomes
for passengers, airlines and
other stakeholders at our airport.
Auckland Airport is confident that
we have delivered on the objectives
we committed to in 2012.
Over the past five years, we have
seen unprecedented growth in
connectivity to, from and through
Auckland Airport, evidenced by a
36% increase in total passengers
over that time. There are now 30
international airlines operating here,
up from 18 airlines in 2012, with
strong growth in the number of
flights and seats connecting New
Zealand’s domestic destinations.
We have worked hard to respond
to this significant upsurge in growth
– investing 80% more than forecast
for the past five years on our core
aeronautical infrastructure.
To help accommodate the ongoing
increase in passengers and aircraft
using Auckland Airport, we are
now spending more than $1 million
every working day on our core
airport infrastructure. During the
2017 financial year we progressed
the upgrade of our international
terminal, further developed our
airfield, and prioritised transport
improvements around the airport
precinct. We also made significant
progress on our medium-term
planning in consultation with the
aviation industry, and released
our plan to invest around another
$2 billion in aeronautical capital
expenditure over the five financial
years to 2022.
Providing quality services to our
passengers and airlines is a key
objective for Auckland Airport,
and we maintained our customer
focus over the past five years. We
acknowledge that the combination
of growth, ageing assets, and major
construction works put pressure
on our facilities at times over PSE2.
Faced with these challenges, we
worked hard to address issues
that arose, ensure that passenger
journeys through the airport were as
fast and efficient as possible, and to
minimise disruption for passengers
and airlines associated with our
ongoing construction programme.
Going forward, our significant
commitment to infrastructure
investment will ensure that we
can provide great quality services
for passengers and airlines well
into the future. We recognise that
the transition may not always be
smooth, but we are committed to
providing the best possible service
to our customers as we undertake
this major evolution of our facilities.
Auckland Airport’s regulatory
disclosures show that the
information disclosure regime
for airports, under Part 4 of the
Commerce Act 1986, is working.
We are focused on providing
great outcomes for consumers,
and ensuring that our disclosures
provide an accurate and meaningful
summary of Auckland Airport’s
performance over time. This
disclosure – the final disclosure
for the 2013-2017 pricing period
– demonstrates that we aim to
deliver real benefits for our airline
customers, passengers, investors,
Auckland and New Zealand through
proactively seeking improvements
over time and responding to
changing market conditions.
Implementation of our 30-year
vision to build the “airport of the
future” is now well underway. It’s
creating jobs, boosting tourism and
lifting our regional economy. We
are playing our part to maintain
New Zealand’s reputation as one of
the world’s great travel destinations,
and we look forward to continuing
to work towards our vision in the
coming 2018 financial year.
Sir Henry van der Heyden
Chair
Adrian Littlewood
Chief Executive

Auckland International Airport Limited 2
Investing in
sustainable growth in
New Zealand tourism
Auckland Airport plays an active role in growing
connectivity within and to New Zealand. We
believe that sustainably growing air connectivity
is a key part of operating a modern airport, and
contributes to improved short and long-term
outcomes for consumers.
We have continued to sustainably grow travel
markets to increase our air connectivity, which is
essential for a city and country reliant on tourism
and trade for its economic prosperity. Although
travel demand was relatively quiet at the time
we set prices in 2012, Auckland Airport has
experienced a period of unforeseen and rapid
growth since 2015.
This growth continued in the year to 30 June
2017, with the total number of passengers using
our airport increasing by 10.2% to 19 million.
Domestic passengers were up 8.9% to 8.6
million, international passengers (excluding transit
passengers) were up 11% to 9.7 million and
international transit passengers were up 16.8%
to 0.7 million.
Building on the capacity growth in recent years,
the 12 months to 30 June 2017 saw strong
growth in domestic connectivity, which included
Air New Zealand and Jetstar adding another
330,000 regional seats over the year. This
financial year also saw the launch of eight new
international routes, seven new international
airlines and a 14.5% increase in international seat
capacity.
We have maintained our support for the New
Zealand tourism industry in the 2017 financial
year, especially for the operators who provide
our international visitors with high-quality
experiences. We continued to work alongside
travel and tourism industry leaders throughout
the country, and we provided two grants
of $50,000 to support operators who offer
outstanding seasonal and regional tourism
products for visitors from China, Australia,
United States or India. We also joined with other
industry leaders to encourage the Government
to develop new and innovative ways to upgrade
tourism infrastructure.
Auckland Airport expects capacity growth to
continue into the future, albeit at a slower rate
than we have seen over the past few years.
international airlines
now operating into
Auckland Airport –
up from 18 in 2012
30
international
destinations now
serviced from
Auckland Airport
46
increase in total
passengers over the
past five years
36%
-
2013
0
10
15
20
2014
5-year actual CAGR 6.3%
5-year forecast CAGR 3.0%
Pax m
201520162017
Passenger growth FY13 – FY17
Price Setting Event 2 FY13-FY17 (“PSE2”)
ActualForecast

Auckland International Airport Limited 3
Delivering a capital
investment programme
that responds to demand
Auckland Airport is committed to ongoing
investment for the benefit of our city, country,
customers and investors.
Over the past five years, we have responded to
the unforeseen increase in aeronautical demand
at Auckland Airport by accelerating our core
airport infrastructure investment programme. We
have invested $522 million in capital investment
projects over this period, an 80% increase on
the forecast of $290 million when prices were
set and the demand environment was more
subdued. This large step-up in infrastructure
investment in the second half of the 2013-2017
pricing period plus the material increase forecast
over the next ten years will ensure we can
accommodate the passenger and aircraft growth
over the next 30 years, as well as the increasing
traffic volumes around, to and from the airport.
In the 12 months to 30 June 2017, Auckland
Airport undertook its most significant
infrastructure upgrade programme ever, playing
our part in support of strong and ongoing growth
in New Zealand tourism. We progressed the
major upgrade of our international departure
area, opening the new security screening
space in late June 2017. We also commenced
construction of the international terminal’s
Pier B extension, which will provide two
more gate lounges and additional airbridges
to accommodate the increasing number of
international aircraft using our airport. The first
new gate lounge and its airbridges will open on
Pier B prior to the 2017/18 summer
peak season.
We have also significantly expanded our airfield
infrastructure to better service international
aircraft during our busiest months. We built a
new taxiway and completed the construction of
a new international airfield stand, fully serviced
with fuel and other utilities. We progressed
the construction of a second, fully serviced
international airfield stand, scheduled for
completion prior to the 2017/18 summer peak
season, and made other upgrades to our
airfield stands.
In the 12 months to 30 June 2017, we also
progressed the design and planning approvals
needed to build our second runway, and have
advanced the concept planning of the new
domestic jet terminal.
Improving travel times and flows around the
airport precinct has also been a priority for
the company in the 2017 financial year. We
fast-tracked a number of planned roading and
transport upgrades on our own network in the
past 12 months, including upgrades to our
major intersections to improve traffic flows and
access to the airport. We also developed new
traffic management plans for use when the
airport roading network is particularly busy, and
continued to work closely with the New Zealand
Transport Agency and Auckland Transport to
advance roading and public transport solutions
for South Auckland and the airport precinct.
added to the airfield over
the last five years
+80,000m
2

opened new security
screening space as first
stage of international
departure upgrade
June 2017
invested in capital
expenditure projects
over the last 5 years
$522m
Aeronautical capital
expenditure FY13 – FY17
FY13
FY14
FY15
FY16
FY17
$50m$100m$150m$200m$250m
ActualForecast

Auckland International Airport Limited 4
Committed to
operating efficiently
and effectively
Auckland Airport is focused on operational
and capital efficiency in all aspects of our
performance. We continue to enhance our
terminals, airfield and the wider airport precinct to
create better and faster passenger journeys, and
to facilitate efficiencies for the benefit of
our customers.
A key focus is to maximise the utility of our
existing assets. This includes pursuing
innovation and striving for best practice
maintenance, management technology and
operational efficiency. We also work hard to
reduce operating costs per passenger over time,
which has occurred over the past five years.
We continued to make significant investments in
core technology infrastructure during the 2017
financial year to support efficient outcomes,
introducing new technology and upgrading
existing systems. This has provided greater
data gathering and analysis capability than ever
before, and we continue to share information and
insights with our airline customers and border
agencies through constructive and collaborative
working groups.
Over the 2017 financial year, we worked hard
to explore process efficiency options alongside
capital expenditure. For example, Auckland
Airport has a dedicated project team that
focuses on delivering airfield and terminal
efficiencies for the summer peak – identifying
planning and operational improvements to cater
for the seasonal aircraft and passenger peak
within the existing terminal and airfield footprint.
Auckland Airport continued to work closely with
government agencies during the 2017 financial
year to improve the efficiency of border services
for our passengers. In particular we worked with
the New Zealand Aviation Security Service to
improve processing times by installing a seventh
security screening machine in the international
departure area and improving the international
transit screening facility.
We remained focused on the importance of
biosecurity screening to New Zealand in the
past 12 months. We worked with the Ministry
for Primary Industries (MPI) to improve its
international arrival process, by introducing an
additional baggage X-ray machine, new detector
dog teams, and a new biosecurity area layout.
We also opened a Green Lane, constructed for
MPI by Auckland Airport, which helps deliver
faster processing times for New Zealand and
Australian passport holders who arrive in the
country and do not have any food or other
biosecurity risk items to declare.
Auckland Airport also values sustainable
operational, maintenance and construction
practices. A range of energy efficiency projects
were deployed in the 2017 financial year to
reduce energy consumption across the terminals
and airport precinct, and waste minimisation
activities substantially increased the rate of
landside and airside recycling.
mobile international
self-service check-in
kiosks installed
45
next generation
SmartGate Plus gates
installed to process
international arrivals
and departures
15
Operating costs per passenger
FY13 – FY17
FY13
FY14
FY15
FY16
FY17
$1.00$2.00$3.00$4.00$5.00$6.00$7.00
$5.88
$5.71
$5.73
$5.68
$5.58

Auckland International Airport Limited 5
Meeting and exceeding
customer expectations
During the 2017 financial year we remained
focused on our customers to ensure they had
safe and enjoyable journeys when travelling
through Auckland Airport. We delivered a number
of improvements across our terminals to help
provide the best possible passenger experience
during a period of significant change.
We made improvements to the check-in
process for the international terminal, installing
45 mobile international self-service check-in
kiosks, reconfiguring our international check-
in area to provide 13 more serviced counters,
and upgrading our back-of-house international
baggage handling system.
Auckland Airport recruited more than 60
Passenger Experience Assistants to help
passengers during our busy December and
January months, and additional Customer Service
Agents were recruited to proactively assist
travellers requiring assistance. We also expanded
our popular concierge service for international
passengers who value a personalised and
dedicated arrival facilitation service.
In the 2017 financial year, we continued to explore
ways to communicate with our passengers and
to understand their needs. This has included
the introduction of digital touchscreens across
our terminals to facilitate customer feedback,
as well as a significant upgrade to our Auckland
Airport mobile app and website to provide better
information and services to our passengers.
We also added new technology to monitor real-
time traffic movements across the airport precinct
so we can improve the journey time information
we provide through our mobile and
digital channels.
The reliability of our services was very good in the
2017 financial year, with high availability of our
runway, taxiways, stands, airbridges, baggage
systems and ground power units.
This year we introduced a new Drop & Ride
service which has reduced traffic volumes on
the inner airport roads and in the drop-off/pick-
up zones at the terminals and is a quick and
easy way to drop off friends and family for their
travel. We also introduced The Wait Zone for
domestic customers, a 30-minute free parking
option located just two minutes from the terminal
which helps keep traffic moving in the domestic
terminal’s drop-off/pick-up zone.
Auckland Airport has undertaken and advanced
the planning of a number of roading and transport
upgrades on our network, including upgrades to
our major intersections to improve traffic flows
and access to the airport. We also developed
new traffic management plans for use when the
airport roading network is particularly busy, and
continued to work closely with the New Zealand
Transport Agency and Auckland Transport to
advance roading and public transport solutions
for South Auckland and the airport precinct.
In addition, in the 2017 financial year we
continued to deliver on our wider commitments to
environmental sustainability, health and safety, and
being a good neighbour to those communities
located adjacent to the airport – including through
Ara, our airport jobs and skills hub. In the 12
months to 30 June 2017, Ara organised 1,342
training opportunities and placed 190 people
into employment – 156 of them living in South
Auckland and 74 of whom were previously
receiving a central government benefit.
touchscreen kiosks
installed to receive real time
feedback at key stages of
the customer journey
23
Passenger Experience
Assistants recruited to
help passengers during
the summer peak
60+
People placed into
employment in FY17
through Ara, Auckland
Airport’s airport jobs and
skills hub
190
Reduction in employee
recordable injury rate in
FY17
22%
individual satisfaction
ratings received from
real time customer
feedback kiosks in
FY17 with an average
score of 3.91 out of 5
549,260
Passenger satisfaction
FY13 – FY17
2013
2014
2015
2016
2017
5.04.03.02.01.0
International service quality
Domestic service quality

Auckland International Airport Limited 6
Earning a fair and
reasonable return
When Auckland Airport set prices in 2012,
our objective was to target a fair return. We
wanted to ensure that the resulting charges
were reasonable by adopting a meaningful
and transparent consultation process with our
substantial customers. Our prices were reviewed
by the Commerce Commission, which estimated
that Auckland Airport had targeted a return of
8%, just within its “acceptable range”.
It is important that airports have the right
incentives to continue to invest in growing travel
markets, airport operations, and core airport
infrastructure. New Zealand’s regulatory regime
is designed to provide regulated businesses with
incentives to outperform in a way that generates
benefits for consumers over time. Auckland
Airport has therefore sought to meet or exceed
our growth targets without compromising quality
outcomes for consumers in the short or
long-term.
It is important to consider the interaction
between demand, operating expenditure and
capital expenditure when considering variations
between forecast and actual performance. We
applied a combination of operating solutions
and capital solutions in different situations to
respond to the substantially different demand
circumstances we faced over this pricing
period. Although revenues were higher than
forecast as unforeseen aeronautical demand
growth materialised, we also increased capital
investment to keep pace with that growth –
investing over 80% more than forecast over the
past five years in our aeronautical infrastructure.
Operating costs were also $60 million higher than
forecast, while remaining relatively stable on a per
passenger basis.
Together, this investment ensured that Auckland
Airport provided very good levels of service
overall, and high quality facilities for all consumers
at the airport during a period of exceptional
growth. It has also ensured that these standards
will be maintained in the long-term, including
as the infrastructure we are currently building
becomes available for use.
Our overall return for the past five financial years
was 8.5%, close to the forecast target return
set in 2012, despite material changes between
the pricing forecasts and actual outcomes for
a number of pricing elements. We therefore
consider our returns over PSE2 to be fair and
reasonable, reflecting our continuing efforts
to grow New Zealand’s travel, trade and
tourism and our commitment to delivering the
infrastructure needed to cater for that current and
forecast growth.

Annual Disclosure
Commentaries
30 June 2017

Cover: Artist’s impression of the combined domestic and international terminal.
2
CONTENTS
Executive summary ................................................................................................................. 5
1.1 Introduction ...................................................................................................................... 5
1.2 Overview of PSE2 – a period of rapid growth ................................................................. 5
1.3 Having an appropriate incentive to invest ....................................................................... 7
1.4 Identifying and implementing innovations ....................................................................... 9
1.5 Generating efficiencies and sharing the benefits .......................................................... 11
1.6 Meeting and exceeding customer quality expectations ................................................ 14
1.7 Earning a fair and reasonable return over time ............................................................. 18
Note Schedule 1: Return on investment ............................................................................. 20
1.1 Commentary on Return on Investment ......................................................................... 20
Note Schedule 2: Regulatory Profit ..................................................................................... 22
2.1 Comment on Regulatory Profit ...................................................................................... 22
2.2 Justification for Merger and Acquisition Expenses ........................................................ 22
Note Schedule 3: Regulatory Tax Allowance ..................................................................... 22
3.1 Disclosure of Permanent Differences and Temporary Adjustments ............................. 22
3.2 Regulatory tax asset value of additions ........................................................................ 23
3.3 Regulatory tax asset value of assets transferred from/(to) unregulated asset base ..... 23
Note Schedule 4: Regulatory Asset Base Roll Forward .................................................... 23
4.1 RAB value—previous disclosure year ........................................................................... 23
4.2 Lost and found assets and adjustments resulting from cost allocation ......................... 24
4.3 Calculation of Revaluation Rate and Indexed Revaluation of Fixed Assets ................. 24
4.4 Assets held for Future Use ............................................................................................ 25
Note Schedule 5: Related Party Transactions .................................................................... 26
5.1 Transactions with related parties................................................................................... 26
5.2 Auckland Council and its subsidiaries ........................................................................... 26
5.3 Auckland International Airport Marae Ltd ...................................................................... 26
5.4 Auckland Airport’s non regulated business ................................................................... 27
5.5 Associate entities .......................................................................................................... 27
Note Schedule 6: Actual to Forecast Expenditure ............................................................. 27
6.1 Operating Expenditure Overview .................................................................................. 27
6.2 Capital expenditure overview ........................................................................................ 31
Note Schedule 7: Segmented Information .......................................................................... 37
Note Schedule 8: Consolidation Statement ........................................................................ 38
8.1 Depreciation .................................................................................................................. 38
8.2 Revaluations .................................................................................................................. 38
8.3 Tax Expense .................................................................................................................. 39
8.4 Property, plant and equipment ...................................................................................... 39
Note Schedule 9: Asset Allocations .................................................................................... 39
9.1 General Information on Asset Allocations ..................................................................... 39

3




Auckland Airport Disclosures FY17 30 June 2017

Note Schedule 10: Cost Allocation ...................................................................................... 40
10.1 General Information on Cost Allocations ....................................................................... 40
10.2 Comparison of Outcome of Cost Allocations ................................................................ 41
Note Schedule 11: Reliability Measures .............................................................................. 42
11.1 Reliability ....................................................................................................................... 42
11.2 Interruptions ................................................................................................................... 42
11.3 Runway performance .................................................................................................... 43
11.4 Taxiway performance .................................................................................................... 43
11.5 Contact Stand and Air-bridge Performance .................................................................. 43
11.6 Baggage Sortation ......................................................................................................... 44
11.7 Baggage Reclaim .......................................................................................................... 45
11.8 On-time departure delays .............................................................................................. 45
11.9 Fixed electrical ground power units ............................................................................... 46
Note Schedule 12: Capacity utilisation indicators for aircraft and freight and airfield
activities ....................................................................................................................... 46

Note Schedule 13: Capacity utilisation indicators for specified passenger terminal
facilities ........................................................................................................................ 48

13.1 General comments on terminal capacity utilisation ....................................................... 48
13.2 Key insights for FY17 .................................................................................................... 48
13.3 Floor space .................................................................................................................... 49
13.4 Notional capacity of baggage units and busy hour throughput ..................................... 49
13.5 Passport control............................................................................................................. 50
13.6 Security screening ......................................................................................................... 51
13.7 Departure lounges ......................................................................................................... 51
13.8 Biosecurity screening and customs secondary inspection ............................................ 51
13.9 Total functional space ................................................................................................... 52
Note Schedule 14: Passenger satisfaction indicators ....................................................... 52
14.1 General comments ........................................................................................................ 52
14.2 Domestic terminal .......................................................................................................... 54
14.3 International terminal ..................................................................................................... 55
Note Schedule 15: Operational Improvement Processes.................................................. 57
15.1 Capacity enhancement, asset reliability and service quality ......................................... 58
15.2 Passenger Experience .................................................................................................. 61
15.3 Improvement initiatives driving efficiency and innovation ............................................. 63
15.4 Health and Safety .......................................................................................................... 67
15.5 Sustainability ................................................................................................................. 69
Note Schedule 16: Associated statistics ............................................................................ 69
16.1 Passenger Movement Statistics .................................................................................... 69
16.2 Aircraft Movement Statistics .......................................................................................... 71
16.3 Human Resource Statistics ........................................................................................... 71
Note Schedule 17: Pricing Statistics ................................................................................... 72

4




Auckland Airport Disclosures FY17 30 June 2017

17.1 International ................................................................................................................... 72
17.2 Domestic ........................................................................................................................ 73

5




Auckland Airport Disclosures FY17 30 June 2017

Executive summary
1.1 Introduction
The purpose of annual information disclosure (ID) is to provide sufficient information to enable
interested parties to assess Auckland Airport’s performance in meeting the purpose of Part 4
of the Commerce Act 1986 (the Act). It also allows interested parties and the Commerce
Commission (Commission) to analyse Auckland Airport’s performance over time, and to
compare that performance with Wellington Airport and Christchurch Airport.
Auckland Airport is committed to the success of the ID regime, working with our passengers,
customers and the Commission to deliver long-term benefits for consumers, and to promote
the purpose of Part 4 of the Act. We believe the ID reporting regime provides an effective
way to understand an airport’s performance in relation to its regulated services, including
pricing arrangements, quality of service, capacity utilisation, and capital investment.
We encourage interested parties to exercise caution when interpreting variances between
forecast and actual performance, when considering an airport’s performance alongside a
notional industry benchmark estimate, and when making comparisons between airports.
Contextual information is always important to properly understand an airport’s performance,
and there are complex interactions that make it difficult to assess individual elements – such
as operational expenditure, capital expenditure, innovation, quality and profitability – in
isolation. We have sought to provide contextual information in this disclosure to help
interested parties understand Auckland Airport’s performance, and how we are seeking to
provide good outcomes for consumers over time.
Auckland Airport typically consults on and sets charges for the use of its aeronautical facilities
and services every five years. The process of setting charges and the five-year period that
the charges relate to are both referred to as a “price setting event”.
This disclosure is the final disclosure relating to the price setting event that applied from 1
July 2012 to 30 June 2017 (FY13 – FY17). This was the second price setting event subject to
the Part 4 ID regime, and is typically referred to as “PSE2”.
As this is the final year of PSE2, this executive summary describes Auckland Airport’s
approach to delivering benefits for consumers and our key successes over the five-year
period up to and including FY17.
In accordance with our ID obligations, we describe our FY17 performance in more detail in
the schedules and the notes for those schedules included in this summary report. These
notes provide examples or evidence of how we have performed against the Part 4 objectives
for the 2017 disclosure year.
1.2 Overview of PSE2 – a period of rapid growth
Auckland Airport plays an active role in growing connectivity within and to New Zealand. We
believe that enabling sustainable air connectivity is a key part of operating a modern airport,
and contributes to improved short and long-term outcomes for consumers.
Over PSE2, we have initiated and promoted programmes to support sustainable growth, in
conjunction with our key stakeholders. Our ongoing investment in route development

6




Auckland Airport Disclosures FY17 30 June 2017

continues to contribute to international air connectivity, and our support for the New Zealand
tourism industry has helped operators to increase their awareness of market trends and to
develop innovative new products that appeal to international tourists. Our growth initiatives
continue to receive international recognition, with Auckland Airport honoured several times at
the Routes Asia Marketing Awards and the World Routes Marketing Awards – awards voted
for and judged by the airline network planning community.
The number of international airlines operating into Auckland Airport – which had previously
remained relatively steady at approximately 18 airlines for about a decade – has skyrocketed
over PSE2 to 30 airlines. Auckland Airport currently connects New Zealand to 46
international destinations, and there are now approximately 10,000 more international flights
into Auckland Airport per year than at the end of PSE1.
Domestic air connectivity has also grown strongly over PSE2, with an additional 650,000
seats added to New Zealand’s domestic network in the last two years of PSE2 alone. Among
other initiatives to support growth and capacity in the domestic market over PSE2, Auckland
Airport has built new facilities to accommodate Jetstar’s entry into the New Zealand regional
market – facilitating consumer choice and fare competition on flights to Napier, New
Plymouth, Nelson and Palmerston North. Both Jetstar and Air New Zealand have increased
the size of their domestic aircraft fleet and the number of flights they operate to and from
Auckland Airport.
The combination of new airlines, new routes, and new capacity over PSE2 has generated a
period of rapid growth. Although this growth has brought some challenges (as discussed
elsewhere in this summary), it has also provided substantial benefits to consumers through:
• increased destination choice and price competition for passengers;
• increased traffic on the domestic network once international passengers arrive in the
country, benefitting domestic carriers; and
• the ability to spread the future cost of providing aeronautical services over more demand
when prices are reset, as they were recently for FY18-22.
Sustainable growth over time also provides a substantial contribution to the economic
success of Auckland and New Zealand, and is essential for Auckland Airport’s long-term
performance.


Our PSE2 success stories – a period of rapid growth

• 30 international airlines operating into Auckland Airport in FY17, up from 18 in FY12.
• Auckland Airport now connects New Zealand to 46 international destinations, up from 33 in FY12.
• New facilities built to support Jetstar’s entry into the New Zealand regional market.
• 36% increase in total passenger numbers over PSE2, from 14 million in FY12 to 19 million in FY17.
• 22% increase in international aircraft movements, from approximately 45,000 movements in FY12
to approximately 55,000 in FY17; 4% increase in domestic aircraft movements over the same time
period.
• 33% increase in total MCTOW over PSE2, reflecting growth in the number of services as well as
increasing numbers of larger aircraft using Auckland Airport.
• Route development initiatives acknowledged at industry marketing awards, including: Winner (4-20
million passengers) – Routes Asia 2015 Marketing Awards, Overall Winner – Routes Asia 2016

7




Auckland Airport Disclosures FY17 30 June 2017

Marketing Awards, Highly Commended – World Routes 2016 Marketing Awards, shortlisted for
World Routes 2017 Marketing Awards.


The successful delivery of value to our customers over PSE2, can be traced to five
fundamental principles:
• Having an appropriate incentive to invest;
• Identifying and implementing innovations;
• Operating efficiently and effectively, including generating efficiencies and sharing the
benefits of those efficiency gains;
• Meeting and exceeding customer expectations by providing services of the quality and
range required by consumers; and
• Earning a fair and reasonable return over time.
We believe Auckland Airport’s objectives set at the start of PSE2 and our actions during the
period have been consistent with these principles.
In the following sections, we set out why we believe these principles remain important, how
we consider success can be measured, and the actual PSE2 outcomes relative to these
principles.
1.3 Having an appropriate incentive to invest
Auckland Airport is committed to ongoing investment for the benefit of our city, country,
customers and investors. We aim to invest in smart airport infrastructure to support growth,
increase productivity and optimise the efficiency of our airport assets.
Our investment philosophy has remained consistent over PSE2. We consider that:
• Sustainable demand growth in passenger and flight numbers will be the trigger for
infrastructure development;
• Investments should be efficient, resilient and flexible, and should consider environmental
and community impacts;
• A high quality experience for airlines and passengers should be planned and built in
stages where possible to ensure the vision is affordable and implementable;
• A long-term planning horizon is important as it provides transparency for stakeholders,
and clarity for Government and Auckland Council so they can appropriately plan for the
future; and
• A reasonable long-term return should be earned on investment.
Our broad capital investment priorities over this pricing period have also remained consistent.
We have sought to:
• Protect and enhance core operations throughout PSE2;

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Auckland Airport Disclosures FY17 30 June 2017

• Relieve the operational constraints of airport assets with a five to ten year horizon;
• Use a programme management approach to enable a pathway for future capital
development that is aligned with our strategy and the Masterplan;
• Demonstrate efficiency in a capital planning environment by minimising whole-of-life
spend; and
• Innovate to optimise the use of the existing facilities.
We consider that our forecast investment plan and the delivery of actual investment over
PSE2 were consistent with these objectives.
When prices were set for PSE2, Auckland Airport forecast the most likely scenario of capital
expenditure based on factors sufficiently known at that time. This forecast was generally
considered to be reasonable by our airline customers, and the Commission stated that there
was no evidence of planned over- or under-investment at Auckland Airport. However, at the
time we set prices we also acknowledged the potential for variability and uncertainty. We
were clear that project priorities would be influenced by the nature of demand growth and that
capital expenditure decisions could not be considered in isolation of the actual demand
environment over the pricing period.
As we have seen, circumstances over PSE2 have been materially different from the
assumptions that underpinned the forecasts at the time of pricing, and no party could have
foreseen the fundamentally different demand environment that materialised from FY15
onwards.
Auckland Airport has adopted a dynamic approach to capital planning and investment delivery
over this pricing period. In the early years of PSE2, we deferred and repurposed investment
to reflect new information that emerged as the Masterplan was finalised, including changes to
the future location for domestic terminal capacity to reflect stakeholder consultation. Towards
the end of PSE2, we materially accelerated capital investment to respond to rapid increases
in demand and to commence delivery of the 30-year vision.
Rapid demand growth has also compounded the challenges associated with ageing assets at
Auckland Airport. Based on the more moderate growth that was forecast at the time prices
were set, a more staged approach to asset replacement was planned. However, pressure
associated with passenger and aircraft demand over PSE2 has brought forward the need to
replace or upgrade older assets over the past five years.
Overall, capital expenditure over PSE2 has been 80% higher than forecast at the time of
pri cing – an efficient and responsible approach to current demands and a clear step on the
way to delivering our Airport of the Future.
Throughout, our focus has been responding to our customers’ investment priorities. Ongoing
consultation with our airline partners on the need for, design and delivery of investment has
been a key feature of PSE2, and all major changes to capital expenditure plans have been
discussed with airlines and with BARNZ. This constructive dialogue continued throughout
FY17 as our focus has shifted to the next phase of airfield and terminal development
planning, which in turn has underpinned the capital expenditure forecast for PSE3 and will
form the base case for investment for the next ten years. As always, there will be changes to

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Auckland Airport Disclosures FY17 30 June 2017

that base case over time, but we remain committed to responsible, timely and efficient
investment informed by robust engagement with our airline customers and a careful
consideration of consumer expectations.
Our key PSE2 success stories are summarised in the box below. For FY17, we summarise
capacity utilisation in Schedule 12 and period to date investment in Schedule 6.


Our PSE2 success stories – Appropriate incentives to invest
• Undertook an extensive Master planning process and established our 30-year vision to build the
Airport of the Future – a world-class airport that delivers great outcomes for consumers, supports
the success of airlines and aviation businesses, and boosts the Auckland and New Zealand
economies.
• Altered our Masterplan in response to customer requests to orient future domestic development in a
brownfields southern site, instead of the greenfields northern site.
• New Airport Development and Delivery team and programme management office established over
FY13 to FY14 which has contributed to a new programme management approach to capital
planning, established a new capital governance process, and been fundamental in driving the
airport development plan.
• Substantially expanded our airfield infrastructure to better service international, domestic and
regional aircraft, and to cater for the introduction of 12 new international airlines along with Jetstar’s
entry into the New Zealand regional market in December 2015. In total over 80,000 sqm of new
airfield was developed.
• The remaining airfield was comprehensively maintained (including necessary reconfiguration and
upgrades to provide additional flexibility and capacity) and a major taxiway and apron pavement-
strengthening programme was undertaken to accommodate larger and heavier aircraft.
• Made significant investments in core technology infrastructure to unlock efficiencies through
increased insight, information sharing, and collaborative process improvements.
• Provided a third baggage route to the baggage makeup hall and new baggage hall in order to meet
passenger growth and to increase resilience.
• Extended the international baggage hall to provide two new Code F capable baggage reclaim belts
and responded to government-mandated introduction of Hold Baggage Screening (HBS) for all
baggage on domestic jet services in December 2016.
• Progressed the major upgrade of our international departure area, including opening the new
security screening space and the first phase of the new stores for our two main duty free operators
in late June 2017. When finished, our new international departure area will be more than twice the
size of the previous space, and will include a reconfigured landside farewell portal, a new and
expanded security screening and processing area, a new retail hub and a new passenger lounge.
The construction of this significant infrastructure project was substantially progressed in PSE2, and
is due to be completed around the end of the 2018 financial year.
• Invested responsibly to extend the life of the existing domestic terminal building and to maintain
quality for domestic services, informed by the expected future use of the facility and the transition to
a combined terminal over the medium term.
• Undertook and advanced the planning of a number of roading and transport upgrades on our
network. We also developed new traffic management plans for use when the airport roading
network is particularly busy, and continued to work closely with the New Zealand Transport Agency
and Auckland Transport to advance roading and public transport solutions for South Auckland and
the airport precinct.
1.4 Identifying and implementing innovations
The aviation sector has a culture of innovation, aimed at improving operational performance,
reliability performance, passenger experience, efficiency of expenditure, efficiency of
investment and the success of route development initiatives. It can also lead to reductions in
operational risk that might not be obvious to the travelling public. As acknowledged by the

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Auckland Airport Disclosures FY17 30 June 2017

Commission, innovation is incentivised by the prospect of earning higher profits and a greater
return. Auckland Airport is continuously focused on the introduction of new processes and
technologies to improve departures, arrivals and border processing. Successful initiatives can
increase the propensity to travel and increase the capacity of existing infrastructure, thus
optimising capital expenditure on new infrastructure.
Innovation can lead to operational improvements or improve capacity utilisation of terminal
and airfield facilities. Innovation can also increase reliability and performance.
Auckland Airport’s aviation industry partners are also committed to the identification and
development of innovations, as part of a focus on greater collaboration. Each time-saving
initiative helps with reliability, customer satisfaction, capacity utilisation and operational
improvements. Auckland Airport actively facilitates the identification of opportunities and
priorities for their implementation. In such situations, the benefits of innovation are likely to
flow either directly or indirectly to consumers. Auckland Airport’s innovation initiatives range
from modest commitments of management time and effort, to significant investments that
create value for the industry (such as when the provision of infrastructure leads to superior
economic, social or environmental outcomes).
Auckland Airport has a history of innovation, in both passenger experience and airfield
operations processes. This was outlined in earlier disclosures and has continued in FY17.
One of the key drivers of innovation is destination competition. To compete effectively with the
likes of Sydney, Melbourne, Brisbane and Christchurch Airports, our airport processing,
operations and product offer must be better than, or at least as good as, those provided by
our competitor airports. This helps inform the terminal environment design, which ultimately
supports passenger satisfaction.
Innovation can lead to the development and delivery of new, best in class, goods or services,
and/or more efficient production techniques. However, innovation by its very nature involves
risk. Our incentives to innovate should be assessed over time, given that innovations may not
always result in a successful or wholly successful outcome.
Examples of some of our PSE2 success stories are summarised in the box below. For FY17,
evidence of our innovations can be found in Schedules 11 (reliability and performance), 12
and 13 (capacity utilisation) and 15 (operational improvements).


Our PSE2 success stories - Identifying and implementing innovation
• Trialled and introduced three SMART aircraft approach paths in conjunction with Airways and
BARNZ, with a further SMART approach trialled in FY16 – generating efficiencies for aircraft,
contributing to international aviation carbon dioxide emission reductions and aligning with the
Government’s National Airspace and Air Navigation Plan.
• Significant investment in technology infrastructure to support and drive efficiencies, including a
replacement Aeronautical Operating System, enabling more innovative and efficient use of
resources and infrastructure. This included the replacement of the database that receives and
exchanges all scheduling information, and a new Resource Management System (RMS) to allocate
aircraft stands, baggage carousels and check-in counters. The new tool has far greater
functionality, including the ability to make dynamic changes to resources in real time and includes a
web-based day of operations dashboard – giving all stakeholders access to common data on
expected passenger volumes and arrival and departure times, allowing for better resource planning
and increased efficiency.

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Auckland Airport Disclosures FY17 30 June 2017

• Improved understanding of passenger flows and behaviours across the end-to-end passenger
journey. Auckland Airport invested in a highly innovative Passenger Flow system using Wi-Fi and
Bluetooth sensors strategically located around the terminal. This technology provides historical and
real-time passenger processing times, which is also made available to our airport partners. The
system allows for detailed analysis to understand where passengers experience the longest queue
times, which drives individual agency and collective process improvements.
• Computer aided simulation technology (CAST) model developed for the international terminal to
assist capacity planning and process improvements. CAST is a world leading simulation tool for
modelling and evaluating airport systems and processes, and is used to aid efficient investment
outcomes and to optimise operational outcomes.
• Introduced A-CDM – a collaborative decision making tool designed to optimise resources and
infrastructure, and which involves the airport, airline operators, ground handlers and air traffic
control working together to improve the efficiency, predictability and punctuality of airport
operations. The success of the system has seen Auckland Airport invited to share lessons learnt in
both Brussels and in Amsterdam.

1.5 Generating efficiencies and sharing the benefits
Efficiency is at the heart of Auckland Airport’s strategy to be fast, efficient and effective.
Auckland Airport has retained our strong focus on operational and capital efficiency
throughout PSE2. Customers share in our efficiency gains in a number of ways, including
through lower prices over time, higher quality of service, and improved choice and flexibility.
A key focus is to enhance our terminals and airfield to create better and faster passenger
journeys, and to deliver more efficient airline operations.
For example, we have made a number of changes to the international check-in experience to
improve efficiency, including the introduction of mobile check-in kiosks and streamlining
traditional counters to provide more counters within the same terminal footprint. Processing
efficiency in the domestic terminal has also improved over PSE2, including the consolidation
of security screening into a single location – a larger area that has helped to streamline and
speed up passenger processing, reduce duplication and increase efficient utilisation of
resources for the airport and Aviation Security, and simplify way-finding for passengers.
A key element of Auckland Airport’s operational philosophy is to maximise the utility of
existing assets. This includes pursuing innovation and striving for best practice maintenance,
management technology and operational efficiency, as discussed above.
We work hard to continuously maintain and improve the quality of our services while
containing costs. As well as having a strong growth focus, Auckland Airport seeks to
disconnect costs (including capital expenditure) from passenger volume growth wherever
possible to help drive down unit cost and reduce pressure on prices over time. When we set
prices in 2012, we passed forecast efficiencies back to consumers through prices – which
were lower than they would have been if we had not forecast these efficiencies. Over PSE2,
some of these forecast efficiencies have proved unrealistic in practice. Significant growth has
created a drag on efficiency such that operating costs have fallen in real terms by 55c per
passenger over the five-year period, less than the targeted efficiency. Nevertheless,
Auckland Airport continues to benchmark well in worldwide comparisons of airport operating
costs, particularly given Auckland Airport has a considerably higher share of more complex
and expensive international operations than benchmark airports.

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Auckland Airport Disclosures FY17 30 June 2017

Auckland Airport's performance demonstrates that it seeks to create efficiency gains in a
variety of ways. We remain committed to seeking out efficiencies year on year and sharing
some efficiency gains with consumers over time, either through price or quality decisions.
Within a pricing period we are able to share benefits by sharing costs across the aeronautical
and non-aeronautical business and remaining responsive to consumer expectations, even if
these were not factored into prices. This has been the case over PSE2.
Auckland Airport’s performance over PSE2 demonstrates that we have well-established
practices for exploring process efficiency options prior to capital expenditure. In the last two
years of the pricing period, Auckland Airport established a recurring dedicated project team to
focus on delivering airfield and terminal efficiencies for the summer peak – prioritising
planning and operational improvements to cater for the seasonal aircraft and passenger peak
within the existing terminal and airfield footprint.
As we discuss in the following section, we acknowledge that increasing asset utilisation can
impact resilience, and affect our ability to absorb the impact of unforeseen disruptions. Over
PSE2, the combination of demand growth, ageing assets and construction activities has put
our facilities under pressure at times – particularly when unscheduled services arrive or
unexpected incidents occur during peak travel periods. However, the combination of system
investments, increased operational resource, and collaboration with our airport partners has
helped us to navigate these challenges and strive to deliver positive results over PSE2. In
particular, we have worked hard to continue providing our services as efficiently as possible
while undertaking a major construction programme across core parts of the terminal and
airfield. Auckland Airport also values sustainable operational, maintenance and construction
practices. For example, a range of energy efficiency projects have been deployed over PSE2
to reduce energy consumption across the terminals and airport precinct, and waste
minimisation activities have substantially increased the rate of landside and airside recycling.
Auckland Airport is conscious that our behaviour drives and facilitates efficiencies for our
aviation partners. We believe that facilitating measures to reduce total costs of operation for
airlines is a key way that we can share efficiency benefits with consumers. We have taken
steps over PSE2 to assist the industry to improve its efficiency – both in the air and on the
ground. For example, we have helped to improve the management of airspace around
Auckland Airport through actively supporting the trial and implementation of SMART flight
approaches during PSE2 – using satellite-based navigation and revised flight paths to enable
aircraft to burn less fuel, emit less carbon dioxide, and fly more quietly. We spent
considerable time and effort on leading public information programmes, among other
activities.
Inside the international terminal, we have worked alongside our border agency partners to
support and expand the SmartGate system for passenger processing on arrivals and
departures, and PSE2 has seen a significant increase in the number of passengers who are
eligible to use the technology along with increases in the processing speed and notional
capacity of the SmartGate process through additional units and system upgrades – including
the introduction of an integrated single-step process for departing passengers.
Finally, efficiencies can also be generated through Auckland Airport's route development
activities and the role that we play within the tourism, trade and aviation system. Successful
route development initiatives and investments deliver benefits for passengers through

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Auckland Airport Disclosures FY17 30 June 2017

increased destination choice and price competition. During a pricing period Auckland Airport
carries the risk to the extent we invest more than was included in the pricing forecast for route
development or if demand conditions are more adverse than forecast. We are rewarded if the
introduction of new capacity stimulates demand and if market conditions are better than
forecast. These risks and benefits are temporary during the current pricing period. A more
permanent efficiency flows to consumers when prices are reset and the utilisation of existing
assets is higher. This means that the cost of infrastructure can be spread over more
passengers, leading to lower aeronautical charges than would otherwise be the case. In
practice, the efficiency will vary depending on whether new demand occurs at peak or in the
off-peak.
In some instances, we take a leadership role to facilitate broader opportunities in the tourism
sector that can drive efficiencies and benefits for consumers, such as our involvement in the
Tourism 2025, Ambition 2025 and development of the Four Seasons Five Seasons tourism
cluster-marketing programme. In other instances we take a support role. For example
supporting government departments with air services negotiations and identification of visa
improvement opportunities. The willingness of Auckland Airport to absorb the cost of this,
often unanticipated, investment can lead to more efficiencies for the network, which ultimately
benefit consumers. This makes the network cost of Auckland more competitive, which can
only be in the long-term interests of consumers.
Examples of some of our PSE2 success stories are summarised in the box below. Initiatives
undertaken in FY17 that show how efficiencies are generated or benefits shared are set out in
the following schedules:
• Schedule 6 provides evidence of how costs have been managed through the period
versus forecast.
• Schedules 12 and 13 describe asset utilisation. Where this is increasing, the assets are
becoming more productive over time and will in turn help limit prices. Where utilisation
comes closer to capacity, this indicates the need to add new capacity.
• Schedules 11, 14, 15 describe the quality of service delivered to airlines in terms of
reliability, passengers in terms of satisfaction levels and operational improvement
processes. Discretionary initiatives through the period to maintain or improve quality
service at Auckland Airport, or for the aviation sector, exemplify how efficiency gains can
be shared with customers through the period.
• Schedule 16 describes demand growth during the period and routes that have been
developed during the period.


Our PSE2 success stories - Generating efficiencies and sharing the benefits
• Progressive changes to the check-in system to support efficient outcomes. In the early part of
PSE2, this included a transition to a fully independent counter allocation process run by Airport
Coordination Limited (“ACL”) to support all airlines and ground handlers. This included a move to
billing based on actual usage and enabling airlines and ground handlers to drive efficiencies in their
own operational processes. In response to requests from customers and to drive better utilisation of
check-in space, we installed 45 mobile international self-service check in kiosks. Through a re-
configuration of the check-in area, we were able to provide 13 more serviced counters in the same
terminal footprint. The combination of these changes means that more passengers can be
processed through the same terminal space – deferring expenditure that would otherwise have

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Auckland Airport Disclosures FY17 30 June 2017

been necessary to expand the check-in area, contributing to lower prices for consumers than would
otherwise have been the case.
• Increased capacity of border processing by working with our airport partners to help facilitate the
expansion and development of SmartGate infrastructure. At the end of PSE1, there were only two
SmartGates, which could only be used by New Zealand and Australian passport holders over 18
years old. At the end of PSE2, there are 23 SmartGates in operation – 8 inbound and 15 outbound.
These facilities can now be used on arrival and departure by New Zealand, Australian, Canadian,
United States and United Kingdom passport holders over 12 years old. The border processing
system was further improved in PSE2 through the introduction of SmartGate Plus gates – replacing
the previous two-step (kiosk and gate) process for outbound passengers with an integrated single
step process. This has reduced the transaction time for outbound passengers to 20 seconds (a
reduction of 10 seconds per passenger), increasing the notional capacity of the facilities and
creating a faster and better passenger experience.
• Continued to support New Zealand Customs-led project to target incremental improvements to the
international departures process – with the three-way collaboration between Customs, the Civil
Aviation Authority and Auckland Airport winning the Deloitte Fujitsu State Service Excellence in
Achieving Collective Impact Award at the 2015 Public Sector Excellence Awards.
• Successfully managed the transition to an independent slot coordination management process in
FY14, in line with international best practice. The slot coordinator, ACL, has world-class experience
and uses systems that provide good intelligence, enabling the airport and stakeholders to operate
more efficiently and providing for better utilisation of assets. In combination with the improvements
we have made through the introduction of A-CDM technology (discussed elsewhere), this has
contributed to more efficient use of the airfield, helping to reduce the total cost of operation for
airlines at Auckland Airport.
• Exceeded our sustainability targets across a range of measures. In FY12, Auckland Airport
targeted a reduction of 20% in energy consumption, water use and waste per passenger by 2020,
and has exceeded these targets – energy use per passenger was 40% lower in FY17 than FY12,
water use per passenger was 27% lower in FY17 than FY12, and waste per passenger was 47%
lower per passenger in FY17 than FY12. As well as delivering positive environmental benefits,
these savings are good for consumers – reducing the cost per passenger for energy, water and
waste services and helping to reduce prices over time.
• Received a number of awards to recognise our focus on sustainability, including an Asia Pacific
Environmental Leadership Award in 2013 for our approach to climate change, a Highly Commended
award for Energy Management in the 2014 Sustainable 60 Awards, a Commended rating for
sustainable operation of airport infrastructure from the Infrastructure Sustainability Council of
Australia in 2015, and Highly Commended award in the EECA 2016 Energy Management Awards.

1.6 Meeting and exceeding customer quality expectations
Auckland Airport considers the quality of the service we provide to be critical to our
performance as New Zealand's international gateway and largest domestic airport. If our
service is below expectations, this negatively affects our business and has flow-on effects for
all travel, trade and tourism businesses that rely on Auckland Airport. As discussed above,
improving quality of service without increasing prices is a key way of sharing efficiency gains
with customers.
Auckland Airport strives to provide our passengers with positive travel experiences, and to
provide a quality service for our airline and cargo customers. Customer service, safety and
security are core considerations for our business, and we are committed to understanding
and delivering the level of service expected by our consumers.
Our Airport Service Quality survey results over PSE2 show that passengers have rated the
quality of our international and domestic terminals as “very good” over this pricing period.
Auckland Airport has also consistently ranked highly in the Skytrax World Airport Awards over

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Auckland Airport Disclosures FY17 30 June 2017

PSE2 – awards voted for by passengers in the largest annual global airport customer
satisfaction survey.
The reliability of our services has continued to be very good across PSE2, with minimal
interruptions to our runways, taxiways, stands, airbridges, baggage systems and ground
power units. These material services continue to be available almost 100% of the time, and
on time departure delays resulting primarily from causes within Auckland Airport’s
responsibility have typically been low.
Auckland Airport uses a number of methods to understand and improve the quality of services
required by customers and to assess customer satisfaction. For the travelling public these
include:
• Qualitative and quantitative market research that assists in understanding consumer
needs and preferences. These insights inform process development and terminal
planning.
• Membership of the global ASQ service rating system.
• Placement in the World Skytrax World Airport Awards.
• Review of direct feedback on performance to identify where quality issues may be
emerging.
We recognise that as our facility grows over time consumers will experience temporary
disruption when our facilities undergo major construction. We seek to anticipate where the
major points of stress might be in the system and to proactively mitigate impacts where
possible. We also seek to invest in technology to provide real-time customer feedback so that
customer issues, including during periods of construction, can be understood and resolved
faster.
We have continued to explore ways to communicate with our passengers and to understand
their needs over PSE2. This has included the introduction of digital touchscreens across our
terminals to facilitate customer feedback, as well as introducing and progressively upgrading
our Auckland Airport mobile app and website to provide better information and services to our
passengers. We have also taken steps to increase the amount of information we provide in
multiple languages in our terminals and through our online channels. A range of actions have
been taken to improve our customer contact channels, including investment in a new
Customer Relationship Management system to help provide better service to our passengers
and quickly resolve issues that may arise.
Auckland Airport is conscious that the airport is a complex operation where service quality
often relies on many organisations working together. Through engagement with businesses
and agencies located at the airport, we hear what is important to our business customers and
how facilities are performing against those priorities. The airport is a system in which one
party’s actions can affect others. Our philosophy is to foster a strong commitment to
collaboration for all stakeholders at the airport and to work constructively together towards a
common goal.
We develop our understanding of airlines’ quality requirements through direct feedback via a
range of forums at operational and management levels including:

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Auckland Airport Disclosures FY17 30 June 2017

• Collaborative Operating Groups (“COG”) at a tactical, management and CEO level
• Consultation on terminal and airfield development and service priorities.
During PSE2, Auckland Airport has invested substantial time and resource into developing
collaborative working relationships with its airport partners in order to optimise performance.
At the heart of collaboration has been the development of the COG programme. COG was in
its infancy at the beginning of PSE2. In 2013, airport stakeholders came together to set the
vision, operational principles and performance reporting measures for the group – agreeing to
work collaboratively to deliver a world leading customer experience while promoting growth
for New Zealand, upholding safety and security and delivering efficient outcomes.
Over PSE2, the COG framework has evolved to support short, medium and longer term
operational planning. There are three main COG forums:
• Daily COG – a daily cross-agency tactical forum supporting daily operational planning;
• Senior COG – a monthly cross-agency strategic forum providing direction on continuous
improvement projects; and
• CEO COG – a quarterly cross-agency forum providing oversight and governance on
initiatives.
All three forums provide an opportunity for the open sharing of information, including tracking
and reporting key performance measures. The technology advances discussed above have
been a crucial part of unlocking efficiency and quality gains through process improvement and
increased insight, as well as allowing all COG partners to plan based on the same information
– a single source of the truth. This information framework has supported continued
improvements in FY17. For example, the accuracy of key reported times has increased (e.g.
on-blocks and off-blocks times), the number of domestic and international aircraft adhering to
targeted turnaround times has increased, and there has been a continued reduction in the
time between the start-up time and the off-blocks time for aircraft over FY17.
Auckland Airport believes that the value of this collaborative community validates the
investment made to support the COG framework in PSE2. The COG partners continue to
work together on continuous improvement projects to drive incremental increases in service
quality. Auckland Airport plans to use these forums to work with our airport partners to refine
service level aspirations over PSE3.
In addition to our collaborative efforts and our investment in information systems and planning
tools, Auckland Airport has also been proactive in increasing resource over PSE2 to assist
with passenger flows and to provide a quality passenger experience. Since the 2016 financial
year, Auckland Airport has a team of roving Customer Service Agents whose core role is to
meet passengers’ unexpressed needs. Auckland Airport has also developed its Passenger
Assistance programme, made up of volunteers and students recruited at the summer peak to
help with passenger flow through the terminals and often assisting other airport partners.
In addition, in PSE2 we continued to deliver on our wider commitments to environmental
sustainability, health and safety, and being a good neighbour to those communities located
adjacent to the airport.

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Auckland Airport Disclosures FY17 30 June 2017

Examples of our success stories for PSE2 are shown in the box below. In the remainder of
this document we provide performance summaries and examples of initiatives undertaken in
FY17, as follows:
• Schedule 11 describes the reliability of services delivered to airlines and passengers. We
report against a range of metrics that describe on time performance and any interruptions
to core services. We also augment this by analysis of the percentage of time the assets
are available for use, which is a quality mark we use to measure ourselves.
• Schedules 12 and 13 describe capacity utilisation and performance, which is relevant to
the quality of service provided to our customers.
• Schedule 14 – ASQ is a customer satisfaction analysis and benchmarking programme. In
our comments on this schedule, we also describe the key service level changes within
facilities that have been targeted at maintaining or improving passenger service levels.
• Schedule 15 summarises operational improvement initiatives undertaken during the year,
some of which have the effect of improving service levels.


Our PSE2 success stories - Meeting and exceeding customer quality expectations
• Despite the rapid growth and material construction programme that is underway, Airport Service
Quality scores show good to very good passenger satisfaction has been maintained overall in each
of the last five years for both international and domestic terminals.
• A programme of investment and operational improvements across the airfield and both terminals
(including departure lounges, airside circulation, security screening and baggage reclaim areas)
over PSE2 to support service quality, reduce congestion and improve the consumer experience.
• Substantial investment in flight information display screens, which now also display information in
nine languages – compared to two (English and Chinese) at the start of PSE2.
• System implemented to capture real time customer feedback across the terminals – enabling
Auckland Airport to monitor service levels in a timely manner and to quickly respond to issues that
may impact the customer journey.
• Evolved the COG framework to support short, medium and longer term operational planning,
including through a clear vision, operational principles and performance reporting measures. This
framework has been supported through investment in technology and planning tools – sharing
information and enabling increased insight and process improvement.
• Introduced permanent roving customer service agents following a trial in the 2015 financial year.
This initiative proved so successful that it was made permanent, and the customer service agents
are now supplemented by additional Passenger Experience Assistants over the summer peak.
• Continued recognition in the Skytrax World Airport Awards.
• Materially improved the Airport Emergency Services capability, including an overhaul and
modernisation of the marine response fleet and land response equipment. Our emergency services
team provides world leading safety technology and ensures that Auckland Airport will continue to
comply with international requirements as the number of aircraft and passengers increase.
• Launched Ara – our airport jobs and skills hub – in November 2015. Ara is a partnership with
central and local government, employers working on the airport’s development programme, training
providers, industry training organisations and the South Auckland community. In the 12 months to
30 June 2017, Ara organised 1,342 training opportunities and placed 190 people into employment –
156 of them living in South Auckland and 74 of whom were previously receiving a central
government benefit.

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Auckland Airport Disclosures FY17 30 June 2017

1.7 Earning a fair and reasonable return over time
When Auckland Airport set prices in 2012, our objective was to target a fair return following a
comprehensive review of service priorities and the outlook for the pricing period. We
considered Auckland Airport-specific data and then-current risk concerns when establishing
the target return for aeronautical pricing, and were concerned to ensure that the resulting
charges were reasonable by adopting a meaningful and transparent consultation process with
our substantial customers. Through this process, there was also careful consideration of
what the regulator considered to be a reasonable return, in the context of proposed
investment over the period at Auckland Airport, and benchmark evidence on the
competiveness and reasonableness of proposed charges.
Auckland Airport’s prices for PSE2 were reviewed by the Commission in a comprehensive
process over 2012-2013. At the end of that process, the Commission estimated that
Auckland Airport had targeted a return of 8% for PSE2, which it found to be just within its
“acceptable range”. The Commission also considered that our demand forecasts for PSE2
were reasonable.
Once prices are set, Auckland Airport manages risk during the pricing period for the long-term
benefit of consumers. Essentially, this involves:
• Investing in growth without compromising quality outcomes for consumers in the short or
long-term. Achieving higher demand is a legitimate way to increase returns during a
pricing period, with the benefits of that higher demand passed through to consumers
when prices are reset (we are also exposed to the risk of lower demand resulting in lower
returns though a pricing period);
• Managing costs of investing in core airport infrastructure and costs of airport operations.
Efficiently and innovatively reducing costs is also a legitimate way to increase short-term
returns, with the benefits again passed through to consumers when prices are reset.
We seek to use the resources we have available to meet changing consumer requirements
through the operational or capital expenditure decisions we make. Auckland Airport balances
the new needs that emerge over time from changing market conditions and operational,
competitive, legislative and community requirements. Over PSE2, Auckland Airport has
managed and borne the risk of actual outcomes differing to forecast, and has used a
combination of operating solutions and capital solutions in different situations to respond to
the circumstances we have faced over the pricing period.
One example of a change in market conditions over PSE2 has been the materialisation of
rapid growth, leading to higher revenues than forecast. At the same time, we have faced
unforeseen operating costs that have countered these higher revenues. Our airline
customers have also benefitted from a materially increased investment programme compared
with the price setting forecasts to keep pace with growth.
When evaluating returns, Auckland Airport recommends that interested parties consider the
effective return trends over the long term rather than the return for a particular year. This is
particularly important because airports deliver long-life infrastructure assets and have
corresponding long-term investment horizons.

19




Auckland Airport Disclosures FY17 30 June 2017

Further, the underlying context is important. Given that forecast prices were reasonable
when they were set based on robust, unbiased forecasts, then variations in actual returns
over a pricing period is not informative in itself. Rather, it is necessary to more closely
examine the reasons for variances including, for example, that forecasts have inherent
uncertainty and that we have incentives to outperform targets. Our disclosure provides
sufficient information for interested parties about whether, on balance, Auckland Airport's
conduct has been aligned with the long-term interests of consumers. For example, where
actual conditions differ to those forecast at the time of pricing, our disclosure allows interested
parties to assess whether we have been appropriately responsive through the operating and
capital decisions made over the period to manage the level of service provided to customers.
Our overall internal rate of return for PSE2 is 8.5%.
1
This is close to the forecast target return
set in 2012 and only a small forecast variance in light of the material changes between the
underlying forecast and actual outcomes for a number of pricing elements. Although demand
has been materially higher than forecast, this upside was balanced by materially higher-than-
forecast operating and capital expenditure over the period to cater for that demand and to
continue to provide quality services to our customers. In practice, our ability to trade across
all pricing elements through the period has been a key facilitator of these outcomes.
Further, we note that Auckland Airport has a strategy of responsibly seeking to stimulate
demand in air connectivity. We actively invest in marketing with the airlines to increase the
probability of demand being sustainable in the long term and to reduce the prospect of airline
exits. This strategy has long lead times and significant uncertainty. When this strategy is
successful, consumers benefit from greater choice and/or price competition immediately and
lower per unit prices at the next price reset. Auckland Airport carries the risk during the
pricing period to the extent that we invest more than was included in the pricing forecast for
route development. If successful, this stimulates additional revenue however the volume
benefit lasts no longer than the current pricing period. We consider our returns over PSE2 to
be a fair and reasonable reflection of our continuing efforts to grow New Zealand’s travel,
trade and tourism.
As a publicly listed entity, Auckland Airport is subject to, and recognised for, high standards of
corporate governance, transparency and responsibility. Auckland Airport must make regular
and transparent financial disclosures based on NZ IFRS accounting standards, and must
meet stringent NZX and ASX obligations in relation to its governance and financial matters.
These processes all serve as a further check on the appropriateness of Auckland Airport’s
approach and decisions. Auckland Airport takes these responsibilities seriously and continues
to strive to deliver very high standards of governance.


Our PSE2 success stories - Earning a fair and reasonable return over time
• Overall internal rate of return for PSE2 of 8.5%, close to the forecast target return set in 2012
assessed as within an acceptable range.
• Material changes between the underlying forecast and actual outcomes for a number of pricing
elements have been balanced by Auckland Airport through PSE2, with unprecedented demand
growth balanced by higher operating expenditure and accelerated capex in consultation with
substantial customers (80% higher than forecast).

1
This 8.5% IRR for PSE2 has been calculated using Auckland Airport’s restated RAB, which excludes revaluations
for airfield and terminal assets from the start of the ID regime and includes revaluations for aircraft and freight assets.
Due to changes in the IMs in December 2016, we consider this is the best estimate of Auckland Airport’s actual
returns over PSE2. Further information can be found in the commentary to Schedule 1 of this disclosure.

20




Auckland Airport Disclosures FY17 30 June 2017

Note Schedule 1: Return on investment
1.1 Commentary on Return on Investment
Schedule 1 reports on Auckland Airport’s return on investment (ROI) on its regulated activities
compared with the Commerce Commission’s 50th percentile (mid-point) post-tax weighted
average cost of capital (“WACC”) estimates for the most recent three years ended 30 June –
namely FY15-FY17.
Change in methodology
In past years, the IMs required Auckland Airport to index its RAB annually at CPI for ID
purposes, and to disclose the resulting revaluations as part of its regulatory profit. This
requirement created a mismatch between Auckland Airport’s annual disclosures and its
pricing approach, where a moratorium on asset revaluations was in place for airfield and
terminal assets. Auckland Airport previously sought to explain this mismatch to interested
parties by disclosing alternative ROI and IRR measures excluding revaluations each year.
In December 2016, the Commission amended the IMs to provide airports the ability to either
index or not index the RAB for ID purposes, provided that airports adopted the approach that
was most consistent with their pricing decisions. As a result, consistent with the pricing
approach in place for PSE2, Auckland Airport’s FY17 disclosure does not include any
revaluations for airfield and terminal assets, and includes revaluations at CPI for aircraft and
freight assets only. Auckland Airport has also restated its RAB to remove all previously
disclosed revaluations for airfield and terminal assets from the start of the ID regime. The
FY17 ROI is based on Auckland Airport’s actual restated asset base.
This regulatory change improves the transparency of Auckland Airport’s disclosed returns for
FY17 onwards, and removes the previous mismatch between returns disclosed for ID
purposes and Auckland Airport’s “actual” returns. However, this change does makes it
difficult to compare the return information disclosed for FY17 with that disclosed in the
previous years of PSE2 – as the Schedule 1 information had been prepared on a different
basis. Auckland Airport has not sought to restate past years’ disclosures.
2
However, we
provide our view of Auckland Airport’s overall returns for PSE2 below according to the new
IMs, and have explained the information that we have used to generate this estimate.
FY17 and PSE2 returns
Auckland Airport’s post-tax ROI under the Commission’s revised ID methodology for the year
to 30 June 2017 is 10.8%. Over the five-year period of PSE2 from 1 July 2012 to 30 June
2017, Auckland Airport’s int ernal rate of return (IRR) is 8.5%. The 8.5% IRR for PSE2 has
been calculated using the restated RAB that excludes revaluations for airfield and terminal
assets from the start of the ID regime and includes revaluations for aircraft and freight assets.
Auckland Airport targeted returns for PSE2 after extensive consultation with airlines and their
representatives. In this regard, we note that:
(1) On 31 July 2013, the Commerce Commission completed its s56G review of the
effectiveness of the information disclosure regulatory regime under Part 4 of the

2
Auckland Airport was required to disclose a transitional schedule restating the RAB for FY13-16 in Schedule 24 to
Auckland Airport’s price setting disclosure, published on 3 August 2017.

21




Auckland Airport Disclosures FY17 30 June 2017

Commerce Act in relation to Auckland International Airport. The Commission found
that “Auckland Airport targeted returns [for PSE2] within an ‘acceptable range’ ... based
on a reasonable assessment of how, at that time, it considered the Commission might
assess its performance. Auckland Airport set prices such that its expected returns over
the whole of PSE2 is equivalent to a return of 8.0% when the information disclosure
framework is applied, and taking into account its moratorium on asset revaluations. ...
this target return is just within the upper limit of an acceptable range of returns of 7.1%
to 8.0%, and therefore supports our conclusion that information disclosure is effective
in achieving the Part 4 purpose as regards profitability.”
(2) An analysis of actual FY13-FY17 financial results versus the FY13-FY17 forecasts in
terms of aeronautical revenues, expenses and capital expenditure, but excluding
revaluations (consistent with the revaluation moratorium for price setting), shows that
net returns of 8.5% is slightly above the pricing forecast that was endorsed as
acceptable by the Commission. Higher revenues for the period to date have largely
been offset by higher costs.
(3) The primary driver of the increased return has been the rapid level of aeronautical
demand growth in the second half of the pricing period. We note that when prices were
set, they were based on organic growth forecasts, and major airlines considered those
forecasts were a reasonable expectation of future demand. Only known route
development volumes and costs were included in pricing, and Auckland Airport did not
forecast the incremental volume or the associated route development cost where there
was a high level of uncertainty. Auckland Airport has invested heavily in route
development to support increased connectivity, investing $24.2m more than forecast in
the period to date. FY17 has been another record year. Our route development efforts
have been rewarded with the commencement of seven new international airlines in
FY17. This success builds on that achieved over the previous four years of PSE2 to 30
June 2016.
(4) We have responded to the changing market conditions through a mixture of increased
operational and capital solutions. When prices were set, the capital forecast was
considered to be reasonable. Auckland Airport has consulted throughout the period
with airlines on priorities as market conditions have changed. The changed demand
conditions caused us to advance aeronautical capital expenditure. Schedule 6 shows
that FY17 allocated aeronautical capital expenditure of $233.1m exceeded the PSE2
price setting disclosure forecast for FY17 of $48.1m by approximately $185m. Given
this additional capital expenditure in FY17 and that also seen in FY15 and FY16,
aeronautical capital expenditure has materially exceeded that forecast for the entire
PSE2 by $232m, some 80%. We have also seen higher operating costs through the
period as we have invested in solutions to respond to changing circumstances, with
$60m higher opex over PSE2 than forecast.
(5) With these higher levels of capital expenditure and the relatively long lead times of
some projects, Auckland Airport has also carried higher levels of works under
construction than it has historically. As at 30 June 2017, allocated works under
construction was $208m, materially above the forecast carrying value of just $16m.

22




Auckland Airport Disclosures FY17 30 June 2017

Please refer to Schedule 6 for a detailed analysis of period to date operating expenditure and
capital expenditure variances versus the original PSE2 pricing forecasts.
We note that no cash return has been earned on land held for future use in PSE2 (with this
land valued at approximately $300m at the end of PSE2).

Note Schedule 2: Regulatory Profit
2.1 Comment on Regulatory Profit
Auckland Airport notes that regulatory depreciation has fallen relative to previous years. This
is due to the restatement of Auckland Airport’s RAB, as required by the Commission’s 2016
input methodologies amendments. For further information about the restated RAB, see
Schedule 24 of Auckland Airport’s price setting disclosure (Transitional Report on Regulatory
Asset Base Value), published 3 August 2017.
2.2 Justification for Merger and Acquisition Expenses
There were no merger and acquisition expenses in the year ended 30 June 2017 for the
regulated airport business.

Note Schedule 3: Regulatory Tax Allowance
3.1 Disclosure of Permanent Differences and Temporary Adjustments
Other permanent difference - not deductible:
This disclosure relates to non-deductible entertainment expenses allocated to regulatory
income based on the company-wide cost allocation rule.
Other temporary adjustments - current period:
These disclosures relate to accruals and provisions provided at year-end that are not
deductible for tax purposes including:
• employee related provisions of $5.8m for employee leave, ACC, FBT, and staff incentives
• other accruals and provisions of $5.7m including doubtful debts, unbilled consultancy and
non-specific accruals
These are partially offset by fixed asset timing differences that are deductible for tax
purposes, including:
• tax loss on disposal of fixed assets of $1.6m
Other temporary adjustments - prior period:
The prior period adjustments consist of accruals and provisions identical in nature to those of
the current period being employee related provisions of $9.5m and other accruals and
provisions of $4.6m.

23




Auckland Airport Disclosures FY17 30 June 2017

3.2 Regulatory tax asset value of additions
During the year, $95.7m of regulatory assets were added to the tax register. This is lower
than the $135.2m of assets added to the RAB. The difference is predominantly due to $33m
of assets in the redevelopment of the International Terminal being commissioned in the RAB
at 30 June 2017 but added to the tax register at 1 July 2017.
3.3 Regulatory tax asset value of assets transferred from/(to) unregulated asset base
Other adjustments to the RAB tax value relate to lost and found assets and adjustments
resulting from cost allocation as described in section 4.2 below.
These reductions in tax values exceed the reductions in RAB values due to the FY16
reallocation of $5m of Quad 5 assets being reallocated in the tax register in FY17.


Note Schedule 4: Regulatory Asset Base Roll Forward
4.1 RAB value—previous disclosure year
Following the amendments to the ID Determination and the IM Determination in December
2016, Auckland Airport undertook a bottom-up restatement process to generate restated
regulatory asset values for all individual assets as at 30 June 2016. These restated asset
values were used to complete the “previous disclosure year” information in Schedule 4, and
this restated asset base has then been rolled forward to 30 June 2017 in accordance with the
IMs.
This process has resulted in restated asset values that remove the impact of all revaluations
for airfield and terminal assets from the start of information disclosure regulation, consistent
with the approach that Auckland Airport has taken to these assets for pricing purposes (i.e.
consistent with the moratorium on asset revaluations for aeronautical pricing). CPI
revaluations have been retained for aircraft and freight assets, which is more consistent with
Auckland Airport’s market-based approach to determining the revenue associated with these
assets – covered by leases negotiated with individual customers The land value in the
restated asset base also reflects the High Court’s ruling (incorporated into the IMs by the
Commission) that the value of land in the initial RAB should be its market value alternative
use (“MVAU”) value as at 30 June 2010, rather than as at 30 June 2009 per the previous IMs.
The following table provides an overview of Auckland Airport’s approach to asset values and
revaluations in the RAB.

24




Auckland Airport Disclosures FY17 30 June 2017


For further information about the restatement process, including a breakdown of the restated
RAB for FY16, see Schedule 24 of Auckland Airport’s price setting disclosure (Transitional
Report on Regulatory Asset Base Value), published 3 August 2017.

4.2 Lost and found assets and adjustments resulting from cost allocation
A capital expenditure project typically enters the fixed assets register as a single item
(representing the project). Following detailed analysis, it is later split into its component
assets.
This process sometimes results in aeronautical-dominated capital expenditure projects being
later split into both aeronautical assets plus a small proportion of non-aeronautical assets.
Equally, previously non-aeronautical-dominated projects can be split into non-aeronautical
plus a small proportion of aeronautical assets. These splits can result in assets being
transferred into or out of the Unallocated RAB as well as impacting the value of the Allocated
RAB.
The logical place to record these movements in Schedule 4 is in row 28, entitled "Adjustment
resulting from cost allocation". However, because row 28 does not contain an area to input
movements in Unallocated RAB, we have shown the $3.1 million Unallocated RAB movement
due to asset splits and transfers in row 18, under the "Lost and found assets adjustment".
On an Allocated RAB basis, the adjustment resulting from cost allocation has resulted in a
decrease of $9.4 million.
4.3 Calculation of Revaluation Rate and Indexed Revaluation of Fixed Assets
Following amendments to the IM Determination in December 2016, Auckland Airport has the
ability to index its regulatory assets at CPI, or to apply a non-indexed approach – provided
that it applies the approach most consistent with the pricing decision currently in place.
Consistent with these amendments, and with Auckland Airport’s pricing decision for PSE2,
the only disclosed revaluations for FY17 are indexed revaluations for assets directly allocated
Segment
Land assets Non-land assets
Base value
Revaluations included in
RAB?
Base value
Revaluations
included in RAB?
Airfield
2010 per hectare
MVAU values

No
2009 disclosed
value (or cost at
commissioning)
No
Terminal
2010 per hectare
MVAU values
No
2009 disclosed
value (or cost at
commissioning)
No
Aircraft and
Freight
2010 per hectare
MVAU values
Yes - 2011 MVAU
revaluation and indexed at
CPI since 2011
2009 disclosed
value (or cost at
commissioning)
Yes (CPI)
Land held for
future use
2009 MVAU
value
Yes – revaluation included
to bring land value to 2010
per hectare MVAU values
(consistent with RAB). No
further revaluations
included.
- -

25




Auckland Airport Disclosures FY17 30 June 2017

to Aircraft & Freight activities. There are no revaluations for airfield or terminal assets in
FY17, consistent with Auckland Airport’s decision to continue its moratorium on asset
revaluations for pricing purposes over PSE2.
Schedule 4b(iv) of the ID Determination (Calculation of Revaluation Rate and Indexed
Revaluation of Fixed Assets) currently reflects the previous IM requirement that all assets
must be revalued using CPI-indexation. This schedule, as currently specified, does not allow
Auckland Airport to disclose the value of revaluations of the RAB in a manner consistent with
our approach when setting prices – i.e. it does not allow us to apply revaluations only to a part
of the RAB (aircraft and freight assets).
Auckland Airport has been granted an exemption by the Commission from the requirement to
use the calculation of indexed revaluation for the RAB and the unallocated RAB as currently
specified in Schedule 4b(iv), provided that Auckland Airport disclose its indexed revaluations
in a manner most consistent with the approach used to set prices.
Auckland Airport has done so by including an additional line in Schedule 4b(iv) for the FY17
disclosure. This additional line has been labelled “Assets not subject to revaluation”. This
adjustment allows Auckland Airport to net out the value of airfield and terminal assets not
subject to revaluation from the total value of the RAB, leaving only aircraft and freight assets
that then have CPI indexation applied. Auckland Airport has also removed the automatic
formula from the “Asset disposals” line, so that this cell reflects only asset disposals from
aircraft and freight assets – i.e. the remaining part of the RAB not subject to revaluation have
been removed.
4.4 Assets held for Future Use
Restatement of assets held for future use – previous disclosure year
As discussed above, Auckland Airport has restated its airfield and terminal assets to exclude
all revaluations after the establishment of the initial RAB value as at 30 June 2010.
To be as consistent as possible with the value of airfield land included in the RAB, Auckland
Airport has restated the value of land included in assets held for future use as follows:
• The base value in the schedule remains the 30 June 2009 MVAU as required by the
IMs;
• Auckland Airport has rolled this base value forward to align the value of assets held
for future use with the 30 June 2010 MVAU proxy value used for airfield land in the
RAB – effectively including a periodic land revaluation in 2010 for land held for future
use. These revaluations are disclosed as “tracking revaluations” in accordance with
the IM determination; and
• No further revaluations – CPI or periodic land revaluations – have been included for
assets held for future use after 30 June 2010.
The “previous disclosure year” information in Schedule 4b(viii) reflects this restated value.
3


3
For further information about the restatement process, see Schedule 24 of Auckland Airport’s price setting
disclosure (Transitional Report on Regulatory Asset Base Value), published 3 August 2017.

26




Auckland Airport Disclosures FY17 30 June 2017

Transfer of land from assets held for future use
In FY17, there was transfer of circa 16.5 hectares out of land held for future aeronautical use
into a Park & Ride facility. The value of the respective land parcels, as well as the cumulative
holding costs and tracking revaluations associated with the land parcels, have been taken out
at its current disclosure carrying value ($1.355m) and have been subtracted via the Assets
held for future use – disposals line.

Note Schedule 5: Related Party Transactions
5.1 Transactions with related parties
All trading with related parties, including and not limited to licence fees, rentals and other
sundry charges, has been made on an arms-length commercial basis, without special
privileges, except for:
• The provision of accounting and advisory services to Auckland International Airport Marae
Ltd at no charge; and
• Transfers of land held for future use to a Park and Ride facility at the regulatory carrying
value in accordance with the ID determination.
No guarantees have been given or received.
5.2 Auckland Council and its subsidiaries
Auckland Council’s shareholding of Auckland International Airport exceeds 20 percent and, as
such, accounting standard NZ IAS 24 requires transactions with Auckland Council and its
subsidiaries to be treated as related party transactions.
Costs incurred with Auckland Council and its subsidiaries in relation to the Airport Business
during the year ended 30 June 2017 were:
• Rates of $2.378m (2016: $2.386m
4
)
• Compliance, consent costs and other local government regulatory obligations of $0.370m
(2016: $0.229m)
• City Park Services - grounds maintenance costs of $1.551m (2016: $1.319m)
• Watercare - water, waste water and compliance services costs of $1.153m (2016:
$1.089m)
5.3 Auckland International Airport Marae Ltd
Auckland International Airport Marae Ltd has two members of Auckland International Airport's
senior management team on its board. During the year ended 30 June 2017, maintenance
and occupancy costs of $0.072m (2016: $0.019m) were incurred in relation to the Marae by
the Airport Business.

4
Note – when completing the related party transactions schedule for FY16, rates were incorrectly disclosed as
totalling $3.196m, as other cost items not paid to Auckland Council were inadvertently included.

27




Auckland Airport Disclosures FY17 30 June 2017

5.4 Auckland Airport’s non regulated business
As mentioned in section 4.4 above, Auckland Airport transferred circa 1.6 hectares of land
held for future aeronautical use to a Park and Ride facility at a value of $1.355m during the
year.
5.5 Associate entities
Auckland Airport’s related parties include associate entities being North Queensland Airports,
Tainui Auckland Airport Hotel Limited Partnerships and Queenstown Airport Corporation.
There were no transactions between the associates and the Airport Business during the year.

Note Schedule 6: Actual to Forecast Expenditure
This note is in two parts. The first is a summary of operating expenditure and the second
capital expenditure. Discussion includes FY17 and for the entire PSE2 period.
6.1 Operating Expenditure Overview
The table in Schedule 6a requires an allocation of operating costs between three categories:
“corporate overheads”, “asset management and airport operations” and “asset maintenance”.
Auckland Airport has undertaken this allocation based on the primary activities of the
business units where costs are incurred.
We note that the asset maintenance cost category variance shown therefore includes not only
the ‘pure’ $2.0m Repairs and Maintenance variance explained in the next table, but also
variances for other types of operating costs that were incurred in business units whose
primary activities relate to repairs and maintenance, e.g. the Engineering Support Services
business unit where the majority of engineering support staff costs reside.
Operational expenditure – variance analysis
The time series comparison of actual to forecast expenditure is shown in the graph below for
PSE2. It is important to note that, as agreed with the airlines and their representatives, where
forecast route development and other operating expenditure growth was highly uncertain at
the time of setting prices for PSE2, Auckland Airport did not include those costs or the
associated incremental aeronautical volumes in the price setting forecasts.
In practice more aeronautical demand growth has materialised than forecast and this has
materially affected operating costs. Higher passenger and aircraft movements than forecast
have been associated with higher costs such as route development marketing, outsourced
operations, bus operations, staffing and repairs and maintenance.
Period to date total regulated costs were $60.4m (+14.9%) more than pricing forecasts. The
following chart summarises the differences between actual operating costs incurred and the
operating cost forecasts that were developed assuming only “organic” aeronautical volume
growth (i.e. excluding incremental future route development marketing activities).

28




Auckland Airport Disclosures FY17 30 June 2017


An operating efficiency target of a 2.8% real reduction in operating costs per passenger was
built into PSE2 prices. There have been mixed results in terms of our ability to deliver
operating cost efficiencies. Overall, there has been a reduction in per passenger costs over
the five-year period which was primarily driven by the material increase in passenger growth.
If we compare underlying costs (which exclude route development and unforeseen necessary
new costs), operating costs per passenger have been less than the pricing forecast. As
illustrated in the following chart, underlying costs reduced over the PSE2 pricing period down
to $4.93 per passenger. Whilst scale economies have been achieved in some areas, in
others we have incurred unforecast operational expenditure to provide additional peak
support, and experienced increased complexity and the need for temporary operational
solutions to accommodate material brownfields construction programme in a live operational
environment.

29




Auckland Airport Disclosures FY17 30 June 2017


The primary causes of period to date increases in operational expenditure have been:
• Aeronautical marketing and promotions investment was, as intended, above pricing
forecasts. Auckland Airport has invested $24.2m more through PSE2 in route
development to stimulate growth. Compared to PSE2 forecasts, total passengers for the
period has been 17.2% higher. This variance to pricing forecast was led by 17.7% higher
domestic passenger movements and 16.8% higher international passenger movements.
• Personnel costs: new business structures to support personnel and safety, peak staffing,
new requirements for fire rescue and crystallisation of incentives.
• Repairs and maintenance: ground maintenance, building, airbridge, plant and equipment
and runway maintenance.
• Consultancy and legal: special projects not contemplated at time of pricing (e.g. SMART
Trials, Project Capricorn) and costs associated with the development of the regulatory
regime (s56G and merits appeal costs).
For FY17 total operating expenditure of $106.2m was $19.4m (22.4%) above the pricing
forecast of $86.7m (2016: $15.1m, +18.2%). The variances are described below:
Area
FY17
Variance
PSE2
Variance
FY17 variance explanation
Marketing,
Promotions &
PR
$7.6m $26.6 m Marketing, Promotions and PR costs were $7.6m more than
pricing forecast in FY17. As in prior years, this variance is
within the Corporate Overheads cost category. The variance
relates to aeronautical business development activities
associated with attracting and supporting new air services for
Auckland and
New Zealand, through proactively targeting
routes and markets. The variance is a mix of committed
airline route marketing (payable when airlines achieve

30




Auckland Airport Disclosures FY17 30 June 2017

agreed capacity targets) and business-as-usual (BAU)
marketing (including airline and non-airline marketing,
general route and destination marketing, market research
and company-wide promotions). There were a number of
additional routes and services supported that were not
included in pricing forecasts including (but not limited to) new
airlines and services to the Americas, increased frequencies
and capacity to Singapore and marketing support for
increased mainland China services. The full benefit of this
business development marketing spend resulted in higher
international growth than organic growth in current and future
periods.
Personnel
Costs
$4.1m $19.1 m Personnel costs were $4.1m more than the pricing forecast
for FY17. Within the terminal team, we added passenger-
facing resources with both year-
round and summer peak
Passenger Experience Assistants and an eight-month
Customer Contact Centre trial. Increases were also driven
by further investment in the teams that are responsible for
supporting our Airport employees, in particular the people
and capability team and the health and safety team.

Since prices were set, there have been a number of changes
to Auckland Airport’s corporate structure. In response to
changes in Health and Safety legislation and a growing need
for a broadened HR function,
a new General Manager
position was created and the team built.
5
The Marketing and
Airport Development and Delivery teams were also formed.

In response to a material increases in the Long Term
Incentive plan, due to share-market performance, these
contracts were revised in FY16. Following this, costs reduced
significantly relative to earlier years of this pricing period.
Repairs &
Maintenance
$2.0m $6.6 m Repairs & Maintenance (R&M) costs were $2.0m more than
pricing forecast in FY17. R&M costs fall mostly within the
Asset Maintenance cost category an
d include contracted
services. The major areas of works contributing to the
variance include increased costs for grounds maintenance,
aerobridge upgrading works, the pond sediment removal
programme, higher costs for runway marking and rubber
removal and increased corrective maintenance across the
business namely in regard to lifts, generators and chillers.
Consultancy,
Audit & Legal
$4.2m $9.7 m Consultancy, Audit & Legal costs were $4.2m higher than
pricing forecast in FY17. Asset Management and Operations
consultancy costs were $1.7m higher than pricing due in part
to costs attributable to the ongoing SMART Approaches
noise monitoring. In September 2015, together with Airways
New Zealand and the Board of Airline Representatives New
Zealand (BARNZ), we commenced the trial of a third SMART
flight path to the airport from the north. SMART Approaches
use satellite-based navigation to improve the management of
airspace around Auckland Airport, and aim to reduce the
impact of aviation on the environment and communities,
while maintaining safety levels. This year Auckland Airport
also commissioned reports on security operations and fire
management at the airport to identify how we could further
improve the management of these critical areas.
Implementation of the report’s recommendations has already
commenced. Other areas of increased consultancy include
additional planning for the FY17 peak period through

5
Existing health and safety and procurement teams were centralised from Asset Management & Airport Operations
to pan-airport Corporate Overhead functions.

31




Auckland Airport Disclosures FY17 30 June 2017

Operation Capricorn. Corporate Overheads consultancy was
$2.4m above forecast, dominated by the PSE3 pricing
consultation and the Commerce Commission IM review.
Auckland Airport also invested in traffic management
strategies to address growth in utilisation across the roading
network.
Management
Fees
$3.8m $7.1 m Management Fees were $3.8m higher than pricing forecast
in FY17. These costs fall into the Asset Maintenance cost
category and cover outsourced operations. The main drivers
of this variance were the AVSEC charges for staffing
Checkpoint Charlie which have been passed on to Auckland
Airport since April 2014 and were not included in PSE2
pricing forecasts; increased baggage handling services costs
as the contract moved to 24/7 cover; a material increase in
both international and domestic bussing operations (ongoing
since December 2015); and higher Emperor Lounge costs
due to growth in airlines and lounge usage.
Utilities/Other -$1.9m -$5.0 m Utilities costs were $1.9m lower than pricing forecast in FY17
including ongoing savings from Terminal lighting and cooling
efficiency projects implemented during this pricing period.
Other
expenses
-$0.5m -3.7 m Other costs (including Insurance, Travel & Training,
Cleaning, Rates, Shareholder expenses, Telco & Computing
and Other Expenses) delivered a combined total of $0.5m
savings compared to pricing forecast in FY17.
Total
Variance
$19.4m $60.4m

6.2 Capital expenditure overview
The base case forecast capital expenditure for PSE2 represented Auckland Airport's best
view of the likely range of capital expenditure required over the forthcoming pricing period.
The airlines generally agreed the level and timing of planned investment was efficient and the
Commission concluded that ID appeared to have promoted an efficient investment plan for
2013 – 2017.
We noted that project priorities would be influenced (and potentially constrained) by the
nature of demand growth and that capital expenditure decisions could not be considered in
isolation from the actual demand environment in the period.
As described in earlier disclosures, there has been material repurposing of the Schedule 18
capital priorities. All major changes to capital expenditure plans have been discussed with the
airlines and Board of Airline Representatives New Zealand (BARNZ). Auckland Airport has
continued to involve airline expert groups on particular projects and to update broader
stakeholders as part of regular engagement through Quarterly Engagement Updates. Further
history on capital expenditure vs plan can be found in the disclosures for FY13- FY16.
As set out in Note 1, we have now entered a phase of higher than forecast capital expenditure
in line with the changed demand environment since 2015.
Capital expenditure – variance analysis
The time series comparison of actual to forecast capital expenditure is shown in the graph
below for PSE2. As a consequence of changing market conditions (e.g. new regional
entrants) and exceptional growth, we have responded to new requirements (e.g. regional
capacity) and brought forward projects (e.g. Pier B contact stands). For the year ended 30

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Auckland Airport Disclosures FY17 30 June 2017

June 2017 actual capital expenditure was $233m, materially above the $48m PSE2 pricing
forecast. Consequently, total PSE2 capital expenditure of $522m exceeded the pricing
forecast by 80%.

Key Capital Expenditure Projects Variance Analysis
The table below briefly describes line item variances of more than 10% period to date.

Key Capital
Project
PSE2
Forecast
FY17
Variance
PSE2
Variance
Commentary
Short term
capacity
enhancements
(DTB)
31,883 4,206 (2,161) Variance less than 10%.
Baggage
Reclaim
Expansion
(RECLAIM 1)
11,214 - 2,087
The aims and objectives of the Baggage
Reclaim Expansion were to increase the
baggage reclaim system's handling capacity,
improve passenger circulation and eliminate
bottlenecks in this area through investment in
two Code F baggage belts.
The first new Code F belt delivered in 2014
cost materially more than anticipated on
account of the identification of multiple
services in the area requiring diversions.
Further, it became clear that the cost estimate
in pricing for two Code F compliant belts was
unrealistic. The cost of the second Code F belt
is set out below in RECLAIM 2.
Baggage
Handling System
expansion (or
BHS 2)
12,371 1,392 (9 ,888) This objective of this project was to provide
additional check-in baggage feed capacity
from the vicinity of Counter 60 to the second
hold baggage screening hall, providing a third
baggage route to the baggage makeup hall
and new baggage hall in order to meet
passenger growth and to increase
redundancy. The project was delayed
because the delivery pathway was difficult.
The constructability issues were overcome
and the project objectives were met as part of

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Auckland Airport Disclosures FY17 30 June 2017

Key Capital
Project
PSE2
Forecast
FY17
Variance
PSE2
Variance
Commentary
the Level 1 project described below.
Check in project 7,151 7,407 845 Less than 10% variance.
This programme targeted an increase in the
efficiency and use of the existing space. The
project aimed to meet passenger service
expectations and increase the number of
passengers that could be processed in the
existing space, including through the
introduction of new check-in technology.
Among other things, this would help to defer
the need for capital investment, which would
otherwise have been required to expand the
check-in hall.
Specific FY17 initiatives were the delivery of
white label common user self-service kiosks
for international carriers expressing interest in
the product and the reconfiguration of Check-
in zones B-E to increase the number of check-
in counters and improve the overall flow of
passenger check-in. This initiative was a cost
effective solution to meeting higher than
expected demand.
ITB Forecourt
Reconfiguration
(or FC3)
14,414 (9,712) (14,414)
This project was re-prioritised as part of the
work Auckland Airport did in realigning the
capital plan with BARNZ for a Southern
Domestic solution.
Landside ground
floor capacity
enhancement
16,099 (13,674) (16,099)
The project was re-prioritised as part of the
work Auckland Airport did in realigning the
capital plan with BARNZ for a Southern
Domestic solution.
New Stand 1 10,119 1,427 (1,993) The aims and objectives of the stand
programme was to incrementally deliver
contact and non-contact stands on a demand
led basis.
Two stands were included in the pricing
forecast. The first stand priority confirmed
following the review of demand and supply
conditions post slot filing and hand back was
two Code E non-
serviced MARS stands
constructed Epoxy Asphalt (Stands 80 & 81).
The stands were delivered to meet demand
for aircraft laying over for longer periods
throughout the operational day.
New Stand
Project 2 – Stand
74
11,750 29,235 20,818 The second stand priority was Stand 74
delivered in FY16. This project cost more
than a standard stand, as it included a taxilane
and because customers were clear that their
preference was for fully serviced remote
stands.
Taxilane 1 11,244 - (11,244) As noted above an additional taxilane was
delivered together with Stand 74 instead of as
a standalone investment.
Further Stands 10,789 10,789 Due to unprecedented and unexpected
growth, the stand programme was extended to
include Stand 75, which was delivered in

34




Auckland Airport Disclosures FY17 30 June 2017

Key Capital
Project
PSE2
Forecast
FY17
Variance
PSE2
Variance
Commentary
August 2017.
In FY17 works were undertaken to construct
stand 19, a fully serviced Code F stand
located to the west of Pier B due for
commissioning in FY18.
Overall, $52m was invested in stands over
PSE2 versus a forecast of $33m for the five-
year period.
Pier B ground
boarding project
(or PIERB 1)
15,275 60,457 55,318
In response to forecast increases in bussing
over PSE2, additional contact stands were
included in the original capital forecast for
PSE2. However, in response to airline
feedback from airlines the contact stands were
removed from the baseline programme, with a
focus retained on increased ground boarding
over the period.
At the time of the pricing
decision bussing levels were very low but
forecast to increase.
On this basis, when prices were set this
project therefore contemplated the expansion
of Pier B by way of a bus lounge. The bus
lounge was delivered as part of the solution
for NW15 peak demand. This product was
warmly received by the airlines as the
proximity to aircraft has been improved,
shortening distances for the specific bussing
operation.
When it became apparent mid-period that
ground boarding in itself was not sufficient, we
responded to requests from airlines to
commence the design and build of additional
contact stands.
Feasibility options for the further extension of
Pier B were consulted on
in 2015 and a
concept design agreed with the airlines for two
new contact gates in 2016 and a further bus
lounge extension. The revised Pier B project
will provide at least the first stand before the
summer peak and is foreca
st to be fully
completed in FY18.
Stands 17 & 18 were reconfigured as part of
this project to provide improved capability as
at August 2017.
Asphalt apron
replacement
4,493 (256) 2,166 Variance driven by higher cost of Taxiway Kilo
works behind contact stands 1, 3 and 5
caused by an increase in larger aircraft
operating around Taxiway Kilo than in the
past.
Concrete runway
and apron
replacement
28,850 1,137 (2,647) Variance less than 10%.
ITB Airbridge
refurbishment
5,239 442 1,766 Period to date investment is higher than
forecast consistent with airline feedback to
invest more in the airbridge refurbishment
programme. The programme was extended
following requests to improve the passenger
experience when embarking and

35




Auckland Airport Disclosures FY17 30 June 2017

Key Capital
Project
PSE2
Forecast
FY17
Variance
PSE2
Variance
Commentary
disembarking aircraft remotely. This resulted
in the purchase of two Aviramps that operate
like a remote airbridge. There was also an
upgrade of GPU’s and Duct Reelers
.
Capability to pull our grid electricity to replace
APU’s across all stands and enable cold start
of 787-900 aircraft is also a part of this capital
investment, delivering reduced operational
spend for airlines.
Taxiway Lima 21,534 5 (6,991) As previously disclosed, this project was
delivered under budget.
Premium lounge 0 115 9,051 During FY15, a carrier approached the airport
seeking a new premium lounge proposition.
Through a collaborative process, a preferred
site was established for the development of
this lounge and commercial agreement
reached for the shell and core facility to be
provided by the airport and fitted out by the
carrier. The project was completed in FY16.
ITB Level 1 –
Phase 3
0 64,527 102,710 In 2014, Auckland Airport presented to airlines
key findings of the Core Capacity Study that
identified the key priority areas for repurposing
of capital expenditure. This included the need
to address the capacity in outbound
emigration and security. It was also
acknowledged that unless the airside dwell
area was also increased, the bottleneck would
just be moved in the system. Concept design
then proceeded for the development of a
departures project that provides a new
international emigration facility, an enlarged
truck dock and an airside dwell area (including
retail) for international passengers. The design
also enabled a pathway for additional check-in
baggage feed capacity targeted in the period.
As one of the biggest brownfields
developments ever undertaken by Auckland
Airport, the project is being delivered in
multiple stages. The baggage handling system
and the new emigration facility were delivered
in 2017. The overall targeted completion of the
project is in the first half of calendar 2018.
The component of this project cost that was
allocated to Retail is excluded.
ITB Baggage
Phase 1.2
0 1,106 10,463 A second Code F belt was delivered in 2015.
Northern
Runway Mode of
Operation
0 1,107 5,782 This expenditure relates to protecting the
ability to construct and operate a long haul
capable northern runway under the Resource
Management Act. This expenditure relates to
design fees and associated professional fees
as well as capitalised salaries of Auckland
Airport staff dedicated to this process.
Operations
centre relocation
0 (522) 7,276 This expenditure relates to the relocation of
the international operations centre and the key
operational utilities that were housed within it.
These utility assets included the main

36




Auckland Airport Disclosures FY17 30 June 2017

Key Capital
Project
PSE2
Forecast
FY17
Variance
PSE2
Variance
Commentary
incoming telephone exchange for the airport
as well as key back-up generators for the
terminal in the case of an electrical outage. All
of these assets were fundamentally at the end
of their useful life. Furthermore, investigation
of the building revealed both asbestos as well
as live underground services traversing the
building. The location of the building also
represented a key constraint to the
development of the terminal for increased
emigration capacity, increased airside facilities
servicing and airside dwell.

Regional
Capacity
Enhancement
0 4 8,998 Apron, walkway and associated infrastructure
w
orks associated with airfield regional
capacity enhancement
AES ARFF
Vehicle
Replacement
0 0 6,082 In PSE2 Auckland Airport replaced four
existing fire appliances that were at the end of
their operational lives with four Rosenbauer
Panthers that are specifically designed as
airfield firefighting vehicles. A further
replacement of one existing appliance is
planned for early PSE3.
AES Marine
Craft
Replacement
0 0 5,254 A review in 2012 identified that an upgrade of
the existing marine fleet and infrastructure
was required to remain compliant with ICAO
marine rescue response regulations. This
project involved the replacement of the rescue
hovercraft and two rescue boats,
and an
upgrade of the boat shed and access ramp
and was classified as other capex.
AOS Upgrade 0 0 5,207 In PSE2 Auckland Airport undertook a
replacement project of its existing AOS that
was 15 years old and at the end of its
operational life. An AOS is the core system
that manages the aeronautical operations
including FIDS, allocation of gates and stands
for aircraft and resource allocation systems
(Check-in counters, Bus operations, labour
resourcing). The investment in the AOS was
done in consultation with relevant
stakeholders including Joint Boarder
Agencies, Ground Handlers and Airlines. The
rationale for undertaking the project was to
ensure and enhance the efficient operation of
the Airport.
Other capital
expenditure
88,114 25,803 51,950 Other capital expenditure is spread amongst
numerous proj
ects and programmes. FY17
expenditure was targeted at:
• The continuation of the Terminal
Development Plan and Airport Surface
Access Network studies and roading
initiatives including the Puhunui
roundabout upgrade, Landing roundabout
Rebuild, Bus lanes for
GBMD (design),
Terminal Exit Road, Terminal
Contingency Bus Route.
• The continuation of the closed circuit

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Auckland Airport Disclosures FY17 30 June 2017

Key Capital
Project
PSE2
Forecast
FY17
Variance
PSE2
Variance
Commentary
television camera replacement
programme, enhancing the security
capability across the terminal asset.
• The management of aircraft noise
mitigation with the general public as well
as other key stakeholders, including the
provision of key tools and support as well
as the physical sound proofing of
properties directly affected by the airport’s
noise profile.
• The continuation of replacement and
installation of new international baggage
system diverters, ensuring the reliability
and performance of the international
outbound baggage system.
• The creation of an expanded common
use commercial passenger lounge which
was delivered in September 2017
•
The continuation of upgrade works on the
aircraft refuelling network to ensure a
complaint and certified fuel hydrant
system is maintained.
• Commenced and completed a project to
expand the low risk passenger pathway
through MPI (‘the Green Lane” to improve
arriving passenger processing times and
experience.
• The upgrade of public toilets in the ITB
Arrivals Baggage Hall to meet increased
passenger volumes.
For earlier year variances please refer to
previous disclosures.
Total capex
variance
184,992 232,127 Auckland Airport has responded to the
changing conditions experienced through
PSE2 by re-purposing and where appropriate
accelerating
core airport infrastructure
investment. Repurposing was required
primarily in response to the changed
assumption around the Masterplan location for
the new domestic terminal. Acceleration of
capital investment has been necessary due to
the unprecedented
aeronautical demand
growth that has had system wide impacts.
The key bottleneck areas Auckland Airport
has been able to address in the period have
been aircraft stands and outbound processing.

Note Schedule 7: Segmented Information
Schedule 7 provides a segmental breakdown of the regulatory profit and return on investment
data for the regulated airport business contained in Schedules 1 and 2. The vanilla (pre-tax)
return on investment can be estimated for each regulated segment for the year ended 30
June 2017 by dividing regulatory profit/loss by regulatory investment value. Post-tax return on

38




Auckland Airport Disclosures FY17 30 June 2017

investment can be estimated by allocating the notional interest tax shield total from Schedule
1 across the segments, (based on relative regulatory investment value in each segment).
The estimated distribution of Auckland Airport’s average annual post-tax FY17 ROI of 10.8%
across the regulated segments is as follows: Passenger Terminal 14.4%, Airfield 8.4%,
Aircraft, and Freight 11.1%.
While passenger charges are allocated entirely to the Specified Passenger Terminal segment
in these disclosure statements, as described in detail in Auckland Airport’s Price Setting
Disclosure for FY13-FY17, a portion of those charges actually relates to costs that are shared
by airfield activities. This, in effect, spreads actual ROI more evenly between the terminal and
airfield segments than implied in the disclosure schedule.
Aircraft and freight charges are determined via arms-length transactions between Auckland
Airport and its aircraft and freight tenants and these negotiations are underpinned by market
based valuations and contractual dispute resolution procedures. The renegotiation of leases
occurs regularly and on different cycles to the five yearly aeronautical price consultation
process.

Note Schedule 8: Consolidation Statement
8.1 Depreciation
A part of the difference between regulatory and GAAP depreciation is due to a requirement
under GAAP to depreciate assets from their commissioning date resulting in depreciation for
part years of new assets. The IMs do not provide for new assets to be depreciated for
aeronautical disclosure purposes in the year they are commissioned resulting in lower
regulatory depreciation than GAAP depreciation for those assets.
Another major factor in the difference relates to different revaluation policies for GAAP and
regulatory reporting. Assets have been revalued for financial reporting purposes, which has
increased the value of non-land assets and in turn increased the depreciation expense on
those assets for financial reporting (GAAP). For regulatory purposes, the Airport business
does not revalue non-land assets in the same way, which leads to a difference in depreciation
expenses for financial reporting and regulatory purposes. In the 2017 financial year, the
difference between the depreciation expense for regulatory and financial reporting purposes
is more pronounced than previous years due to the restatement of the RAB consistent with
the IM determination and Auckland Airport’s pricing approach for PSE2. This has reduced the
value of Auckland Airport’s RAB and therefore lowered the depreciation expenses for
regulatory purposes.
8.2 Revaluations
The valuations for the Airport Company - GAAP include the revaluation movements on
investment property ($91.9m increase). Land and infrastructure assets within the property,
plant and equipment portfolio were not revalued at 30 June 2017.
The valuation approach to determining fair value of an asset under GAAP is determined,
where possible, by reference to market based evidence, such as sales of comparable assets
or discounted cash flows. Where fair value of the asset is not able to be reliably determined

39




Auckland Airport Disclosures FY17 30 June 2017

using market based evidence, optimised depreciated replacement cost is used to determine
fair value.
The revaluations for the Airport businesses consist of a CPI roll-forward for aircraft and freight
assets as at 30 June 2017 consistent with the Input Methodologies determination and
Auckland Airport’s pricing approach for PSE2. There are no revaluations for airfield and
terminal assets.
8.3 Tax Expense
The tax expense for the Airport Company-GAAP is reduced by deferred tax changes in the
underlying asset and liability values for financial reporting. The reduction from deferred tax
movements results from the decrease in accounting carrying values relative to tax carrying
values, which decreases the taxable temporary differences. This is different to the IM-
compliant approach, which specifies a tax payable approach and does not recognise deferred
tax movements.
The tax expense for the Airport Businesses also includes a notional interest deduction as
calculated in Schedule 1(b)(i) whereas the GAAP tax expense is before interest revenue and
expenses.
8.4 Property, plant and equipment
As noted above, the GAAP values for property, plant and equipment are carried at fair value.
As noted above in 8.2, for regulatory purposes, only aircraft and freight assets are revalued
using a CPI roll-forward approach. There are no revaluations for airfield and terminal assets.
A difference also arises in relation to Future Use assets which are excluded from "Airport
Businesses" but included in "Airport Businesses - GAAP" column. The final differences relate
to depreciation differences noted in 8.1 above.

Note Schedule 9: Asset Allocations
There has been no material change from prior year asset allocations, however increased
explanation has been provided to explain the logic behind the asset allocators.
9.1 General Information on Asset Allocations
Auckland Airport’s asset allocation methodology involves the following key steps:
(1) Reviewing assets initially at the business unit level and then by exception at the asset
type level. The business unit provides insight into the activities or services enabled by
the asset.
(2) Identifying business units whose assets are directly attributable to Specified Airport
Activities and directly attributing their assets accordingly.
(3) Identifying business units whose assets are indirectly attributable to Specified Airport
Activities (i.e. that are common or shared) and allocating those assets to Specified
Airport Services using causal or proxy cost allocators.

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Auckland Airport Disclosures FY17 30 June 2017

The Asset Allocators table in Schedule 9a of the Disclosure statements summarises the
common assets that have been shared across two or more regulated activities, or across both
regulated and non-regulated activities.

Note Schedule 10: Cost Allocation
There has been no material change from prior year cost allocations.
10.1 General Information on Cost Allocations
Auckland Airport’s financial reporting system groups costs into several business units
reflecting the various aeronautical and non-aeronautical business activities undertaken by the
company. For the purposes of allocating costs in the disclosure reports, Auckland Airport has
apportioned each business unit’s operating costs across both regulated and non-regulated
activities. This was performed as follows:
(1) Identified the activities undertaken by each business unit;
(2) Identified business units whose costs are attributable to a single regulated aeronautical
activity and directly attributed those costs to those activities accordingly;
(3) Identified business units whose costs are shared across more than one regulated
activity and/or between regulated and non-regulated activities and allocated those
costs to those activities accordingly;
(4) Used causal allocators where appropriate to allocate those common costs across
regulated and/or non-regulated activities;
(5) Allocated the remainder of common costs using proxy allocators;
(6) The report on cost allocations lists the costs and describes the allocators used for
those business units whose costs are either shared within regulated activities, or
shared across both regulated and non-regulated activities. A more detailed description
of key cost allocators follows:
(a) The company-wide rule is used to apportion the shared costs of business unit
activities that support both regulated and non-regulated activities. This rule
comprises the following two components. The first component uses the share of
the international terminal building space (“ITB space”) to proxy a fair share of
regulated costs and non-regulated costs. The second component splits the
regulated costs across terminal and airfield activities based on the aeronautical
revenues split rule.
(b) The aeronautical revenues split rule is used to apportion shared aeronautical
costs across the three regulated activities. This rule is calculated based on the
split of directly attributed aeronautical revenues from the three regulated
activities.
(c) Airfield and terminal revenues are used to share costs associated with regulated
activities that are common to airfield and terminal activities, but not to aircraft and
freight (for example the aeronautical pricing process).

41




Auckland Airport Disclosures FY17 30 June 2017

(d) The employee time split rule is used to apportion the shared costs of business
units whose expenses are dominated by employee-related costs. The
apportioning between regulated and non-regulated activities is based on salary-
weighted time splits and it differs between business units reflecting the differing
responsibilities and activities of staff within each business unit.
(e) The utilities rule allocates electricity, water and gas charges that are booked to
internal business units across regulated and non-regulated activities based on
those business units' individual allocation rules. All external utilities charges are
classified commercial direct (non-regulated activities). The assets and costs of
the utilities business units are split according to the same proportions.
(f) The stormwater and wastewater rule is only used to allocate the operating cost
of the stormwater and wastewater business unit. This is necessary because
operating expenditure is not managed discretely between stormwater and
wastewater. Therefore, a weighted average combination of the underlying asset
rules is used to allocate the cost of this business unit. The key steps are as
follows:
(i) The stormwater rule examines sealed (impermeable) surface area usage
between regulated and non-regulated activities.
(ii) The wastewater rule examines metered water usage between regulated
and non-regulated activities.
(iii) The two rules are combined based on the relative book value of the
stormwater versus the wastewater assets and the underlying rules in order
to allocate the operating costs associated with this business unit.
(g) The roadways rule is used to apportion the shared costs of the roadways
business unit across regulated and non-regulated activities based on the
regulatory coding of individual roading assets. Individual roading assets
comprising the roading network (e.g. paved areas, kerbside and footpaths) have
been given regulatory codes, in most cases reflecting the location of those
assets. Operating costs associated with roads that primarily carry traffic to and
from the international terminal are allocated across a range of regulated and
non-regulated activities using the ITB Space Allocation Rule.
(h) Engineering and support services costs are allocated across regulated and non-
regulated activities based on a two-step process:
(i) First, the internal repairs and maintenance charges to business units are
summed by internal business unit.
(ii) Then the allocation rule is calculated based on the product of the charge
by business unit and the default rule associated with each business unit
(e.g. direct or otherwise).
10.2 Comparison of Outcome of Cost Allocations
Overall operating expenditure allocated to regulated categories was unchanged from FY16
(68%) and considerably lower than 75% in FY11. These changes are not due to the cost

42




Auckland Airport Disclosures FY17 30 June 2017

allocation processes themselves that have been highly consistent across FY11 to FY17, but
instead reflect faster growing costs in the unregulated (non-aeronautical) segments.

Note Schedule 11: Reliability Measures
11.1 Reliability
Trends in faults, interruptions and on-time performance are monitored regularly by
Management. When an interruption causes an on time performance delay, an investigation is
conducted and a root cause report prepared.
Actions are identified to prevent re-occurrence of the interruption and in order to continually
improve the service provided to airlines and passengers.
The tables outlined in Schedule 11 report the number and duration of material service
interruptions – discussed further in the following sections. To provide the most appropriate
context for consumers, an alternative way to view this information is to consider the proportion
of the time that the material service is available. For the disclosure year ended 2017, the
percentage of time that Auckland Airport’s material services were available was as follows:

Runway 100%
Taxiway 100%
Remote stands and means of embarkation/disembarkation 100%
Contact stands and air-bridges 99.9%
Baggage sortation system on departures 99.9%
Baggage reclaim belts 99.9%
11.2 Interruptions
Auckland Airport captures and records interruptions to its services through its fault
management system. All system faults are reviewed on a monthly basis to ensure that
interruptions that meet the conditions defined by the ID Determination are captured and meet
the definitioned requirements of the interruptions as specified by the Commission.
Auckland Airport is required to report interruptions for the following material services:
• Runway
• Taxiway
• Remote stands and means of embarkation/disembarkation
• Contact stands and air-bridges
• Baggage sortation system on departures
• Baggage reclaim belts
The number of interruptions for each material service are discussed in the following sections.
We note that the total number of interruptions has increased in absolute terms between FY16

43




Auckland Airport Disclosures FY17 30 June 2017

and FY17. However, the ratio of the number of interruptions to aircraft movements is very low
(0.05%), reinforcing the high percentage of time that Auckland Airport’s facilities are available.
There were 80 total interruptions in the 2017 financial year, up from 51 in 2016. The number
of interruption hours increased by 17.8 to 184.2 hours. Interruptions to contact stands and
airbridges were the primary driver of the rise in both the number and duration of interruptions.
The reasons for this are discussed further below.
11.3 Runway performance
In the 2017 financial year, there were three runway interruptions, totalling 50 minutes in
length. One interruption was caused by a hare found on the runway. The runway was closed
for 20 minutes while the debris was cleared, resulting in one on time departure (OTD) delay of
18 minutes. The second interruption was due to cracks found during a routine runway check.
The runway was closed for 15 minutes for assessment and caused two OTD delays totalling
34 minutes. The third interruption of 15 minutes was for a scheduled pavement repair. No
flights were delayed.
11.4 Taxiway performance
There was no interruption relating to taxiways in the 2017 financial year.
The up-gauging of aircraft on many routes to Code F and Code E is necessitating the
progressive strengthening of much of the aerodrome apron and taxiway system.
Auckland Airport has continued to work on upgrading asphalt on taxiways and the apron to
improve reliability. By conducting condition assessments of the asphalt through forensic
analysis and assessing the uses of the area, Auckland Airport can ensure that asphalt chosen
is fit for purpose. Using customised asphalt on areas servicing heavier aircraft optimises
whole of life costs by increasing the life of the asphalt and reducing the need for repairs. This
also improves the availability of the assets by reducing maintenance requirements.
11.5 Contact Stand and Air-bridge Performance
In the 2017 financial year interruptions to contact stands and air-bridges increased to 67, up
by 26 on the year before. Of the 67 interruptions, 32 caused OTD delays, and 46 (70%) were
caused by the airport (up 16 on last year). Airbridge interruptions totalled 167 hours, with the
airport primarily responsible for interruptions totalling 151 of those hours. More than 60% of
the total airbridge interruption hours was caused by seven interruptions that lasted longer
than 8 hours each. The seven long interruption events were all random in nature with no
normal predictability of failure. Three of the seven events were complicated by the need to
source the specialist skills required to complete the repair safely. A new safety protocol
discussed further below also contributed to the increased level of interruptions in FY17.
Some of the increase in airbridge interruptions can be attributed to the increase in movements
at Auckland Airport in 2017. To investigate whether there were any other trends in the root
causes of airbridge outages, Management conducted a review of airbridge performance for
the year. The review found that a significant number of interruptions were a result of issues
around the newly installed cab door safety interlock system.
Auckland Airport is committed to improving both the safety and performance of its airbridges.
The interlock system was installed to eliminate fall from height by bridge users. Unfortunately,

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Auckland Airport Disclosures FY17 30 June 2017

there were some teething problems that persisted during the progressive installation of this
system on 19 bridges during the 2017 financial year.
The problems included issues caused by bridge operators not following procedure and faults
caused by the misalignment of the door lock mechanism. The safeguards of this new system
meant that, if there was a problem, a technician was often required to rectify it. The vast
majority of the issues we had been having have now been rectified and we have worked with
operators to educate them on the correct operation of the system.
Auckland Airport has been working through an air-bridge refurbishment and replacement
programme to improve airbridge reliability. This programme will ensure required levels of
services are maintained and, in some cases, enhanced for those air-bridges that are nearing
the end their economic and useful life.
Projects completed in the 2017 financial year included:
• Cab door safety interlocking system installed on 19 bridges
• Internal refurbishments of older bridges with LED lighting and new wallboards upgrades
• Aircraft nose in guidance (NIGs) on site condition assessment carried out and a plan
developed for upgrading or replacement
Auckland Airport continues to increase the use of non-destructive methods of condition
assessment in its airbridge maintenance programme. Root cause analysis of failures
identified the need for more regular condition assessments to prevent air-bridge outages and
to ensure that Auckland Airport continues to deliver high quality services to its customers.
11.6 Baggage Sortation
There were 10 interruptions to the baggage sortation system in the 2017 financial year, up by
two on year before. The interruption hours to the baggage sortation system rose by seven
hours, to 17 hours. Auckland Airport were responsible for eight interruptions, totalling 15
hours.
Two interruptions caused almost half of the total baggage sortation interruption hours (eight
hours). These two interruptions also resulted in over six hours of combined OTD delays.
One interruption was due to a major IT network outage that affected all airport systems
including the baggage sortation system. Fall-back procedures were implemented to minimise
the impact on flight departures. The second interruption was caused by a third party
inappropriately accessing the area to complete construction works. New procedures were
introduced to minimise the risk of this occurring in the future.
Auckland Airport acknowledges the need to improve the performance of the system and is
committed to delivering ongoing continuous improvements. Initiatives that have been
undertaken include:
• A specific baggage handling system project (known as “BHS 3000”), which has delivered
significant enhancements through FY17 in conjunction with aligned capex projects. This
included investment in a new core IT network to improve resilience of key operational
systems, provision of additional system resilience, system tuning and optimisation,

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Auckland Airport Disclosures FY17 30 June 2017

improved check-in counter capacity, realignment of Transport Conveyor 1 and Transport
Conveyor 4, and a maintenance replacement programme for power curves and ploughs.
• In addition to capital initiatives, Auckland Airport has worked with external baggage
service providers to enhance system support, including increasing external support
resource, enhancing software support as the automation of the system becomes more
complex, and enhancing KPIs and monitoring systems.
• Improved processes and contractor management methodologies to reduce outages
cause by the actions of third parties.
• Increased engagement with Aviation Security to manage baggage screening.
• Employment of a baggage handling systems specialise to provide further support for
ongoing improvement initiatives.
Schedule 15 provides further details on baggage system enhancements that have been
undertaken during 2017.
11.7 Baggage Reclaim
In the 2016 financial year, Auckland Airport completed a 2,500 square metre expansion of its
international baggage hall, including the addition of two extra baggage belts. The increased
baggage capacity has helped us ease the pressure of rapid passenger growth during the
2016/17 summer peak season. Pleasingly, there was no baggage reclaim related
interruptions in 2017.
11.8 On-time departure delays
The Determination defines on-time departure (OTD) delays for the purposes of information
disclosure reporting as occurring when a scheduled service has been delayed by more than
15 minutes, primarily as a result of an interruption to specified airport services. The on-time
departure delays reported are therefore only a subset of all on-time departure delays that
occur.
On-time departure delays relating to interruptions have been captured in the fault
management system. All on-time departure delays that are visible to the apron tower are
logged in the system. Management conducts a detailed review each month to ensure that on-
time delays are correctly captured. As with the interruption reporting, the upgrades to the fault
management system and the Airport Operation System have improved the accuracy of on-
time departure delay information, by making it easier to determine whether a flight was on-
schedule or off-schedule.
There were total 59 OTD delays in the 2017 financial year, up 17 on the previous year. As a
proportion of the total number of movements, this represents 0.03%. Of these delays, 32
(54%) were due to contact stands and air-bridges outages and 24 (41%) were caused by
outages to the baggage sortation system. The remaining three delays were caused by runway
interruptions.
Total OTD delay hours increased by 14 hours, to 30 in the 2017 financial year. The increase
was mainly due to three baggage sortation system outages, two of which were discussed
earlier. The third was due to a software failure. Following this outage, procedures were

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Auckland Airport Disclosures FY17 30 June 2017

introduced to revert to manual input if a similar incident happened again. To reduce the
chance of the failure reoccurring, system upgrades were completed. The three outages
caused 20 flights to be delayed, totalling over 10 hours.
11.9 Fixed electrical ground power units
FEGP interruptions have been captured by matching the outage data from the fault
management system with data on when airlines were using stands with FEGPs. If an outage
over 15 minutes coincided with a time when the FEGP was required by an airline, it was
recorded as an interruption.
The percentage of time FEGP’s were available in the 2017 financial year was 99.1%, a slight
increase from 98.6% on last year.
In 2017, Auckland Airport continued with the scissor supports (crocodile arms) installation to
assist the use of FEGPs for all aircraft. This initiative was implemented to improve the health
and safety of ground handlers and to reduce the time taken to deploy FEGPs. A further two
units were installed in the 2017, taking the total number of installed units to 12.
Auckland Airport also continued to work with the airlines to support the introduction of new
wide body aircraft. Two new FEGP units capable of supporting wide body aircraft were
installed in the year. The remaining units will be upgraded once the existing units fail. Further
detail is available in schedule 15.

Note Schedule 12: Capacity utilisation indicators for aircraft
and freight and airfield activities
The reported runway description in these disclosures is consistent with the description that
Auckland Airport also reports in the Aeronautical Information Publication (AIP). There have
been no changes in FY17. The declared runway capacity under visual meteorological
conditions is set at 40 movements per hour. This reduces to 32 movements per hour in
instrument meteorological conditions, when a greater allowance is required for missed
approaches, and 20 movements per hour in fog.
The runway mode of operation depends on the wind direction. In most instances, aircraft land
and take off into the wind. Auckland Airport’s prevailing wind direction is westerly. Under
westerly wind conditions, aircraft land and take off using RWY 23L. RWY 23L is therefore
used more than the easterly facing RWY05R.
RWY23L is equipped with a Category III B instrument landing system. The system was the
first of its kind installed in New Zealand. Equipped with Category III B, pilots can land with a 0
feet cloud base and 75 metres of visibility. This has played a major part in reducing the impact
of fog and low-visibility on jet aircraft operations over recent years. RWY 05R is equipped with
a Category I instrument landing system. The system allows pilots to land with a cloud base of
215 feet and at least 800 metres of visibility. During low visibility operations, pilots are still
able to land using RWY 23L, whereas they may not be able to land using RWY 05R.
There are periods of the day where Airways and Auckland Airport are able to achieve greater
movements per hour than what is reported in this schedule. Airways conducted a capacity

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Auckland Airport Disclosures FY17 30 June 2017

study with Auckland Airport. The data is currently under review with the findings expected to
be released in early December 2017. In the interim, Auckland Airport has decided to retain
the number of movements reported.
In FY17, Auckland Airport’s international aircraft movements increased 10.1% and domestic
movements increased by 5.9%. Initiatives put in place to manage the additional growth
included:
• increasing the bus operations fleet to 10 units which enabled increased use of unbridged
international stands;
• the construction of taxilane Echo;
• additional ground service equipment storage area; and
• a new Code F (or two Code C) aircraft stand. An additional Code F designed stand was
commenced in FY17 with completion expected in early FY18.
In addition, a heliport opened to the north of the international terminal, allowing helicopters to
land at Auckland Airport without affecting runway capacity.
The Airfield Capacity Enhancement Steering Group (ACE) continued to meet quarterly. The
group is currently investigating the following initiatives to increase runway capacity:
• New separation initiatives around track divergence were put in place at both Wellington
and Auckland Airports which should offer the airport extra capacity in all weather
conditions
• Standardised taxi routes
• Review benefits for Alpha and Bravo exit alignments improving ease of navigation from
the runway.
• Backtrack option for 05 removed to create more standardised processes, maximising slot
capacity
• Use of ACDM to cluster aircraft types to optimise separation distances
• Additional hold bars for low visibility operations
In FY17, Auckland Airport progressed the flexible contingency runway project to the feasibility
stage. The feasibility study was completed in two stages. The first stage focused on the non-
compliant strip width at the Western end of the contingent runway and the second stage
focused on the constructability of all other infrastructure requirements (including but not
limited to navigation, lighting and signage) ensuring that all the mitigations identified in the
safety case are implemented. This project is expected to move into the concept design stage
in FY18.
Airways New Zealand, Auckland Airport and the Board of Airline representatives New
Zealand (BARNZ) continue to introduce of new satellite-based navigation SMART
Approaches, into Auckland Airport. A further SMART approach from the north was trialled
from 1 September 2015 to 31 August 2016. This flight path was known as Yellow U23. A

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Auckland Airport Disclosures FY17 30 June 2017

draft report on the trial was published for consultation in October 2017 and a decision on
whether to permanently operate the Yellow U23 will be made following the consultation
process.

Note Schedule 13: Capacity utilisation indicators for specified
passenger terminal facilities
13.1 General comments on terminal capacity utilisation
Auckland Airport’s preference is to maximise the utility of existing assets wherever possible
ahead of prudent increases in capacity. In this regard, Auckland Airport pursues innovations
and strives for best practice maintenance, management technology and operational
efficiency. Auckland Airport also places value on sustainable maintenance and construction
practices. A key objective is to provide reliable assets that ensure safe and efficient
operations with an optimised lifetime value for the asset. These are complemented by
Auckland Airport’s well established practices for exploring process efficiency options prior to
capital expenditure on investment.
We note that the floor areas included in the FY17 schedules are based on the available floor
and facilities as at 30 June 2017.
13.2 Key insights for FY17
In the international terminal, the capacity utilisation indicators suggest that the outbound
security screening area was operating beyond its peak capacity at times in FY17. This
reflects that expansion of these facilities was required, and a significantly larger space for
outbound security screening was commissioned in June 2017. Expansion to the passport
control area will be delivered in FY18 as part of our major upgrade of the international
departure area. This expansion will deliver a significant capacity increase for the emigration
process including significantly larger spaces for both passport control and security screening,
as well as providing a flexible footprint to manage future changes in security and technology.
During this construction period the terminal areas available to passengers will fluctuate as
new areas come on line and other areas are closed for construction.
Inbound bio-security screening is at capacity during peak hours and can also be significantly
impacted by off schedule arrivals. The pinch point for processing is at the bio-security risk
assessment stage. Auckland Airport and MPI installed an expanded green lane facility for the
2016/17 summer peak to enable the more efficient processing of low risk Australian and New
Zealand arrivals and to reduce the congestion in this area. We have also continued to work
collaboratively through our COG framework to explore initiatives to improve processing times
and reduce congestion through this space. Arrivals expansion is planned for PSE3.
The domestic terminal is nearing the end of its life span as a sole terminal serving all
domestic traffic. A DTB Capacity Enhancement project was completed during FY14. To
accommodate growth in the near term, Auckland Airport prioritised investment to alleviate
some of the main congestion points. The departure lounges, airside circulation, security
screening and baggage reclaim areas were all expanded to reduce congestion and improve
the customer experience. Further investment was made in FY16 to accommodate the arrival
of Jetstar’s regional services with a regional bus lounge and swing lounge facilities added.

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Auckland Airport Disclosures FY17 30 June 2017

The expansion of the domestic terminal is expected to extend the life of the facility over the
short to medium term. However, early in the next decade a new integrated facility will be
required. A feasibility study was completed in FY17 to outline the high-level requirements for
a future integrated terminal at Auckland. The in-depth concept design phase of this projected
commenced in the first half of FY18.
13.3 Floor space
In 2010, international aviation consultant Airbiz was engaged to compile estimates of capacity
and utilisation measures as required by the new information disclosure regime. As part of this
work, Airbiz completed estimates of the floor spaces. The reported floor spaces in Airbiz’ work
formed the base floor areas and have subsequently been reviewed and adjusted on an
annual basis for any changes.
Significant changes to floor spaces from the previous disclosure year are described below.
International Terminal Outbound
• Airside Circulation (Outbound) - decrease of 613 sqm on levels 1 and 2 due to areas
hoarded off for construction.
• Security Screening (Transit & Transfer) – 119 sqm increase of international to
international transit screening area to maximise length and throughput of the two security
screening machines.
International Terminal Inbound
• Baggage Reclaim – 90 sqm increase following the return to operation of baggage belt 5,
however this was offset by baggage belt 6 being hoarded off for construction works.
• Bio Security – 218 sqm increase for new green lane product for low bio-risk New Zealand
and Australia passport holders.
There were no significant changes to the floor space in the domestic terminal.
13.4 Notional capacity of baggage units and busy hour throughput
In 2010, Airbiz was also engaged to estimate the notional capacity of the outbound baggage
facilities and the inbound baggage reclaim units for both the international and domestic
terminals. Airbiz defined the notional capacity to be the sustainable practical capacity of the
baggage system.
The notional capacity of the international outbound baggage facilities has been assessed by
using a practical capacity of 17 bags per minute through each x-ray unit.
The notional capacity of the domestic terminal outbound baggage system was assessed by
ascribing a practical capacity of 1,000 bags per hour for each of the two units. One of the
units is owned and maintained by Auckland Airport, and the other by Air New Zealand.
Auckland Airport has seven international baggage reclaim belts, made up of five belts capable
of handling up to Code F aircraft and two belts capable of handling up to Code E aircraft. The
number of baggage belts operational at 30 June 2017 was reduced to six due to the closure

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Auckland Airport Disclosures FY17 30 June 2017

of baggage belt 6 to complete the level 1 capital works. All seven belts are expected to be
returned to service in FY18.
The notional capacity of the international baggage reclaim facilities as at 30 June 2017 is
calculated in “bags per hour”. This calculation is based on one reclaim unit being occupied by
code E aircraft (or smaller) aircraft and five reclaim units being occupied by a code F aircraft,
with assumptions made about the number of passengers processed per hour, and the
number of bags per passenger.
6
Note that at any single point in time the reclaim capacity can
be higher if larger planes than assumed arrive during the hour.
Airbiz used a similar methodology to estimate the notional capacity of the baggage reclaim
units in the domestic terminal. Airbiz’ notional capacity calculation assumes that a mix of
narrow body aircraft and smaller turbo props land in a typical busy hour. Airbiz assume that a
narrow body aircraft requires 20 minutes per claim unit and a turboprop aircraft requires 6
minutes per claim unit. The assumed load factor for both aircraft is 80%. An utilisation factor
of 75% is then applied. This gives a notional capacity in passengers per hour of 1,218. Airbiz
advised that approximately 70% of domestic passengers travel with checked in baggage and
carry an average of 1.1 bags (0.77 bags per passenger). Multiplying this by the notional
capacity in passengers per hour gives a notional capacity in bags per hour.
The number of bags processed during the busy hour for both outbound and inbound
passengers using the international and domestic terminals was calculated by multiplying the
number of passengers in the busy hour by the estimated number of bags per passenger. The
number of bags per passenger processed during the busy hour for passengers using the
domestic terminal was calculated using 0.77 bags per passenger, consistent with Airbiz’
advice used to determine notional capacity. The number of bags per passenger processed
during the busy hour for passengers using the international terminal was calculated using
figures provided by Auckland Airport’s baggage operator, Glidepath. Because outbound
bags are scanned, a record of the number of outbound bags processed during the year is
available. Dividing the number of outbound bags by the number of outbound passengers
(excluding transit and transfer passengers) gave an average of 0.99 bags per passenger.
Auckland Airport does not capture the number of inbound bags processed through the
baggage reclaim facilities. Auckland Airport has therefore calculated the number of bags
processed during the busy hour for inbound passengers using the international terminal by
assuming that the number of inbound bags per passenger was the same as the number of
outbound bags per passenger.
13.5 Passport control
Customs New Zealand operates a mix of electronic SmartGates and traditional manned
desks for both the emigration and immigration passport control processes at Auckland Airport.
The notional capacity during the passenger busy hour for outbound and inbound passport

6
The calculation assumes that a typical code E or lower aircraft has 330 seats and a typical code F aircraft has 489
seats. A load factor of 80% is assumed for all aircraft. Code E or lower aircraft are assumed to occupy a reclaim unit
for 40 minutes and a code F aircraft is assumed to occupy a reclaim unit for 45 minutes. This capacity is then scaled
by an utilisation factor of 75% to account for the fact that not every aircraft arrives on schedule. After the utilisation
factor is applied, the notional capacity measured in passengers per hour is 2,159. To convert this to a notional
capacity in bags per hour, this needs to be multiplied by the average number of bags carried by each passenger.
Multiplying the number of passengers per hour by Auckland Airport’s calculated bags per passenger gives the
notional capacity in bags per hour. Auckland Airport’s calculation of bags per passenger is explained in more detail
below.

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Auckland Airport Disclosures FY17 30 June 2017

control has been calculated by considering the number of SmartGates, the number of
emigration and immigration desks, the transaction time per SmartGate and the transaction
time per emigration/immigration desk.
In FY17, the SmartGate Plus product (a combined kiosk and gate) was installed for inbound
passengers, following the successful install in the outbound process in FY16. The average
transaction time for the SmartGate Plus machines is estimated at 20 seconds, 10 seconds
faster than the SmartGate product. 15 SmartGate Plus machines were installed to replace the
eight SmartGates, resulting in increased notional capacity and improved facilities for
passengers. The SmartGate facilities can presently only be used by New Zealand, Australian,
United States, United Kingdom and Canadian passport holders who are over 12 years of age,
however the number of nationalities eligible to use the facility may be increased by Customs
New Zealand in the first half of FY18.
The transaction time per passenger at an emigration counter was estimated to be 30 seconds
and the transaction time per passenger at an immigration counter was estimated to be 45
seconds. The transaction time at emigration and immigration counters was adjusted by an
efficiency factor of 80% to allow for considerations such as the time to walk from the queue to
the counter. It should be noted that the notional capacity will not be achievable in all
circumstances. If an aircraft has relatively fewer passengers able to use the SmartGates, the
practical capacity will be lower.
13.6 Security screening
The notional capacity of security screening during the passenger busy hour for both the
international and domestic terminals was based on Airbiz’ estimate of each security unit’s
processing capacity. Airbiz estimated that each security screening unit can process 270
passengers per hour. The notional capacity was calculated by multiplying the number of units
by 270.
An additional security screening machine was installed in the international terminal for the
2016/17 summer peak, taking the number of security screening machines to seven.
The identified “busy hour” for inbound security screening is not necessarily the same busy
hour for transit and transfer passengers. For example, during the identified busy hour for
security screening, only 11 passengers were estimated to have been processed through
international transit and transfer screening. To provide more meaningful information, we have
estimated the busy hour for transit passengers only – which shows 350 passenger processed
during that hour, representing 65% of the notional capacity of the facility.
13.7 Departure lounges
The number of reported seats in both the international and domestic terminals was based on
a physical count in July 2017.
13.8 Biosecurity screening and customs secondary inspection
The notional capacity of bio-security screening capacity during the passenger busy hour was
estimated with reference to an international capacity review completed by Airbiz in 2016. This
work was undertaken when reviewing the international slot parameters for the Northern
Winter 2016 season. This work identified that, consistent with previous capacity studies, that

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Auckland Airport Disclosures FY17 30 June 2017

the key pinch point for processing is at the bio-security ris k assessment stage. The per hour
capacity identified for risk assessment screening was identified as 2,145 passengers per
hour. This capacity assessment took into account the modifications to the bio-security areas
that were completed for the 2016/17 summer peak including the expansion of the green lane
for low risk New Zealand and Australian passport holders. Please note that this throughput
capacity is based on current bio-security risks, if the bio-security risk was raised due to a bio-
security event (e.g. fruit fly infestation) this throughput could be significantly reduced.
13.9 Total functional space
The total terminal functional area floor space for the domestic terminal is slightly less than the
sum of the individual floor space areas. Because airside circulation space is required for both
outbound and inbound passengers, there is an area that is “double counted” as it falls into the
calculation of both of these categories of floor space. The area that has been double counted
was subtracted from the total.
The number of working trolleys represents the number of trolleys that Auckland Airport’s
trolley provider, Smartecarte, had in use as at 30 June 2017.

Note Schedule 14: Passenger satisfaction indicators
14.1 General comments
During the 2017 financial year, Auckland Airport remained committed to continually making
improvements to ensure our passengers have safe and enjoyable journeys when traveling
through the airport. One of the tools we use to measure our efforts and performance on
facilitating and improving passengers’ journey is the Airport Service Quality (ASQ) survey.
Auckland Airport has been part of the Airport Service Quality (ASQ) benchmarking
programme for a number of years. Developed and implemented by Airports Council
International (ACI), ASQ is a survey programme that provides key passenger research and
insight, as well as essential management information.
The ASQ Survey is the airport industry’s standard for measuring passenger satisfaction.
Passengers’ satisfaction levels are measured while they are at the airport. ASQ surveys are
currently conducted at around 260 airports in 41 languages in 84 countries. Over 75% of the
world’s top 100 airports are currently part of the ASQ benchmarking programme. Each year,
some 600,000 passengers worldwide are interviewed for the ASQ Survey.
The ASQ Survey measures 34 key service areas and includes eight major categories, such
as access, check-in, security, airport facilities, food and beverage providers and more. All
participating airports use the same survey questions. This creates an industry standard set of
responses that allows Auckland Airport to track and analyse its performance, and compare its
performance against peers.
Through the use of ASQ benchmarking, Auckland Airport is able to:
• get an independent perspective on performance;

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Auckland Airport Disclosures FY17 30 June 2017

• identify areas of opportunity;
• understand passengers’ needs, priorities and expectations;
• prioritise improvement opportunities;
• set and monitor performance expectations; and
• manage change effectively.
The survey is conducted quarterly with a minimum sample size of 500 passengers per
quarter. The ASQ sample plan has quotas by airline and destination so that the total sample
is representative of Auckland Airport’s actual traffic mix. Interviews are undertaken with both
domestic and international passengers. All interviews take place in the boarding gate area
while passengers are waiting to board their flights. Each questionnaire is competed by one
passenger only.
To ensure that the survey results are as accurate as possible, ASQ publishes field work
guidelines on an annual basis. These guidelines outline the procedures to be followed when
implementing the sample plan and conducting passenger interviews. A copy of the field work
requirements can be found on Auckland Airport’s website –
https://corporate.aucklandairport.co.nz/news/publications/regulatory-disclosures

Passenger responses to each question are gathered according to a five-point scale: 1 = poor,
2 = fair, 3 = good, 4 = very good, 5 = excellent.
The quarterly score disclosed for each question is the weighted average of the responses.
While the tables in Schedule 14 state the scores for each quarter, Auckland Airport monitors
responses using a four quarter rolling average, as the annual sample size gives a statistically
significant result (by contrast the quarterly sample does not). Overall, the surveys have a
margin of error, therefore, as general principle, year on year changes in the scores of less
than 5% are deemed statistically insignificant.
Auckland Airport has also chosen 28 airports with comparable features from the ASQ survey
programme as a panel and uses the average score of this panel to benchmark our
performance. Most of these 28 peer airports are key destinations from Auckland and are
subject to capital disciplines and of a similar size of 10-25 million passengers.
Each quarter Auckland Airport undertakes a detailed review of the survey scores. The results
are fed into business activities and process improvement initiatives.
We acknowledge that our facilities have come under pressure more recently, and there have
been some challenges at times in providing the level of passenger experience that we strive
to deliver. However, these ASQ surveys provide insights on the areas that Auckland Airport
can control and the experiences of a statistically significant sample of customers.

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Auckland Airport Disclosures FY17 30 June 2017

14.2 Domestic terminal
In the year ended June 2017, our domestic passenger volumes rose by 9% from the previous
year, to 8.6 million. Despite the sizeable passenger growth, the average score of all regulated
factors of 4.1 was the highest score achieved in the last four years.
As shown in the chart below, in the 2017 financial year, the score on almost all regulated
factors improved and outperformed the previous 3-year average. The only exception was
”Waiting time in check in queue”, which fell slightly by 0.01 point on last year and 0.09 on
previous 3-year average. This factor was likely impacted by the rapid growth of passenger
volume.

In addition to the overall improvement on the previous year, the scores of six regulated factors
(ease of flight connections, flight information screens, walking distance in the terminal,
baggage trolleys availability, staff services and terminal cleanliness) reached a four-year high.
The strength of these scores demonstrates Auckland Airport’s commitment to improving the
customer experience, whilst at the same time managing an intensive period of construction to
cater for future growth.
In addition to the ASQ surveys, Auckland Airport also monitors customer experience using
customer feedback kiosks. Four kiosks were installed across the domestic terminal in the
2017 financial year. Passengers are now able to use the devices to rate their experience in
real time and select the reasons for dissatisfaction if they rate a service poorly. The results
are fed back in a timely manner, allowing any issues to be remedied as quickly as possible.
Across the international and domestic terminals, the customer feedback kiosks are collecting
over 150,000 individual responses per quarter.

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Auckland Airport Disclosures FY17 30 June 2017

The graph below compares Auckland Airport’s performance in the domestic terminal to that of
our 28-airport panel peer group. The graph shows that Auckland Airport matched or
outperformed the panel on almost all factors.



14.3 International terminal
In the 2017 financial year, our international passenger numbers increased by 11% from the
previous year, to 10.4 million. As in the domestic terminal, despite the growth in passenger
numbers, customer satisfaction in the international terminal remained high. The average
score of the 15 regulated factors increased to 4.2, the highest average score achieved in last
four years.
Of the 15 regulated factors, 12 outperformed the previous year. Scores of six factors (staff
services, gate comfort, terminal cleanliness, inspection time of ID, security screening and
airport safety) reached a 4-year high. Scores on way finding and washroom availability
dropped slightly, likely due to the construction work currently underway in the terminal.

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Auckland Airport Disclosures FY17 30 June 2017


As the chart below highlights, Auckland Airport matched or exceeded the scores of its
benchmark panel group in almost all areas.

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Auckland Airport Disclosures FY17 30 June 2017

Major projects and initiatives undertaken in the international terminal in the 2017 financial
year that supported an improved passenger experience including:
• installing 45 mobile international self-service check-in kiosks;
• reconfiguring the international check-in area to provide 13 more serviced counters;
• replacing 23 of 48-inch flight information display screens with new 75-inch screens on the
ground floor of the international terminal;
• upgrading the back-of-house international baggage handling system;
• adding new technology to monitor real-time traffic movements across the airport precinct
so the journey time information can be provided through the airport’s mobile and digital
channels;
• new toilet facilities in both international departure and arrival areas;
• expanding the concierge service for international passengers who prefer a personalised
and dedicated arrival facilitation service; and
• installing 19 real time customer feedback kiosks across the international terminal covering
dwell, main public washrooms, baggage hall and gate lounges.
Details of above projects and initiatives can be found in Schedule 15.

Note Schedule 15: Operational Improvement Processes
The 2017 financial year was another strong year of growth for Auckland Airport. We
continued to invest in operational improvement processes to provide quality services to our
customers, and to help accommodate the ongoing increases in passengers and aircraft.
With over 40 active aeronautical construction projects underway across the airport,
operational improvement processes are also important to help minimise the impact of
construction activities on passengers and our airport partners.
Auckland Airport has remained focused on working collaboratively and constructively with all
of our stakeholders to maintain and improve service quality for both passengers and airlines.
As we explain below, in FY17 Auckland Airport:
• Continued to encourage a collaborative approach to operational improvement. Through
participating in a number of forums such as the various Collaborative Operation Groups
(COG), we worked alongside stakeholders to improve operational performance across the
end-to-end journey. Our collaborative approach also continues to provide stakeholders
operating at the airport with an opportunity to input into short, medium and long term
planning with their quality preferences.
• Participated in a number of specific forums to facilitate operational improvement in
targeted areas, such as the weekly baggage system meeting and the monthly airbridge
meeting.

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Auckland Airport Disclosures FY17 30 June 2017

• Identified a number of operational projects to improve passenger flows, improve customer
satisfaction, manage peak volumes and enhance capacity through process
improvements.
• Continued to bed in the Airport Collaborative Decision Making (A-CDM) system, which
has now been in place at Auckland Airport for two years. A-CDM has enabled us to
deliver a single source of real-time data that stakeholders across the airport can both
access and use. This has facilitated a collaborative approach to the management of
activities on the airfield and in the terminals – helping us to accommodate growth in
passenger and aircraft numbers, and improving the passenger experience.
• Worked closely with airlines to provide operational and/or capital solutions to
accommodate airline requirements.
• Improved health and safety processes and outcomes.
15.1 Capacity enhancement, asset reliability and service quality
Taxiway and airfield upgrades and expansion
Prior to the 2016/17 summer peak season, we significantly expanded our airfield
infrastructure to better service international aircraft during our busiest months. These
initiatives are expected to decrease congestion on the airfield.
We built a new taxiway, Taxiway Echo, and we constructed a new international airfield stand
(stand 74), fully serviced with fuel and other utilities. Later in the 2017 financial year, we
started construction of a second, fully serviced international airfield stand (stand 75). We also
upgraded two remote international airfield stands so that each can accommodate an A380 or
B787, or two smaller aircraft. In total, our airfield pavement increased by 63,000m2, or the
equivalent of six rugby fields, through airfield upgrade works completed in FY17.
Fixed electrical ground power unit (FEGP) upgrade
During the year, Auckland Airport has continued to work with Air New Zealand to support the
introduction of the new 787-900 series of aircraft. The existing FEGPs were not able to
handle the increased electrical demands of the 787-900s, and Auckland Airport has sourced
new “AXA” units that can be used with these planes.
Two new AXA units were installed in the 2017 financial year, with a total of seven AXA units
installed on contact stands so far. The remaining units will be progressively upgraded, giving
Auckland Airport the flexibility to manage 787-900 aircraft as more are bought into service.
Runway planning and resilience
During the 2017 financial year, Auckland Airport has progressed the plan to convert Taxiway
Alpha into a flexible contingent runway (FCR). A feasibility study was completed in two
phases, the first focusing on the non-compliant strip width at the western end of the runway
and the second concentrating on the airfield infrastructure required to operate the flexible
contingent runway (this piece was led by Airways).
The study has indicated that a FCR can be feasibly constructed and operated at Auckland
Airport. The study also identified that the FCR could be delivered in stages to meet more

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immediate maintenance and redundancy requirements, whilst also creating a long-term
solution meeting regulatory requirements.
The feasibility study was issued to stakeholders in early October 2017 for review by
stakeholders. Prior to moving to a concept design stage, decisions will need to be made by
the business as to how soon the flexible contingent runway is required and what length is
required. Auckland Airport will continue to engage with airline customers throughout this
process.
Auckland Airport has also progressed the planning approvals needed to protect for the
operation of our planned second runway, which we currently estimate will be required in
around 2028.
Baggage system enhancements
Auckland Airport is committed to providing a robust and reliable baggage system and is
investing to improve both capacity and resilience. Auckland Airport has established a specific
“BHS 3000” project, which has delivered significant enhancements through the 2017 financial
year in conjunction with aligned capex projects. The improvements that have been delivered
include:
• Additional system redundancy
• System tuning and optimisation
• Improved check-in counter capacity
• Realignment of Transport Conveyor 1 and Transport Conveyor 4; and
• Maintenance replacement programme of new power curves and ploughs
In addition to the capital initiatives underway, Auckland Airport has worked with its baggage
system contractor, Glidepath, to monitor service levels and invest in continuous improvement
initiatives, including through enhancements to the Operations and Maintenance agreement.
Initiatives in the new contract include:
• Increasing support from 22/7 to 24/7
• Additional staffing levels of both trades teams and manual encode operators as requested
by airlines
• Enhanced software support as the automation of the system becomes more complex; and
• Enhanced KPI’s and monitoring
Auckland Airport has also employed a baggage handling systems specialist to provide further
support with managing these initiatives and the end-to-end process.
Improvements to bus operations
Bus operations are commonplace in airports across the world, facilitating the transfer of
passengers between lounges in the terminals and aircraft parked on remote airfield stands.

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At Auckland Airport, buses have played a critical role in servicing new demand while new
aircraft piers, gates and stands are developed. During the 2017 financial year, 9% of our
international flights were serviced using buses and 5% of our domestic flights were serviced
by buses.
We continue to consider that bussing is an efficient part of providing peak capacity, and
bussing will be an important part of Auckland Airport’s operational model over the medium-
term as we seek to cater for existing peak services and growth in peak periods at the same
time as we manage through an intensive construction period.
To improve the customer experience during bus operations, we have completed a tender and
selected the provider of a new airfield bus fleet. Our 10 new airfield buses will be supplied by
SkyBus and are scheduled to arrive in early 2018. They have been specifically designed for
the comfort of passengers being transferred between the terminals and aircraft parked on
remote airfield stands.
The new fleet will offer a significant uplift in service quality and provide a cost-effective, quality
service for passengers and airlines. All buses will provide real-time arrivals and departures
information, comfortable air conditioning, and Wi-Fi capability that connects seamlessly to Wi-
Fi provided in the terminals. The new bussing contract will also deliver service improvements
for the benefit of airlines and passengers, including a consistent method of loading and
unloading all buses, and increased monitoring, reporting and resolution of service
performance matters.
Auckland Airport has also purchased two Aviramp mobile jet bridges to further improve the
quality of service for bussed operations. Aviramps are covered ramps that provide an
airbridge-like experience for aircraft parked on remote stands, improving the passenger
experience, safety and the on-boarding and off-boarding process for airlines.
The mobile jet bridges protect passengers from bad weather and allow passengers to enter or
exit their aircraft without having to negotiate stairs. Aviramps also significantly improve the
travel experience for passengers with reduced mobility or using a wheelchair by eliminating
the need for a separate lift vehicle. Our two Aviramps will be delivered in November 2017
and if the trial is successful, we will purchase more.
Water facilities upgrade
Behind the scenes, our engineering teams have also done their part to ensure the resilience
and reliability of our utility facilities across the airport campus. In the 2017 financial year, we
upgraded pump station 8 (PS8) and the associated water storage reservoirs.
In the event of a main water supply interruption, PS8 holds adequate water for approximately
24 hours potable use plus a reserve for firefighting purposes. In recent years, the pump
station and reservoirs have also provided a secondary function of supplementing the existing
water main at times of peak demand. As the station and reservoirs were approaching their
end of life, a timely upgrade of the pumps, pipework and associated controls was necessary
for this essential element of the airport water network.
During FY17 works were also underway to develop a second water pipeline from Hunua in
order to improve resilience.

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15.2 Passenger Experience
Auckland Airport remains focused on our customers and ensuring they have safe and
enjoyable journeys. In addition to our investments in new infrastructure and capacity during
the 2017 financial year, we have continued to rollout other improvements as described below
to support a quality passenger experience.
Flight information screen upgrades
The overhead flight information monitors in the check-in area of the international terminal
provide an important element of passenger wayfinding within the terminal. In July 2016 we
replaced all above-counter screens with 55-inch, high-definition screens for greater visibility
from a distance.
In November 2016, we also replaced 23 flight information display screens with new large-
scale 75-inch screens on the ground floor of the international terminal. These screens are
expected to improve way-finding and to reduce congestion around smaller screens. The font
size has been increased by 63% on these new screens.
Improved public address (PA) announcements
An automated public address (PA) system (SimpleVox) was introduced in FY17 for customer
service and airline announcements. This system generates announcements in several
different languages. It is accessible from the communications position in the airport’s
operations centre for customer service announcements, as well as our gate lounges for airline
staff to make announcements.
This platform provides ease of access for our airline customers to make terminal wide
announcements from the gate, without having to call the communications operator.
Following the introduction of the initiative, call volumes to the communications operator
declined by 47%, allowing the operator to focus more on flight information management.
New security processing zone
At the end of June 2017, we opened the first stage of the international departures passenger
security processing zone. This represented the first significant change to the departure
experience for passengers as part of our staged upgrade of the international terminal.
We also advanced the remainder of the departures upgrade in FY17, and have made good
progress towards a full opening of the new emigration hall in FY18 – which will ultimately
combine customs, screening and a new recompose lobby.
New toilet facilities in international arrivals area
In the 2017 financial year, we upgraded and expanded the international arrival hall toilet
facilities to cater for passenger volumes over the medium-term. The upgraded toilet facilities
are now able to cope with a maximum of 3000 people per hour within the bag hall at peak
times, and were designed for efficient cleaning and maintenance.
New resources
We recruited extra employees, including more than 60 Passenger Experience Assistants to
help passengers at the airport during the busy December and January months, and additional

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Customer Service Agents to proactively assist passengers in need throughout the year. Post
the summer peak, we kept on a smaller pool of Passenger Experience Assistants to assist in
the terminal during a period of significant terminal development and construction activity.
Their role was to support passengers during peak periods, as well as helping passengers to
navigate their way through scaffolding and hoardings.
The services of our customer facing staff have been well received by our passengers over the
year. Our annual Airport Service Quality (ASQ) survey score for “courtesy and helpfulness of
airport staff” continued to improve and reached a four year high in the 2017 financial year.
Details of ASQ survey and Auckland Airport’s scores can be found in Schedule 14.
Improvements to the land transport network
We recognise the importance of reliable access to and from Auckland Airport, and have
continued to improve our transport network over the 2017 financial year.
We fast-tracked a number of planned roading and transport upgrades on our own network,
including:
• Upgrades to the Puhinui Road roundabout to help improve the eastern access to the
airport from State Highway 20B/Puhinui Road
• More car parks in our Park & Ride facility, mostly for use by staff working at the
international terminal to reduce staff traffic from the inner airport roads
• A new Drop & Ride service at our Park & Ride facility, which helps reduce traffic on the
inner airport roads and in the drop-off/pick-up zones at the terminals, and is a quick and
easy way to drop-off friends and family
• A new waiting zone for domestic parking, to help traffic flow in the domestic terminal’s
drop-off/pick-up zone. The Wait Zone provides free parking for 30 minutes just two
minutes away from the terminal, and follows the very successful introduction of The Wait
Zone at the international terminal in December 2015
• Upgrades to the traffic light phasing and lane configurations at the airport’s George Bolt
Memorial Drive and Tom Pearce Drive intersection to improve traffic flows
• Changes to the lane configurations at the airport’s George Bolt Memorial Drive and
Laurence Stevens Drive roundabout to improve traffic flows
• New traffic management plans for use when the airport roading network is particularly
busy
We continued to advocate throughout the 2017 financial year for additional transport network
improvements, in particular an upgrade to State Highway 20B/Puhinui Road and improved
public transport services. We are working closely with the New Zealand Transport Agency
and Auckland Transport to advance both short and longer-term roading and public transport
solutions for South Auckland and the airport precinct, including a rail service.

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Wi-Fi improvements
Auckland Airport has continued to invest in Wi-Fi as both an operations platform and a key
customer experience tool. Initiatives in the last few years include:
• Complete replacement of the Wi-Fi operating system in FY17. This investment enhanced
the flexibility of the system, upgraded security and provided more customer options.
• At the time of the operating system replacement, the data pipelines were upgraded to
significantly enhance security, improve speed and capacity and provide sufficient
headroom for future growth.
• In FY17, the free time allocation to customers was doubled from 45 minutes to 90 minutes
for those who took the option of joining Strata Club – a free mobile-based programme
designed to recognise travel choices with personalised service and benefits. Additional
(and improved) speed and time options were provided for customers who wished to
purchase enhanced packages.
• In FY18, a full audit was undertaken in the terminals to test Wi-Fi coverage and
performance. Where coverage or speed was compromised new “wireless access points”
or tuning was undertaken to enhance performance.
15.3 Improvement initiatives driving efficiency and innovation
Mobile self-service check-in kiosks
We have invested in 45 mobile and fully-customisable check-in kiosks in the international
terminal. The introduction of these kiosks has enabled more efficient and dynamic use of the
check-in area, as the kiosks can be placed anywhere and used quickly and easily by
passengers travelling with participating airlines to check in themselves, print boarding passes
and bag tags.
International check-in counter reconfiguration
We have also reconfigured Auckland Airport’s international terminal check-in hall by replacing
existing check-in counters with more compact counters. As a result, we have been able to
accommodate a further 13 service counters in Zones B, C, and D. The added check-in
capacity has increased our hourly passenger throughput capacity by 20%, reducing queuing
and congestion within the international check-in hall.
Smartgate Plus expansion at international arrivals
In March 2017, 15 next generation technology SmartGate Plus gates were installed into the
arrivals immigration processing area. These new single step gates replaced older
technology, which had a two-step kiosk and gate process, decreasing transaction time and
increasing total throughput capacity through SmartGate for eligible passport holders.
Immigration processing times remained consistent with the prior year, while arrival passenger
growth increased by 10% over the same period.

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Improved international transit security screening
During the 2017 financial year, Auckland Airport worked closely with Aviation Security to
improve passenger processing times by installing a seventh security screening machine in the
international departure area and by improving the international transit screening facility.
The Aviation Security screening lanes in the international transit facility were reconfigured and
extended in December 2016. This project delivered increased throughput capacity and a
better experience for our international transfer customers, including providing more space to
prepare for the security screening process.
The new reconfiguration and layout made it possible for us to measure the processing time
for transit passengers, which was not previously recorded. Over the summer peak period
(December 2016 – March 2017), an average processing time of 11 minutes was achieved for
international transit passengers using the reconfigured facility – the time was measured from
the disembarkation gates to the moment the passengers completed the transit security
screening process.
Improved biosecurity experience
There were a number of biosecurity challenges in FY17, including the introduction of direct
services from new destinations, and new biosecurity risks (such as myrtle rust). To help
respond to these challenges and to improve the international arrival experience, in December
2016 the Ministry for Primary Industries (MPI) introduced an additional baggage X-ray
machine, a 2
nd
detector dog team and an enlarged biosecurity area layout with a new
biosecurity lane called the Green Lane. Auckland Airport worked with MPI to understand their
requirements and to project manage the implementation of these initiatives.
The Green Lane, funded and constructed by Auckland Airport, is for use by New Zealand and
Australian passport holders who arrive in the country and do not have any food or other
biosecurity risk items to declare. This reduces congestion by allowing New Zealand and
Australian travellers with nothing to declare to go straight to risk assessment via their own
queue line, rather than being held up waiting for passengers with declared goods to be
checked.
Development of operational traffic management plans
During December 2016 a collaborative partnership was established between Auckland
Transport Operations Centre (“ATOC”) and Auckland Airport’s Operations Centre. The
partnership aimed to improve the flow of traffic into and around the airport precinct, and
resulted in the creation of:
• A joint daily operating model
• Sharing of joint business intelligence with respect to road usage and passenger and
airport worker peak movements
• The deployment of Airport personnel to the ATOC at high risk times
• Direct liaison with senior traffic engineers to optimise traffic flows on the airport precinct
• Joint training initiatives

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Auckland Airport Disclosures FY17 30 June 2017

This led to the formal signing of a Standard Operating Procedure (SOP) between both
organisations in early 2017. This collaborative approach has built shared knowledge,
increased the quality of communications, and supported faster and more efficient resolutions
of transport issues – minimising the impact for passengers and airport stakeholders.
Trial of customer service centre
Over FY17, there has been a 30% growth in the volume of customer calls received by the
operations centre, as well as increases in our other customer contact channels such as social
media and email. We have taken a number of steps to improve the management and
resolution of these customer queries in FY17. We trialled a dedicated customer service
centre with additional resource, which resulted in a 15% improvement in our responsiveness
(measured by the percentage of calls answered in under 20 seconds). Going forward, we are
planning to consolidate all customer contact channels (phone, email, and social media) and
utilise new technology to improve our responsiveness to consumer issues.
Auckland Airport has significantly enhanced its existing Customer relationship management
(CRM) system over the past twelve months and will continue to do so in the upcoming years
as it is a key platform to manage the customer experience. These enhancements include:
• Creation of a customer profile so that key customer information is collected in just one
place.
• Creation of “case management” – thi s provides end-to-end tracking and a record of
customer complaints, questions and comments in to Auckland Airport.
• The central repository of customer information for all of our digital and customer
experience initiatives.
Collaborative Operations Group (COG)
Auckland Airport’s operations team has continued to work collaboratively with our airport
stakeholders through our Collaborative Operations Group (“COG”) structure, and a number of
process improvement projects have been undertaken by COG in FY17. For example:
• Arrivals baggage delivery times improved by approximately 13% for wide body aircraft
(reduction in average delivery time of 4 minutes and 48 seconds) and 6% on narrow body
aircraft (reduction in average delivery time of 1 minute and 36 seconds) compared to the
delivery times prior to the improvement project completion. Some of the improvement
initiatives included additional communication channels, presentation of first bag and last
bag delivery times to passengers, and installation of FIDS for the transfer bag area. Daily
reporting of baggage delivery performance to ground handler management has been
established, and detailed analysis on baggage delivery is now presented at both Senior
and CEO-level COG forums.
• Domestic screening processing times reduced by an average of 2 minutes per passenger
as a result of COG improvement initiatives.
• Initiatives were undertaken to improve the handling of oversized and fragile baggage,
which improved throughput in comparison to 2016. These initiatives included an

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increase in footprint and capacity for the relevant storage space, and an improved drop-
off location to increase convenience and accessibility for passengers.
In addition, two new COG key performance indicators have been agreed at CEO level. These
are:
• A target to process 80% of transit passengers in less than 15 minutes per passenger.
• A target of 90% of COG partners attending daily COG meetings.
Auckland Airport has also lead summer peak planning under Project Capricorn. Examples of
initiatives delivered by Project Capricorn include the new slim-line check-in counters,
completion of the MPI Green Lane and improvements to the International-to-International
Transit Screening Area. The benefits of these projects are explained elsewhere in this
schedule.
Improved emergency management systems
A web based incident management system (Noggin) was implemented in the 2017 financial
year to improve the visibility of incident related information during the activation of an
emergency operation centre (EOC).
Noggin provides duty managers with remote access to view event details of an incident and
delivers improved communications to stakeholders during an incident, by sending SMS
messages detailing the severity and nature of the incident. Incident logs can be accessed in
real time from a web interface and mobile application.
Customer experience measure system
In addition to quarterly ASQ surveys, Auckland Airport also started implementing a customer
experience measure system in the 2017 financial year to capture real time customer
feedback.
In the first quarter of FY17, 23 built-in or freestanding touchscreen kiosks were installed at
key touch points in the customer journey, including in washrooms, bag claim arrivals and gate
lounge areas. Passengers are able to use the devices to rate their experience on the relevant
service, i.e. rate their washroom experience on the kiosk located in the washroom and select
the reasons for dissatisfaction if they rate a service poorly.
The real time customer experience measurement system has been well received since
installation. In the 2nd quarter of 2017, we received more than 150,000 individual satisfaction
ratings via the 23 kiosks in the international and domestic terminals - more than 107,000 from
bathrooms alone (our priority zones for measuring satisfaction).
Real time feedback on customer experience enables Auckland Airport to monitor the service
level in a timely manner and to respond quickly on issues that may affect the customer
journey. Dashboards and in-depth reporting mean that it is possible to analyse results using
various lenses, including a particular time of the day, day of the week, or by season. The
system has capabilities (including free-text feedback) that are the first of its kind in Asia
Pacific and Southern Hemisphere.

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New technology to monitor real-time traffic movements
In the 2017 financial year, Auckland Airport started using Bliptrack technology in its terminals
as a passenger flow management tool to help measure passenger journey times and respond
to areas where there are delays in that journey.
The system is used to provide indicative queue wait times at departures and through the
airport’s mobile and digital channels so passengers can make a decision around the best time
to go through security.
Bliptrack is also in use on Auckland Airport’s road network to help us better understand traffic
flow and help with reporting on traffic events.
15.4 Health and Safety
Corporate health and safety
The health and safety of employees, contractors, customers and visitors remained a top
priority for Auckland Airport. We continued to grow the team responsible for supporting our
employees, with 23 people now trained to investigate health and safety incidents across the
company, and significantly enhanced our permit to work system for managing higher-risk and
non-routine physical works.
In the 12 months to 30 June 2017, staff health and safety engagement increased to 68%, an
indicator of an increasingly proactive safety culture. Underlying this result, the 2017 financial
year saw a 27% increase in the reporting of safety observations, hazards and near misses, a
22% decrease in the employee recordable injury frequency rate and an 81% reduction in the
contractor lost time injury frequency rate.
Escalator lighting improvements
Low power LED lights were installed to illuminate underneath the escalator steps on eight
escalators with high levels of public use. This newer technology is well utilised in malls and
helps the public identify the edge of the escalator steps, minimising the number of health and
safety incidents on escalators caused by people tripping and falling.
Audible sounders at travellator ends
Audible sounders have been installed on seven travellators to remind the public when they
approach the end of the travellators. Along with visual warning signs that are currently
installed at the travellators, it is envisaged that the audio sounders will help minimise trip and
fall risks.
Domestic hold bag screening
In April 2016, the government mandated Hold Baggage Screening (HBS) for all baggage on
domestic jet services operating from the five main airports in New Zealand.
To comply with the new requirement, Auckland Airport required the two separate baggage
systems in the domestic terminal (the eastern Air NZ owned system and western Auckland
Airport owned system) to be modified to allow for the installation of new x-ray machines. The
new screening system was completed in December 2016.