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AIA – FY23 Annual Results

Full Year Results23 August 2023AIAIndustrials

Market release | 24 August 2023
Resilience uplift: Auckland Airport announces its

results for FY23 amid historic upgrade of the

airport precinct


Auckland Airport today announced its financial results for the 12 months to 30 June 2023, including

its first dividend and full underlying profit in three years.

Auckland Airport Chair Patrick Strange said: “It’s been a year marked by the strong return of

international travel, with new airlines and routes, getting underway with the most significant upgrade

of Auckland Airport in history, and making progress on sustainability initiatives that will have a

meaningful impact across the aviation precinct.”

Key performance data for the 12 months to 30 June 2023:


• Total number of passengers increased to 15.9 million, up 183%

• Domestic passenger numbers increased 90% to 8.1 million, and international passenger numbers

(including transits) increased 480% to 7.8 million

• Revenue was up 108% to $625.9 million

• Operating EBITDAFI was up 175% to $397.1 million

• Reported profit after tax was down 77% to $43.2 million

• Earnings per share was down 78% to 2.9 cents

• Net underlying profit after tax of $148.1 million

• Net underlying profit per share of 10.1 cents

• 4.0 cents per share dividend will be paid

1


Auckland Airport now has more than 400,000sqm of aeronautical-focused infrastructure in

development across major airfield, transport and terminal projects.

“This major upgrade of infrastructure is essential. Airports play a critical role in our country’s social

and economic wellbeing, developing long-life infrastructure assets that support travel and trade. It’s


1

Reflecting the earnings period of 1 January to 30 June 2023 following the removal of covenant-related

restrictions



vital we continue to invest so we don’t create a drag on the economy and constrain Auckland and

New Zealand’s future growth.

“As New Zealand’s main gateway, our infrastructure programme reflects this responsibility. It is

prudent investment which will deliver critical assets that will have decades of ongoing use and create

the uplift in experience travellers are asking for.

“Airlines have asked us to pause investment. We appreciate their concern about cost, as infrastructure

is a significant investment. We are always open to further feedback about how to reduce costs while

still delivering a resilient, long-term solution.

“However, we remain committed to the current programme of work we have underway to pave the

way for a new domestic terminal. Delaying infrastructure is not in New Zealand’s best interests – we

know where that road leads. For the airport, it would keep domestic capacity constrained, allow the

customer experience to deteriorate, place upward pressure on airfares and reduce the airport’s

resilience to unacceptable levels.

“Travellers have told us they want a better domestic experience, and we must get on with it,” Mr

Strange said.

Chief Executive Carrie Hurihanganui said: “The thread running through every aspect of Auckland

Airport’s aviation precinct is connection. Whether that’s reuniting family and friends, welcoming

visitors to Aotearoa New Zealand, or connecting businesses and workers to new opportunities,

Auckland Airport plays a key role.

“Travellers and businesses can now choose from 25 airlines to 40 international destinations at

Auckland Airport as airlines have added new routes or grown the frequency of their services. At a

time when demand for travel has outstripped supply, each of these connections has a very real and

tangible impact, providing greater choice for travellers, more competition on popular routes, and better

freight connections for New Zealand businesses.”

Overall, there were 15.9 million domestic and international passengers at Auckland Airport in the 2023

financial year, up 183% on the 2022 financial year. Domestic passenger numbers were up 90% to 8.1

million while international passenger numbers (including transits) rose 480% to 7.8 million.

“Auckland Airport serves to connect travellers and businesses, and I want to acknowledge that the

rapid return of aviation has not always been a smooth experience for customers. We’ve experienced

storm events unlike anything before, causing the closure of the international terminal, and global

aviation staffing shortages have created ongoing issues across the aviation system, including

mishandled bags, longer queues and delays in the arrivals process.

“For Auckland Airport, since the beginning of the year we have been taking a lead role in working to

collectively solve issues as an ecosystem of border agencies, airlines, ground handlers and other



auxiliary services. There will be some quick wins and some aspects that will take longer to solve, but

rest assured we will continue to work on this until we get it right.

“We have appreciated the patience and understanding of travellers and our airport partners, and I am

also thankful to the Auckland Airport team for their incredible effort in supporting the recovery of the

business.”

Alongside the return of travel, Auckland Airport has ramped up its infrastructure development

programme.

“Attracting and retaining airline networks, which support tourism and trade, requires high quality,

resilient and reliable airport infrastructure, with sufficient airfield and terminal capacity,” Ms

Hurihanganui said.

“Auckland Airport needs careful, considered investment to meet these needs, not only today but in

anticipation of the future.

“We have three anchor projects underway across terminals, airfield and transport: enabling works for

a new domestic terminal to be integrated into the international terminal; a 250,000-square-metre

airfield expansion; and the development of a world-class transport centre.

“With our 57-year-old domestic terminal now reaching capacity, development of a new domestic

terminal is essential. Without continued investment, the airport system will degrade and stagnate.

When it opens in 2028/29, the new domestic terminal will deliver significant customer improvements

including integrated self-service check-in, shorter queuing times with 44 per cent more capacity for

passenger processing per hour, and a five-minute indoor walk between domestic and international

flights.

“It will not only transform the experience for travellers; it will also build necessary resilience into our

airfield with a 26 per cent uplift in domestic seat capacity thanks to additional gates catering for larger

jet aircraft.

“The decision to move ahead with the new $2.2 billion integrated terminal was made after extensive

consultation, including producing over 21 concept designs for a new domestic terminal since 2012.

“Airlines are asking to stay longer in the domestic terminal – well beyond 2030 – and for alternative,

additional designs to be considered. After a decade of careful analysis, we are confident our

infrastructure plans are in the best interests of all airport users, but we will always include refinements

proposed by our airline partners where they are viable and make sense,” said Ms Hurihanganui.

Rebuilding connections

Auckland Airport has experienced a stronger than anticipated rebound in domestic and international

aviation markets over the 2023 financial year.



Overall, by year’s end international seat capacity had recovered to 90% of pre-pandemic levels, and

domestic recovered to 89%. The return of passenger flights also restored international freight capacity

to 95% of pre-pandemic level as at 30 June 2023.

“We still have some way to go to achieving full recovery, but it all amounts to a fantastic turnaround

for an industry that was in dire straits two years ago – bringing relief and optimism to those of us who

work in aviation.

“Strength in North American services has been leading the charge. Air New Zealand now flies into

seven North American cities including its flagship New York service, joined by Qantas on the same

route from June 2023, bringing greater choice and more competitive pricing to travellers. Hawaiian

Airlines, Air Canada, United Airlines and American Airlines reconnecting into Auckland will also be

joined by newcomer Delta Air Lines over the summer from October this year.

“It will be a busy summer with current projections showing capacity between Auckland and North

America set to exceed 2019 levels, with a forecast 29% increase over November 2023 to March 2024

compared to the same five-month period prior to COVID-19.

There has been a promising recovery in capacity to and from China as well, after a slower return due

to a more protracted COVID-19 response. Five airlines now fly four routes, including daily services to

some of the main centres, with capacity between China and New Zealand recovered to 78% of 2019

levels at 30 June 2023, and forecast to reach 93% of pre-pandemic levels by September.

“There was plenty of activity on the trans-Tasman route, by far our biggest international market, which

is back to 96 per cent of pre-pandemic capacity. Frequent flyers Air New Zealand, Qantas and Jetstar

have been joined by AirAsia X flying between Auckland and Sydney, with Batik Air starting on the

Perth route tomorrow.”

Building a thriving aviation precinct

Beyond the airfield and terminals, Auckland Airport continued to progress a range of key

developments across transport, retail and commercial property during the 2023 financial year.

“Later this year Te Arikinui Pullman Hotel (a joint venture between Auckland Airport and Tainui Group

Holdings) will open, followed by the first stages of the Transport Hub opening up for drop-offs and

pick-ups in the new year. During the 2024 calendar year we’ll be providing new parking options with

the opening of Park & Ride South; and offering a new shopping experience to visitors with the opening

of Mānawa Bay premium outlet shopping destination, expected in late 2024.

“These projects will bring further vibrancy and amenity to our aviation precinct, whether it’s creating

smoother transport connections or great visitor experiences. As workforces grow it also becomes part

of what attracts people to jobs at the airport – whether it’s easy access to local shopping or improved

options for getting to and from work.”



Within the terminal, retail operations are back in full swing and the airport team is fielding strong

interest in future leasing with a total of 115 outlets now operating. After hibernating during the

pandemic, most have now returned to normal business operations with sites fully open.

“This year we’ve made the move to a single duty-free operator, with Lagardère AWPL-owned Aelia

Duty Free agreeing to a short-term extension of its contract until mid-2025. Not only is a single

operator model in line with most overseas airports, it also creates the opportunity for the introduction

of additional retail lines and improved in-store experiences. In what was a seamless transition, around

90 per cent of existing duty-free employees were able to transfer to Aelia Duty Free.”

One of the fastest growing commercial areas is The Landing business park located on the northern

end of Auckland Airport. In 2023, developments for Kerry Logistics and Healthcare Logistics (part of

the EBOS Group) were completed, while the construction of two additional facilities remains on

track for completion in the 2024 financial year. Auckland Airport has also been appointed to develop

new standalone facilities within The Landing for companies which include IKEA, DHL, and Reece

Group, all of which target a 5-star Green sustainability rating and will begin construction during the

2024 financial year.

The airport’s rent roll increased by 15% off the back of sustained customer demand for its high-

quality, well-located real estate products. Auckland Airport’s portfolio ended the year having a total

value of $2.9 billion, and occupancy levels remaining at 99% and a weighted average lease term

(WALT) of 8.6 years – this is one of the highest WALTs relative to the NZ listed property sector.

Sustainability, people and community

As the upgrade of Auckland Airport continues at pace, Ms Hurihanganui said the team remained

focused on its sustainability targets, with investments to progress climate change goals and create a

more sustainable airport.

“We are playing our part, not just in reducing carbon emissions and waste from our own operations

but also assisting the wider aviation system’s sustainability goals. It’s our investment in infrastructure

that will support the deployment of new aircraft technology – whether that’s larger, more efficient

domestic aircraft or future low-carbon aircraft and fuel types. We already have a range of initiatives in

play to reduce fuel burn from non-flying activities, from predictive technology to manage push-back

timing to ground power units available to plug in to at the gate.

“Significant progress has been made in reducing waste and carbon emissions from our own

operations also. We are systematically switching off natural gas in favour of electricity in the terminals,

and new developments such as the Transport Hub and Mānawa Bay will be electric only, with plans

to draw a substantial portion of their power use from giant rooftop solar arrays.”

Alongside initiatives to benefit the environment, Ms Hurihanganui said Auckland Airport is also



focused on bringing improvements to employees, as its workforce scales up to support a once-in-a-

generation upgrade of the airport precinct. In the 2023 financial year, the airport’s team grew 24% to

579 people, with additional growth in expected infrastructure and operations-based roles during the

2024 financial year.

“It’s an exciting time to be working at Auckland Airport and we want to offer people support that makes

a meaningful difference to their lives, which is why we’ve overhauled our parental leave policy,” Ms

Hurihanganui said.

The airport’s new parental leave policy includes primary carer top-up payments on the Government-

funded rate to 100% of salary for 18 weeks; six weeks paid leave for partners (Auckland Airport pays

the two weeks which are statutorily unpaid, plus an additional four weeks); continued employer

KiwiSaver contributions of three per cent to primary carers; and on the return to work, five days of

family leave for primary carers to use for any reason connected with their new child.

In the 2023 financial year, Auckland Airport continued its long-standing support of community

organisations in South Auckland. This included supporting the Ara Education Charitable Trust, which

creates pathways into work for school leavers not going directly into tertiary education or training.

Students are currently renovating houses on site at Auckland Airport to gain valuable construction

work experience, while six students were able to take part in work experience at the Transport Hub

during the financial year, opening them up to new career opportunities.

Pricing

After freezing prices for a year to support airlines to rebuild, Auckland Airport has now reset airline

charges for Price Setting Event Four (PSE4) for the period of 2023 to 2027 financial years, with the

new charges introduced on 1 July 2023.

“We consulted extensively with airlines in setting these new charges, which are the payments airlines

make to operate at the airport and fund necessary infrastructure investment,” said Ms Hurihanganui.

“Our domestic charges, which have risen from a low base of $6.75 per passenger, will increase by

$3.50 to $10.25 over the 2024 financial year. By 2027, they will be at a similar level to current charges

at Wellington and Christchurch airports.”

The new aeronautical charges are now being independently reviewed by New Zealand’s competition

regulator, the Commerce Commission.

“We welcome this scrutiny as it is an important step in ensuring airports work to benefit the traveller

and make long-term decisions that are in the best interests of New Zealand’s economy. We will await

the Commission’s review of our PSE4 pricing decision, which is expected in May 2024, before

commenting further.”



Outlook

As Auckland Airport looks ahead to the 2024 financial year, Ms Hurihanganui said the airport

continued to see positive signs in the market with increased connectivity supporting the ongoing

recovery in aviation.

To reflect this, Auckland Airport is providing guidance of underlying profit after tax (excluding any fair

value changes and other one-off items) of between $260 million and $280 million. In addition, with

the significant investment across the airport precinct, Auckland Airport is also providing guidance on

capital expenditure of between $1 billion and $1.4 billion in the year.

As always, this guidance is subject to any material adverse events, significant one-off expenses, non-

cash fair value changes to property and deterioration as a result of global market conditions, or other

unforeseeable circumstances.

ENDS

For further information, please contact:

Investors:

Stewart Reynolds

Head of Strategy, Planning and Performance

+64 27 511 9632

stewart.reynolds@aucklandairport.co.nz

Media:

Libby Middlebrook

Head of Communications and External Relations

+64 21 989 908

Libby.middlebrook@aucklandairport.co.nz

---

2023 Annual Report
AKL

Building a

Better Future

Working for
New Zealand

We serve as Aotearoa New Zealand’s

gateway, supporting thousands of

businesses and millions of travellers to

connect with each other and the world.

As custodians, our role is to plan ahead,

supporting airlines, travellers, partners,

tenants and the community through

building the services and infrastructure

they need – sustainably.

Investment in New Zealand’s future,

ensuring our national gateway is efficient

and resilient for years to come.

Investment to ensure our connection with

the world, unlocking tourism, trade and our

country’s long-term prosperity.

Investment that reimagines how we think

about and engage with customers,

providing experiences and products and

services that travellers and visitors value

and that Aucklanders and New Zealanders

are proud of.

Annual Report 2023 1

A thriving
aviation precinct

To achieve our aspirations, we are building

a vibrant and diverse aviation precinct –

a place of travel, connection, employment,

having fun and doing business.

A thriving aviation community – where

people want to work and visit, not have

to work and visit. A place that’s far more

than just en route. A destination in itself.

Strong foundations are essential for any

place, guiding and shaping our actions

today and in the years ahead.

The foundations of our place are providing

a resilient and enduring gateway, enabling

thriving enterprise, empowered community

and seamless connectivity.

2 Annual Report 2023

Annual Report 2023 3

4 Annual Report 2023

Welcome to our 2023 Annual
Report – AKL Building a

Better Future.

Since our opening 57 years ago,

Auckland Airport has held a central

place in the life of Auckland and

New Zealand.

We account for 84% of New Zealand’s

air exports by value, handle 90% of

the country’s airfreight, and support

employment for an estimated 20,000

people. We’ve been able to support

strong growth in aviation markets on a

platform of aeronautical infrastructure

built with foresight in years gone by.

The airport is a place of significant

moments, too. Airports carry big

memories and with 75% of all international

travellers landing here, for most people

Auckland Airport is also where

New Zealand shows its face to the

world for the first time.

There is much to be proud about in

the airport’s history. But we also need

to look to the future, ensuring Auckland

Airport remains strong and resilient

for future generations. We are now

firmly underway with an infrastructure

programme to revitalise Auckland Airport.

This report tells a story of Auckland

Airport today and the journey that lies

ahead of us – how we will create value,

our business model, the issues that

matter most to our business, the

community and stakeholders, and the

new strategy that will guide and drive

us forward: Building a Better Future.

We welcome your feedback on this report.

Please send any comments or suggestions

to investors@aucklandairport.co.nz

About this report

Annual Report 2023 5

6 Annual Report 2023

Our Performance
Annual Report 2023 7

2023 Key Numbers
Our performance in the 12 months to 30 June 2023

1. Net capital expenditure additions after $3.8 million of write-offs and impairments.

2. Mixture of cash donations and contributions in kind.

3. Direct reports to the leadership team with substantive roles.

4. Staff members with at least one direct report.

Revenue

$

625.9m

 108%

EBITDAFI

$

3 97.1m

 175%

Reported profit after tax

$

43.2m

77%

Underlying profit

$

14 8 .1m

 1,377%

Net capex additions

1

$

6 47.1m

 156%

Dividend per share

4.0c


Underlying earnings

per share

10 .1c


Five-year average annual

shareholder return

5.4

%



Passengers

Domestic

8 .1m

 90%

International

7. 2 m

 473%

International transits

0.6m

 580%

15.9m

8 Annual Report 2023

Health and safety
623

leader walks completed

11

critical risk workshops

completed

549

near misses reported

Community

$

384k

granted to community projects by the Auckland Airport

Community Trust to support learning, literacy and life skills

in South Auckland

$

400k

2


in support to Ara Education

Charitable Trust

$

20k

donation to Red Cross

Cyclone Appeal

Iwi

Worked alongside local

iwi to share information

and identify opportunities

for iwi involvement across

resource management

processes, future airport

operations and precinct

development, including

the design of key projects

Diversity and inclusion

Proportion of women

50

%


Auckland Airport Board

of Directors

41

%


Overall workforce

50

%

Leadership

team

46

%

Senior leaders

3


10

%

of people leaders

4


self-identify as Māori

or Pasifika

50

ethnicities across our

workforce

268,622m

3


potable water used (29% reduction from 2019 baseline)

2,392t

waste to landfill (3% reduction from

2019 baseline)

4,291t CO

2

e

Scope 1 and Scope 2 emissions

(27% reduction from 2019 baseline)

Environment

Annual Report 2023 9

In New Zealand and around
the world, travellers are

actively returning to the

skies. Once again people are

travelling for pleasure and

business, scheduling long-

postponed visits to friends

and family, taking both

short-stay and extended

holidays, and generally

making up for lost time over

the period disrupted by the

pandemic.

We are past the initial waves of people

rushing to reconnect with family and

friends, and travel is almost back to

normal – recovering in a way that has

exceeded our own and many of our

airline partners’ growth forecasts.

By our financial year’s end (30 June

2023), total monthly passenger numbers

at Auckland Airport were running at 88%

of the comparative month (June 2019),

prior to the pandemic.

It’s important to acknowledge that the

rapid return of aviation has not always

been a smooth experience for travellers

worldwide and at Auckland Airport it

has been no different.

Global staffing shortages have been

at the centre of this, creating all kinds

of havoc across the aviation system.

Travellers have had to cope with

mishandled bags, longer waiting times

in queues, construction work in the

arrivals hall, airline schedule changes and

generally a system struggling to maintain

smooth passenger flows. These issues

were felt more strongly in the first half

of the year and are now showing signs

of easing.

Alongside the return of travel, we’ve

experienced some of the most

extreme weather New Zealand has

ever seen. This caused the closure of

the international terminal in January

From the

Chair

10 Annual Report 2023

Nau mai & welcome
for 37 hours due to flooding after

Auckland’s record-breaking rainfall

event, when over 200 millimetres of

rain fell in a single day, on top of an

already wet month.

We have greatly appreciated the

ongoing understanding of travellers

and our partners, and we are thankful

to the team at Auckland Airport for

their sustained effort in supporting the

recovery of the business.

Financial results

The 2023 financial year has provided

a much stronger result compared with

the year prior which was still being

impacted by the last of the Auckland

community’s COVID-19 lockdowns and

border restrictions.

Revenues in the year to 30 June 2023

increased by 108% to $625.9 million.

There was also pleasing growth in

earnings before interest, expense,

taxation, depreciation, fair value

adjustments and investments in

associates (EBITDAFI) up 175% to

$397.1 million. Total reported profit after

tax decreased by 77% to $43.2 million

while underlying net profit after tax

was up by $159.7 million to a profit

of $148.1 million. This resulted in an

underlying profit per share of 10.1 cents

for the 2023 financial year.

It has been pleasing to see the strong

return of our aviation business. As

demand for air travel has surged globally,

airlines have continued to see the value of

investing in capacity at Auckland. During

the 2023 financial year we welcomed

back familiar airlines – along with new

routes and carriers – helping to restore

Auckland Airport to the first full year

underlying profit since 2020.

As was the case the year before, our

property investment business continued

to deliver strongly. The industrial property

market has remained positive unlike other

categories of property in a COVID-19-

recovering economy. The investment

property rent roll is now $147 million

(up 15% year-on-year) and the investment

portfolio is currently now valued at

$2.9 billion.

I would like to take this opportunity to

once again thank shareholders for your

continued support through several

testing years. As we gradually return

to ‘business as usual’, we appreciate

your long-term confidence in the value

the airport can create for New Zealand,

our communities and shareholders.

We are pleased to declare a final

dividend – our first since October 2019

– for the 2023 financial year of 4.0 cents

per share, reflecting the earnings period

of 1 January to 30 June 2023 following

the removal of covenant-related

restrictions. At 4.0 cents per share, the

dividend equates to a 73.5% payout

of underlying profit for the second half

of the year and reflects our updated

dividend policy to pay 70% to 90% of

underlying net profit after tax (excluding

unrealised gains and losses arising from

a revaluation of property or treasury

instruments and other one-off items).

Building a Better Future

Growing passenger volumes have

restored a welcome vibrancy to our

airport precinct. They also point to the

timeliness of our business strategy –

Building a Better Future.

This is our comprehensive strategy

to move us back on to the front foot

and guide our long-term investment

decisions.

Our infrastructure is stretched after a

period of sustained growth followed

by the hiatus created by the pandemic.

It’s vital that we invest in Auckland

Airport’s future now. Our national

gateway needs investment to ensure

it remains efficient and resilient for

future generations, and to support our

country’s future economic prosperity.

Building a Better Future (see infographic

pg 24-25) organises our effort and

investment to deliver success in five key

areas: a thriving enterprise, empowered

community, seamless connectivity,

enduring infrastructure and, above all,

future resilience.

It gives context and coordination

to the restart of our infrastructure

development programme, as we deliver

a historic transformation of the airport.

“It’s vital that we invest in

Auckland Airport’s future

now. Our national gateway

needs investment to ensure

it remains efficient and

resilient for future

generations, and to support

our country’s future

economic prosperity.”

Revenue

$

625.9m

 108%

Reported profit after tax

$

43.2m

77%

Annual Report 2023 11

This encompasses everything from a
new domestic terminal to be integrated

into the international terminal, to better

roads, a more resilient airfield, and

utilities such as fuel infrastructure.

Transport infrastructure such as the new

Transport Hub will complete the picture

for smoother, more efficient journeys to

and from the airport.

None of this would be possible without

the dedication of our management team,

passionately led by Chief Executive

Carrie Hurihanganui and supported

by our 579-strong workforce. I thank

the whole team, as well as my fellow

directors, for their energy and effort as

we support the organisation to manage

the challenging developments ahead.

Aeronautical pricing changes

On 8 June this year, following extensive

consultation with our airline partners,

we announced changes to airline

charges for the 2023 to 2027 financial

year period (a process known under

our enabling regulations as Pricing

Setting Event 4 or PSE4). The increased

charges took effect from 1 July 2023,

ending the year-long price freeze we had

in place to help airlines rebuild following

the pandemic.

We did not introduce these changes

lightly, particularly in the current

economic environment.

We need to ensure continued

investment in Auckland Airport’s

infrastructure so it is at an appropriate

standard, delivering sufficient capacity

and resiliency long term and an

improved customer experience. As

New Zealand’s key gateway airport,

we believe the infrastructure investment

choices we have made are in the best

long-term interests of travellers and the

wider New Zealand economy.

The decision to move ahead with the

Terminal Integration Programme was

made after extensive consultation,

analysis and careful consideration,

but ultimately without the support of

airlines. Although Air New Zealand and

the Board of Airline Representatives

(BARNZ) supported the pathway to

terminal integration in August 2021, their

position changed, largely due to the

increased cost of construction and

resulting price changes.

While airlines have asked us to pause

the building programme, they have not

been able to propose any viable long-

run alternatives. Airlines have also asked

us to continue operating jets from the

existing domestic terminal, however this

would result in jet operations remaining

in the terminal well beyond 2030 with

unacceptable impacts on the efficiency

of operations, the resiliency of the

airfield and result in further deterioration

of the customer experience.

We continue to engage with airlines and

remain open to adjusting our approach

to the infrastructure programme if

presented with new and viable options.

In setting our updated prices, the return

on capital targeted for PSE4 was set

consistent with the existing Commerce

Commission’s methodologies, updated

for the most recent input data.

The new aeronautical charges are now

being independently reviewed by the

Commission. We welcome this scrutiny

as it is an important step to ensure

10-year development road map (remains subject to change)

12 Annual Report 2023

“With burgeoning traveller
numbers, expanding

international routes,

accelerating infrastructure

development and a hugely

committed team, there is a

great deal to look forward

to at Auckland Airport.”

not sufficiently reflect the risks that

New Zealand airports face. It includes

ad hoc judgement calls that would make

the regulatory regime unpredictable and

would challenge business cases and

the funding of all New Zealand airports’

essential investment plans, potentially

leading to capacity constraints.

A constrained Auckland Airport

would not serve New Zealand well.

Underinvestment would lead to

constrained flights which would inevitably

drive up air fares steeply – just as we

have witnessed recently because of

airline capacity shortages caused by

COVID-19. Our submission – and others

– strongly encourages the Commission

to retain its existing approach that it

has insisted airports follow for the last

13 years.

Legislative update

Following many years of engagement

and submissions, in April this year

Parliament passed an important piece

of legislation: the new Civil Aviation Act

repeals and replacing the Civil Aviation

Act 1990 and the Airport Authorities Act

1966 with a single modern law to regulate

the aviation industry. We welcome the

new legislation and the more succinct

legal framework it provides.

Looking ahead

With burgeoning traveller numbers,

expanding international routes,

accelerating infrastructure development

and a hugely committed team, there is a

great deal to look forward to at Auckland

Airport. This includes continuing to

process sustainability initiatives that

will have a meaningful impact across

the aviation precinct as we upgrade

infrastructure. Operating New Zealand’s

largest airport and international gateway

while revitalising it from the ground up

will see new challenges, and our team

is focused on the tasks ahead.


Patrick Strange

Chair of the Board

that airports in New Zealand work to

benefit the traveller and make long-term

decisions that are in the best interests of

New Zealand’s economy. We will await

the Commission’s review of our pricing

decision, which is expected in May

2024, before commenting further on

PSE4 pricing.

We expect prices for the next pricing

period will need to increase further,

reflecting the significant amounts

of capital that will be invested to

complete delivery of the Terminal

Integration Programme. Post-pandemic

construction cost escalation has added

to the challenge, but we know that

our costs of delivery are aligned to

the cost of other recent examples of

terminal infrastructure globally. We know

continuing to invest remains the right

thing for the travelling public, the right

thing for New Zealand.

We have also responded to the

Commission’s initial cost of capital

Input Methodologies Review draft

decision announced in June. The draft

decision included a fundamentally

new approach for airports which does

Annual Report 2023 13

From the
CE

Kia ora koutou

katoa

Connecting New Zealanders

to each other and the world

is something we take

immense pride in.

So we’ve been delighted

to see Auckland Airport

humming again, experiencing

a stronger rebound in the

aviation market both

domestically and internationally

than anyone had expected.

Airports and airlines have

rebuilt their workforces, new

routes are coming on stream,

aircraft load factors are high

and we are looking ahead to

a busy summer peak.

We still have a way to go to full recovery,

but it all amounts to a fantastic

turnaround for an industry that was in

dire straits two years ago – bringing

relief, gratitude, energy and optimism

to those of us who work in aviation.

The return of airlines to the New Zealand

market tells the story.

In the 2023 financial year, we had 25

airlines flying to 40 destinations to and

from Auckland Airport. On both counts,

this is a near doubling from the lows of

12 airlines and 21 destinations during

the toughest days of the pandemic.

In June, international seat capacity

recovered to 90% compared with pre-

pandemic, and domestic recovered to

89%. The return of passenger flights

also restores international freight

capacity to 95% of pre-pandemic level.

Strength in our North American routes

is leading the charge. Air New Zealand

now flies into seven North American

cities including its flagship New York

service, joined by Qantas on the same

route from June 2023, bringing greater

choice and more competitive pricing to

travellers. Hawaiian Airlines, Air Canada,

United Airlines and American Airlines

reconnecting into Auckland will also

be joined by Delta Air Lines from late

October this year.

14 Annual Report 2023

Kia ora koutou katoa
These are all high-quality airlines with

extensive domestic and international

networks. This sees Auckland Airport

now offering more non-stop connections

to the United States and Canada than

any airport in Australia. This is great

news for Kiwi travellers but also for

those travellers from our second largest

visitor market (behind Australia) wanting

to take a holiday in New Zealand.

There has been a promising recovery

in routes to and from China, a key trade

and tourist market for New Zealand,

after a slower return due to a more

protracted COVID-19 response, with

five airlines now operating four routes,

including daily services to some of the

main centres. Overall, capacity between

China and New Zealand had recovered

to 78% of 2019 levels as at 30 June

2023, and is forecast to reach 93% of

pre-pandemic levels by September.

Investing for the future

Alongside the return of airlines,

we are investing in the airport’s long-

term future.

As the international gateway to

New Zealand, we need to upgrade,

modernise and build in greater capacity

and resilience, so we can enable

New Zealand’s economic and social

prosperity rather than constrain it.

We want to make Kiwis proud, offering

sustainable and seamless customer

experiences alongside the best in

the world.

We have a new strategy – Building a

Better Future – and a clear ambition

to build a vibrant and diverse aviation

precinct – a destination that not only

serves as New Zealand’s busiest airport,

but also a place of entertainment,

business and employment.

In line with this, our biggest project

is a new combined domestic and

international terminal. It’s about time

– our 57-year-old domestic terminal is

nearing capacity – and this will be our

largest redevelopment since the airport

opened in 1966. Not only is it incredibly

necessary, it will also transform the

customer experience, making their

journeys easier and faster. Airlines also

have much to gain in terms of capacity

growth, sustainability outcomes and

more resilient infrastructure.

We have been consulting with major

airlines in relation to this for more than

a decade, including producing over 21

concept designs for a new domestic

terminal since 2012. We have been

in formal consultation with airlines

regarding terminal integration and our

capital plan since 2021, carrying out

detailed reviews, working to identify

airline requirements and find savings

where possible. If it weren’t for the

pandemic, the build would already have

been well advanced by now. There have

been calls in recent times from airlines

to delay our investment programme.

However, we think this is the wrong call

for New Zealand and would result in

higher infrastructure costs in the future.

Like airports right around the world,

Auckland Airport needs to invest to

ensure we are resilient and fit for the

future. At the same time, we are very

mindful of cost to our airline partners

and ultimately travellers.

Over the next financial year, domestic

charges will rise less than $4.00 per

passenger, and in 2027 charges will

be $8.70 per passenger higher than

they are now. These are the charges

that airlines pay as users of the airport,

and they will still represent a very

small portion of an airfare. These cost

increases will also bring our charges

to airlines in line with what Wellington

and Christchurch airports already

charge today.

Low-carbon future

As we look ahead to the transformation

of the airport, sustainability is at the

forefront – our planned investments will

help us move towards climate change

goals and create a more sustainable

airport.

Our targets are demanding and real.

We are targeting a 90% reduction in

scope 1 and 2 emissions from a 2019

baseline, to achieve Net Zero carbon

emissions by 2030. We are well on the

way to reaching this target, achieving a

27% reduction this financial year against

the 2019 baseline. Every initiative,

big and small, counts, and we are

proud to have a bold programme of

work underway.

Over the coming years, you’ll see us

make greater use of renewable energy

with giant solar arrays being built on

two developments, including the largest

rooftop array in New Zealand.

“As the international

gateway to New Zealand,

we need to upgrade,

modernise and build in

greater capacity and

resilience, so we can enable

New Zealand’s economic

and social prosperity rather

than constrain it. We want

to make Kiwis proud,

offering sustainable and

seamless customer

experiences alongside

the best in the world.”

Annual Report 2023 15

We are phasing out gas from the
terminals and switching out our air

conditioning system to electricity.

Design and construction materials

for the combined terminal will be

selected to reduce the building’s

carbon footprint as much as possible.

This is alongside a focus on waste

minimisation and water efficiency

and we are committed to our target

of a 20% improvement on these

two measures by 2030 against our

2019 baseline.

Aviation is a contributor to global

CO

2

emissions, currently producing

about 2.5% of total greenhouse gases

worldwide. In an interconnected

industry like aviation, we must work

together to collaborate and innovate

to mitigate the impacts of climate

change. We are working closely with

major airlines to understand their

needs and requirements, including the

investment they’re making in larger,

more efficient domestic aircraft, and

their planned future low-carbon aircraft.

We’re pleased to be in the leadership

group Sustainable Aviation Aotearoa,

working with our industry peers and

government agencies to accelerate the

decarbonisation of the aviation industry.

On the ground, action is happening as

well, with ground power units being

installed at each gate to supply power

to aircraft to reduce fuel use and provide

charging for electric ground-handling

equipment and vehicles. These are but

just a few of the initiatives underway to

deliver positive change.

Building activity

Beyond the terminals, construction has

ramped up right across the aviation precinct.

We were pleased to restart our

250,000sqm airfield expansion to

the west of the international terminal,

adding important resilience to aircraft

parking capacity as well as stormwater

infrastructure.

We have a $300 million world-class

transport hub underway – a project

that is all about putting the customer at

the centre of our thinking and will help

to smooth the experience for travellers

arriving and departing from the terminal,

as well as paving the way for any future

mass rapid transit to deliver passengers

direct to the airport terminal precinct.

We have a new baggage system under

construction at the international terminal

and construction of the Mānawa Bay

premium outlet shopping destination

is also well progressed, and is on

track to open at the end of the 2024

calendar year.

We’re very excited to be opening

our new 5-star hotel in December

this year, a joint venture with Tainui

Group Holdings (TGH). Te Arikinui

Pullman Auckland Airport Hotel will

offer accommodation experiences on

a new level for the airport – including

rooftop dining with stunning views of

the Manukau Harbour.

All of these projects will help to complete

the picture for revitalisation of the

airport, making it an exceptional new

travel experience for all Kiwis to enjoy

and be proud of. I hope you enjoy

reading more about these projects in

the pages ahead.

A strong team

I am immensely proud of the way our

extended team has responded to the

challenges posed during the year.

These included extreme weather,

rapid passenger growth, disrupted

flight schedules and baggage handling

issues, and I warmly thank the team

and our partners for going the extra

distance together.

I want to assure our airport users

and community that we, alongside

our airport partners, remain focused

on ironing out remaining operational

issues and thank travellers for their

understanding as we tackle this.

During the year, we added to our

management bench strength with the

appointment of Melanie Dooney as Chief

Corporate Services Officer (November

2022), Chloe Surridge as Chief

Operations Officer (May) and Richard

Wilkinson (Tūhoe) as Chief Digital

Officer (August). We also announced the

appointment of Darren Evans as Chief

Safety and Risk Officer, who will be

joining us in November. Chloe, Melanie,

Richard and Darren bring years of

experience and expertise, and will work

with our very strong existing leadership

team to help us further elevate putting

customers at the forefront of everything

we do. I wish to thank the Auckland

Airport Board for their guidance

and support amid a period of both

challenges and exciting transformation

for our airport.

From left: Chief Sustainability & Master Planning Officer – Mary-Liz Tuck, Chief Corporate Services Officer– Melanie Dooney, Chief Digital Officer – Richard

Wilkinson ( joined August 2023), Chief Customer Officer – Scott Tasker, Chief Executive Officer – Carrie Hurihanganui, Chief Infrastructure Officer – André Lovatt,

Chief Operations Officer – Chloe Surridge, Chief Commercial Officer – Mark Thomson, Chief Financial Officer – Phil Neutze

16 Annual Report 2023

Underlying net profit
after tax

$14 8 .1m

Auckland Airport recognises underlying

profit is a non-GAAP measure and a

reconciliation between reported profit

after tax and underlying profit after tax

is included in the Financial Summary

section of this annual report.

An improvement of

$159.7m

compared with the

$11.6 million loss in 2022

The directors and management of

Auckland Airport understand the

importance of reported profits meeting

accounting standards. Because we

comply with accounting standards,

investors can confidently compare

different companies knowing there is

integrity in our reporting approach.

However, we believe that an underlying

profit measurement can also assist

investors to understand what is

happening in a business like Auckland

Airport, where revaluation changes can

distort financial results or where one-off

transactions, both positive and negative,

can make it difficult to compare profits

between years.

For several years, Auckland Airport has

referred to underlying profit alongside

reported results. We do so when we

report our results, and when we give our

market guidance (where we exclude fair

value changes and other one-off items)

or when we consider dividends and our

policy to pay 70% to 90% of underlying

net profit after tax (excluding unrealised

gains and losses arising from revaluation

of property or treasury instruments and

other one-off items).

In referring to underlying profits, we

acknowledge our obligation to show

investors how we have derived this

result. You can find the reconciliation

between underlying profit and reported

profit for the current reporting period in

the Financial Summary section of this

annual report on page 90.

Looking ahead

We continue to see a positive recovery

of the aviation industry. As a result,

we are providing guidance of underlying

profit after tax to between $260 million

and $280 million for the 2024 financial

year, and capital expenditure of between

$1,000 million and $1,400 million for

the period.

We still expect our total passenger

numbers to recover to pre-pandemic

levels during 2025, in line with the

International Air Travel Association’s

(IATA) outlook for global air travel. For

the full 2024 financial year we anticipate

international passenger numbers will

be around 92% of pre-COVID-19 levels,

with domestic passenger numbers at

around 89%. This would result in overall

passenger numbers of circa 19.1 million

for the 2024 financial year.

We are in the midst of a major re-

investment in the infrastructure at

Auckland Airport to set us up for the

decades ahead. As travellers continue

to return in substantial numbers, we

are reinventing the traveller experience

and focusing on sustainability to

target ambitious reductions in carbon

emissions. Most of all, we are strongly

committed to delivering a new,

connected national gateway that does

justice to our beautiful city of Auckland

and the expectations of our global

visitors when they come to Aotearoa

New Zealand.

E mahi ana mātou mō Aotearoa.

We are working for New Zealand.

Carrie Hurihanganui

Chief Executive

Auckland Airport

Annual Report 2023 17

Piki mai, kake mai, tauti mai
Auckland Airport’s place

on the Manukau Harbour

weaves a story of adventure,

inspiration and connection,

from its earliest days when

Tainui Waka first journeyed

across the waters of the

harbour, to the summer of

1966 when the airport first

roared to life with a grand

air pageant.

About us

Back then, the domestic terminal was

the crown jewel; the 3,535-metre runway

a modern marvel. It was a huge source

of national pride, where people would

make their way past paddocks and

farmland to stand on the edge of the

airfield and witness the wonder of flight.

Almost 60 years on, Auckland Airport

still inspires and connects those

with an adventurous spirit – a unique

1,566-hectare precinct of travel,

enterprise and trade, entertainment,

dining, shopping and hospitality.

We are New Zealand’s busiest

international airport, linking 7.8 million

travellers to a total of 40 destinations in

the financial year. Before the pandemic

struck, 21 million domestic and

international travellers passed through

Auckland Airport annually. This included

more than 75% of all international

passengers to and from New Zealand

(or 92% of international passengers who

arrived into New Zealand off a long-haul

service). Around 48% of the company’s

total revenue was generated by our

aeronautical business.

Beyond the airfield, Auckland Airport is

a diverse and growing community, full

of promise. We play an important role

in supporting the economy, including

job creation.

As a property developer and landlord,

we provide high-quality premises and

services to a host of retail outlets inside

the terminals as well as businesses

within the surrounding precinct. These

range from logistics and international

freight facilities to stylish eateries, to

a heritage-listed function venue to a

bustling shopping centre, to a family

fun park and animal experience.

Our two hotels offer quality

accommodation, and we have a

further two new hotel developments

that are well advanced. We work hard

to make life easier for our customers,

offering a variety of car-parking

facilities, including a valet service, and

our online digital shopping channel

25 airlines

servicing 40 international destinations

and 23 NZ destinations in FY23

(29 airlines servicing 43 international

destinations pre-pandemic in FY19)

144,421

aircraft movements in FY23

(178,886 in FY19)

15.9m

passenger movements in FY23

(21.1 million in FY19)

165,503t

of international cargo in FY23

(190,889 tonnes in FY19)

22km

of public roads

1.4 million

sqm of runway and pavement

170,000

sqm of floor area over two terminals

We own and operate

Auckland Airport

The Mall. Our Collection Point service

means travellers can collect off-airport

and online tax and duty free purchases

when they arrive at our terminals.

Overall, our property team manages in

excess of 550,000 square metres of net

lettable area. The portfolio is now valued

at $2.9 billion, with an annual rent roll of

$147 million. Auckland Airport has 151

hectares of land available for investment

property development.

18 Annual Report 2023

5. Including $8.4m of revenue recognised for
accounting purposes for the spreading of future

fixed rental increases.

6. Landside property portfolio.

24/7

service providing aviation, fire,

medical and marine search

and rescue services

11 5

terminal-based retail tenancies

15 0

business tenants outside the terminal

2 operating

hotels

and two more in development

12 ,3 8 0+

car parks in the car-parking facilities

We provide important

services to travellers, airlines

and our commercial partners

$2.9b

of logistics and distribution

warehouses, office buildings and

shopping centres.

$ 17 0 . 6 m

5


of rental income per annum

99%

6


real estate average occupancy rate

$845m

of assets currently

under development

151ha

available for development

2 hotels

developed in partnership with

Waikato Tainui

We are a property

developer and owner

579

employees with diverse skills

and capabilities

Ara

Auckland Airport Jobs and Skills

Hub, connects South Auckland

people with jobs and training

opportunities

20,000

people typically employed

on precinct

We are a substantial employer

and enabler of employment

Annual Report 2023 19

Our Business
Model

Our business model reflects our key inputs, business

activities and strategy and how they collectively influence

our ability to create value and support our outputs and

outcomes. Without question, Auckland Airport’s success

is linked to how we ensure our aviation, commercial and

community partners are successful.

The risks and opportunities in our

operating environment shape the

way we conduct our business

Recovery of

aviation post

C OV I D -19

Capacity limits of

the infrastructure

sector

Global

aviation

pressures

Our financial capital

• Debt, equity

• Profit

• Credit rating

Our assets

• Airfield and associated

aeronautical buildings

• Commercial property

• Roading, transport and utilities

Our skills and knowledge

• Established governance framework

and operating model

• Project delivery methodology

• Data and business intelligence systems,

involving IT infrastructur

e crisis recovery systems

Our employees

• 579 employees with diverse skills

and capability

• Training for all staff

• Values-based culture

Our community and relationships

• Relationships with broad range

of stakeholders

• Brand and reputation

• Recognition of mana whenua values

Our environment

• Land for current and future growth

• Airspace

• Water, renewable and non-renewable energy utilised

External

environment

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Purpose

Kaupapa

Creating value for our

business, shareholders,

partners, customers

and New Zealand

O

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t

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p

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Place

Kaitiakitanga

Creating value for

future generations and

protecting the planet

People

Whānau

Creating value

for our employees

Community

Hapori

Creating value

for Auckland

and our local

community

Our business activities Inputs

20 Annual Report 2023

Physical and
transitional climate

change risks

Ongoing

regulatory

oversight

Increasing

stakeholder

expectations

Technological

advancements

Globalisation

Value delivered for shareholders

• Financial performance, return on investment and dividends

Enduring value for New Zealand

• Active engagement in boosting New Zealand travel,

trade and tourism

• Trigger-based infrastructure development plan in place

to ensure sufficient capacity when required

• Attracting airlines servicing a variety of ports

• Keeping our country safe from biosecurity and health risks

• Supporting sustainable airline routes

Win-win relationships with our customers

and stakeholders

• Being our passengers’ favourite airport

• High occupancy and tenure in our property portfolio

• Constructive partnerships with mana whenua

A proud, safe, diverse and motivated workforce

• Zero Harm health, safety and wellbeing culture

• Strong employer proposition including remuneration,

benefits and development

• High-calibre, diverse workforce with a variety

of skills, thoughts and capability

Improving the wellbeing of our local community

• Constructive partnerships focused on education,

employment and the environment

• In-kind and financial support for local community initiatives

• Recognition of mana whenua values

Kaitiakitanga for the environment

• Reduced footprint across waste, water, energy and carbon

• Aircraft noise impact on the local community,

mitigated with noise abatement packages

• No environmental breaches which result in

prosecution under the relevant legislation

Global

economic

pressures

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Property

Developing and managing

a successful investment

property portfolio

O

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p

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r

s

Outputs and outcomes

Aeronautical

New Zealand’s

largest owner and

operator of airports

Consumer

Delivering an

enhanced customer

experience

Annual Report 2023 21

22 Annual Report 2023

Our Strategy
Annual Report 2023 23



Our

Strategy

To be successful in a post-

pandemic world, Auckland

Airport must ensure its

aeronautical operation is

strong and resilient for the

future. We must also look

beyond our traditional areas

of operation to create more

resilience and wider

prosperity from our actions.

24 Annual Report 2023



In the 2023 financial year, Auckland

Airport has developed and launched a

new strategic plan and road map for the

business: Building a Better Future.

We have an important purpose to

revitalise and inspire as we connect

people and place. We are working

for New Zealand to create positive

change in the airport experience, the

community, and the environment and

for our country’s long-term prosperity.

Alongside our critical aviation

infrastructure, terminals and the

runway, we are an aviation precinct

of travel, hospitality, business,

entertainment and trade. A major

employment hub. A city within a city.

Our strong foundations will guide us

and our actions each day as we seek

to achieve our ambitions of delivering:

Seamless Connectivity

Empowered Community

Thriving Enterprise

Future Resilience

Enduring Infrastructure

Annual Report 2023 25

A thriving commercial community lies
at the core of the long-term success

and sustainability of our precinct. It will

encompass a wide range of industries: from

aviation and tourism; to retail and hospitality;

to accommodation and entertainment;

to high value exports and trade – a place

that New Zealanders are proud of, as they

connect with each other and the world via

a thriving aviation network. Together, we will

create a vibrant and dynamic environment

that drives prosperity for our economy.

Thriving

Enterprise

Aviation takes off

It’s everywhere on social media. Photos

of family reunions in far flung corners of

the world, kids splashing in island resort

swimming pools, or couples soaking up

the cultural sights.

“It feels like everyone you talk to has just

been on a trip overseas or is hoping to

take one soon,” says Auckland Airport’s

Chief Customer Officer Scott Tasker.

“And it’s really brought the life back to

the airport.”

Since the 1960s, Auckland Airport

has grown into a unique economic

ecosystem, supporting 25 airlines in the

financial year; 40 direct routes across

the globe; and attracting an average of

412 domestic and international flights in

and out per day over the second half of

the 2023 financial year.

Planes don’t load, take off and land by

themselves, and with airline capacity

running 90% of 2019 levels by 30 June

2023 (just ahead of the recovery in

capacity in Singapore and Australia),

thousands of jobs have returned to

the airport, helping to support the

community surrounding the precinct.

“It’s been a tough couple of years for

the aviation industry, so it’s great to

see airlines committing to restart flying

to Auckland Airport and the fresh

energy this has brought back to the

precinct. Alongside those Kiwi travellers

heading abroad, New Zealand is still

high on international traveller bucket

lists. In saying that, airline capacity is

very tight globally and we’ve needed

to put in a good deal of work to keep

ourselves on the radar of the airlines as

a preferred destination.”

A highlight has been the additional

connections and exciting new routes

between Auckland and North America.

American Airlines has begun operating

its long-awaited route to Dallas-Fort

Worth and both Air New Zealand

and Qantas launched direct flights to

New York. On the popular Los Angeles

route Air New Zealand, American

Airlines, United Airlines, and newcomer

Delta Airlines will be operating for the

summer peak.

26 Annual Report 2023

“We’re in for a busy summer with
current projections showing capacity

between Auckland and North America

set to exceed 2019 levels, with a

forecast 29% increase in flight capacity

over November 2023 to March 2024

compared to the same five-month

period prior to COVID-19.”

The other big shift has been the

easing of Chinese international travel

restrictions at the beginning of the

calendar year, which saw the return

of frequent connections to major

Chinese cities.

“China was the final market to unlock.

We were among the first to open to

Chinese tour groups, which was a

great milestone for us, but like the

other market reopenings, the initial

demand came from friends and family

reconnections, quickly followed by

business and leisure travel resuming,”

Scott says.

With Air China returning in May from

Beijing to Auckland, and Hainan Airlines

returning in June on the Shenzhen to

Auckland route, Auckland Airport now

has 27 flights per week operated by five

airlines to four cities in mainland China

(Air China, Air New Zealand, China

Eastern Airlines, China Southern Airlines

and Hainan Airlines).

Closer to home, the trans-Tasman

connectivity is back to 96% of pre-

pandemic capacity. Joining trans-

Tasman stalwarts Air New Zealand,

Qantas and Jetstar, Air Asia X started

flying between Auckland and Sydney,

with Batik Air starting on the Perth route

in August 2023. We also welcomed

Jetstar starting a new daily service

between Auckland and Brisbane.

The Maintaining International Air

Connectivity (MIAC) Scheme ended

in March, by which point the return

of airlines and increased schedule

frequency provided the necessary

bellyhold capacity for airfreight. In the

2023 financial year, 165,503 tonnes

of international cargo flew through

Auckland Airport, a 9% decrease

from the 2022 financial year, and

accounting for 90% of New Zealand’s

total international air cargo. Auckland’s

international cargo volume managed to

remain consistent during the pandemic,

with an exceptionally good year in the

2022 financial year.

“It’s been a tough couple

of years for the aviation

industry, so it’s great to

see airlines committing to

restart flying to Auckland

Airport and the fresh

energy this has brought

back to the precinct.”

29%

forecast increase in flight capacity

over November 2023 to March 2024

(compared to the same five-month

period prior to COVID-19)

Auckland Airport welcomes back international airlines

Annual Report 2023

27

Growing business community
Airports can be a bit like sliding doors

between the place you’ve just been,

and where you are going.

“Auckland Airport has changed hugely

over the past couple of decades,” says

Mark Thomson, Chief Commercial

Officer. “We’ve attracted some of the

world’s leading global brands in logistics

who have set up their headquarters

here, alongside contemporary hotels,

shops, cafes and restaurants, and

entertainment facilities for families.

“People are often really surprised by

just what is on offer out at the airport

and the diversity of the business

precinct we have here. It’s something

we’re very proud of.”

Today there are over 250 businesses

based at the precinct and over the

2023 financial year, the commercial

community has firmly bounced back,

with enterprises across the precinct

changing gear from surviving to thriving.

Shops and cafes are busy once again,

and trade is in full swing.

One of the fastest growing areas is

The Landing, a business park located

on the northern tip of Auckland Airport

and home to everything from logistics

centres, to manufacturing depots, and

pharmaceutical facilities.

“The team’s been flat out delivering new

projects and it’s been another really

strong year for the investment property

business,” Mark says.

“In 2023, we completed developments

for Kerry Logistics and Healthcare

Logistics (part of the EBOS group),

while the construction of two additional

facilities remains on track for completion

in the 2024 financial year.

“We’ve also been appointed to develop

new pre-committed standalone facilities

within The Landing for companies

which include IKEA, DHL, and Reece

Group, all of which target a 5-Star Green

sustainability rating, and will commence

construction in the 2024 financial year.

“Once completed, these developments

will have a combined value exceeding

$200 million and add a further 50,000

square metres of leased space into

The Landing.

The airport’s rent roll increase by 15%

off the back of sustained customer

demand for our high quality, well located

real estate products. Auckland Airport’s

portfolio ended the year having a total

value of $2.9b and with occupancy

levels remaining at 99% and a weighted

average lease term of 8.64 years – one

of the highest WALTs relative to the

New Zealand listed property sector.

“The financial year has been another

strong year for our investment property

business, in which we have continued

to pursue our strategy to develop high

quality, operationally efficient and

environmentally sustainable assets

leased to high covenant tenants,”

he says.

$

2.9b

total value of Auckland Airport’s

property portfolio

Award winning Healthcare Logistics development

28 Annual Report 2023

Retail
South of The Landing, Auckland Airport’s

retail community is bustling once again.

There are over 115 retailers located inside

the terminals alone, including 20 different

food and beverage operators. After

hibernating during the pandemic, most

have now returned to normal business

operations with sites fully open.

One of the largest is Aelia Duty Free,

which has taken on the role as Auckland

Airport’s duty-free operator, after

winning a short-term extension of their

contract until mid-2025 which saw the

airport move to a single operator model.

Lagardère AWPL co-CEO, Przemek

Lesniak, says the effort put in by

teams on both sides of the Tasman

to reopening the store last October

was inspiring.

“We were very emotional when those

first passengers made their way through

the store.”

Initially scheduled for September this

year, Auckland Airport’s shift to a single

operator was brought forward by three

months with the agreement of all parties

to ensure a seamless transition. As part

of the successful transition to a single

operator model, around 90% of existing

duty-free staff were able to transfer to

Aelia Duty Free. Within the next year,

a tender process is expected to get

underway for a long-term duty-free

contract at Auckland Airport.

“We feel invigorated with a team, both

new and old, on board. We are so proud

of how our team has managed the

challenges brought on by the pandemic,

and thankful to have great partnerships,

including with Auckland Airport, that

have supported us along the way,”

Przemek says.

“After hibernating during

the pandemic, most have

now returned to normal

business operations with

sites fully open.”

Aelia Duty Free

Annual Report 2023

29

Outlet shopping
Retail therapy is set to extend beyond

the terminal with Auckland Airport’s

latest development, Mānawa Bay.

Construction at the $200 million

development has been underway since

November 2022, and will create a

fashion-led retail destination within the

airport precinct, with 24,000sqm of retail

space and 100 stores ranging in size

from 50sqm to 1500sqm.

“We’re delighted with the strong

demand we’ve had from retailers signing

up for stores, including sought-after

brands Kate Spade, Coach, Fila, Ilabb,

Under Armour and Flo & Frankie, to

name a few,” Mark says.

“Leasing momentum remains very

strong with almost 50% of the facility

now pre-committed in Heads of

Agreement or Agreements to Lease. We

are also experiencing strong interest in

leasing the remainder of the facility, and

remain confident of pre-commitment

before opening late in 2024.

“The build’s progressing along really

well too, with 50% of the structure

now in place and substantial progress

being made on the civil works and

roading elements.”

Taking its name from the mangroves

growing in the nearby Pukāki Creek,

Mānawa Bay will make the most of this

water-facing location and embrace large,

light-filled open spaces in the dining

area, with an easy to navigate figure-of-

eight layout for the centre, reflecting the

concept of flight and air.

Led by Savory Construction, the project

will support 500 to 600 jobs during

construction and an estimated 1,100

retail and hospitality jobs once the

centre is open and fully operating.

Targeted to be New Zealand’s first

Five Green Star retail centre, Mānawa

Bay is pursuing sustainability initiatives

throughout the project (see pg 55).

Hotels roll out the welcome mat

At the Novotel, fresh spaces, including

a revamped bar and eatery, have

welcomed guests back since it

reopened to travellers last June.

For the six months to June 2023 the

four-star hotel (a joint venture with

Tainui Group Holdings) averaged 88%

occupancy, compared to an average

70% occupancy for 5-star CBD luxury

hotels and 65% average occupancy

for 4 to 4.5 star city hotels.

Mānawa Bay under development

Pullman Hotel under development

30 Annual Report 2023

it caused us to really focus on the
core essentials and re-look at how

we run things. For example, we

now place much greater emphasis

on extra income streams such as

private animal encounters and we’ve

gained extra efficiencies, for instance

switching to quicker cabinet food,”

he says.

Bright future for AKL

aviation precinct

Among the aviation, retail, hospitality,

accommodation, and freight

businesses that make for a bustling

precinct, is the place two huge salt-

water crocodiles, several meerkats

and a troop of tamarins call home.

Butterfly Creek, which at 22 years

is one of the longest standing

businesses operating at Auckland

Airport, is full speed ahead – this

past year bringing a much-needed

sense of relief for husband and

wife co-owners John Dowsett and

Fiona Turner.

“We’ve had a really good year.

It’s busy. I so love seeing people

back here having a good time.”

When John started the business,

the site was nothing more than a

paddock. Fast forward two decades,

and it’s buzzing with over 200,000

visitors per year.

“In visitation we’re better than we

were before the pandemic. There

were some positives of COVID-19,

“There were some

positives of COVID-19, it

caused us to really focus

on the core essentials

and re-look at how we

run things. For example,

we now place much

greater emphasis on extra

income streams such as

private animal encounters

and we’ve gained extra

efficiencies.”

89

%


averaged occupancy at the Novotel

91

%


occupancy at the ibis hotel

The nearby ibis, a 2.5 star hotel fully

owned by Auckland Airport, is similarly

going well, if not better, with an average

occupancy of 91% during the period

March to June 2023.

In December the doors will open for the

first time at Te Arikinui Auckland Airport

Pullman Hotel, a beautiful 5-star hotel

on the doorstep of the international

terminal, developed in partnership with

Tainui Group Holdings.

“We’re looking forward to opening

the doors at the end of the year to

Te Arikinui,” Mark says. It’s going to be

a premium hotel experience, right next

to the international terminal. Not only

will it provide a beautiful place to stay

but it’s set to become a landmark at the

precinct and a destination in itself.”

The name of the hotel, Te Arikinui, has

been gifted by the Māori King, Kiingi

Tuheitia. Its meaning is ‘Supreme Ariki’

or ‘Supreme Paramount Chief’ and was

the chiefly title carried by his mother the

late Te Arikinui Dame Te Atairangikaahu.

‘Te Arikinui’ was chosen to reflect the

hotel’s 5-star premium status.

Inside, the fitout currently underway

includes extensive use of Waikato

iwi inspired cultural designs which

ensure the hotel’s sophisticated and

contemporary interior design is uniquely

Aotearoa New Zealand.

The hotel’s top floor restaurant and

bar, which is named Te Kaahu, offers

stunning views out over the runway and

beyond to the Manukau Heads, and will

feature a menu strongly influenced by

local produce and the unique flavours

of our country. Te Kaahu (hawk) is

symbolic of flight, is included in the

name Te Atairangikaahu, and its feathers

are worn by those of chiefly status.

“We’re looking forward to

opening the doors at the

end of year to Te Arikinui.

Not only will it provide a

beautiful place to stay but

it’s set to become a

landmark at the precinct

and a destination in itself.”

Butterfly Creek’s John Dowsett and Fiona Turner

Annual Report 2023

31

Helping hands
Rain was bucketing down, and Dave

Powell, the man in charge of Auckland

Airport’s escalators, lifts and heating

and cooling systems, was marveling at

the new rivers pouring across paddocks

and the waterfalls cascading in culverts

along his rural drive home.

“At that point I was worried about my

roof, and to be honest, I wasn’t really

thinking about the airport.”

It was the evening of 27 January 2023.

An average January in Auckland sees

around 70 millimetres of rain fall across

the month but that night the same

amount fell in just one hour between

7pm and 8pm at Auckland Airport.

And Dave’s phone began lighting

up with images of the international

terminal’s check-in escalators sitting

deep in water.

“I couldn’t believe what I was seeing,

I honestly thought the photos had

been doctored.”

By midnight Auckland Airport had

received one month’s worth of rain

in a matter of hours. The international

terminal, as well as the forecourt area

had flooded, and the rain was still

coming down. As soon as the roads

were clear and he could travel, Dave

headed into the airport, joining dozens

of other Auckland Airport employees,

airport workers and contractors who

had been working through the night

to pump and mop up water.

Over the coming days, these

people played a critical role in the

crisis response, helping to get

the airport system moving again,

along with sheltering, feeding and

supporting hundreds of stranded

travellers facing overnight stays at

the international terminal.

We value our strong links with the

community and will continue to actively

contribute to the wellbeing and growth of

local people. We will leverage the resources

of the aviation precinct to empower and

create opportunities for people, including

our own incredible team. We foster

collaboration and support to pave the way

for positive progress and shared prosperity.

Empowered

Community



32 Annual Report 2023

“Looking back what stands out for me
is the way the Auckland Airport team

and the wider airport community rallied

together to look after travellers through

the disruption and the huge effort

that went into getting things operating

again," says Dave, who managed to take

a well-earned break after getting the

last of the necessary escalators back

in action.

“We’re so grateful to the people who

had their travel plans upended by

the flooding and the patience they

showed us while we got to work to

get things fixed.”

Melanie Dooney, who joined Auckland

Airport as Chief Corporate Services

Officer in November 2022, says she

is immensely proud of the airport’s

community response to the crisis.

“People from all parts of our

organisation were doing everything they

could to help, from manually moving

Flood support

1,000+

blankets

1,000+

hot meals

5,000+

bottles of water

30

%


of Auckland Airport employees worked

on the immediate flooding response

5,000+

hours invested in the first 10 days after

the event

bags until the baggage handling system

could be reinstated, through to providing

hot meals, blankets, a place to sleep

and a supportive ear to some very tired

and weary travellers. They not only

stepped out of their day-to-day jobs

to comfort others, but they also took

time away from their families at a time

when their homes may also have been

impacted by flooding.

“We were also able to call on our airport

partners and all the other incredible

organisations we work with to support

us to get back up and running again.

It really speaks to the values of Auckland

Airport, particularly around collaboration

and teamwork – kia tapatahi, kia

ngatahi. Our people really take them to

heart,” Mel says.

“It’s not something we save for

emergencies either. It’s part of the

airport DNA and we build this into how

we engage with our community.”

“People from all parts

of our organisation were

doing everything they

could to help, from

manually moving bags

until the baggage

handling system could

be reinstated, through

to providing hot meals,

blankets, a place to sleep

and a supportive ear to

some very tired and

weary travellers.”

Auckland Airport volunteers helping out post flooding at the terminal

Annual Report 2023

33

On the job
Matt Bagshaw, Head of People and

Capability, describes Auckland Airport

as a diverse place to work which reflects

our wider community.

“It’s a really inclusive environment,

which makes for a workforce that

brings together many different views

and perspectives. This will be really

important as we evolve to be an

airport striving to provide the best

customer experience.”

Everybody joining the Auckland Airport

whānau is welcomed with a pōwhiri

at the airport marae, Te Manukanuka

o Hoturoa, as part of the tomokanga

(gateway) ceremony. Māori and Pasifika

leadership has been fostered through

the Manu Ao leadership development

initiative, delivered in partnership with

Indigenous Growth Ltd and Te Puni

Kōkiri. Our ambition is to have 20% of

people leaders from a Māori or Pasifika

background by 2030.

One of the features of Auckland Airport

is that it’s a place of careers not just

jobs, adds Matt.

“It’s genuinely somewhere where no

two days are the same, and that means

lots of interesting work and the odd

challenge thrown in. We have people

who started in entry level roles and have

developed and grown into senior leaders

within the company.”

Providing good roles for great careers

are just part of the picture, Matt says.

“We also need to have workplace

practices and policies to make it easier

for people to do their job and to stay in

their job at every stage of their career.”

From flexible working arrangements

to parental leave provisions that offer

salary top-ups and continued KiwiSaver

contributions, Auckland Airport aims to

provide a working environment where

people can balance their professional

lives comfortably and effectively.

With a newly enhanced parental leave

offering, Auckland Airport is focusing

on attracting and retaining top talent,

as well as taking a stand on gender

equity. The parental leave policy

ultimately enables team members

to manage their role with whānau,

alongside their careers and work life,

in a way that works for them

Becoming a parent and growing a

family is a significant and exciting

period in anyone’s life. However, the

transition between parenthood and work

can be a challenge – whether that’s

navigating an uncomfortable pregnancy,

attending medical or adoption-related

appointments, sorting child-care or even

just catching up on what’s changed

when returning to work.

Auckland Airport is committed to

supporting its people on their journey

as parents by providing them with both

additional financial support – beyond

what is prescribed by the New Zealand

Government – as well as ensuring

the transition into parenthood, and

Our ambition:

20

%


of people leaders from a Māori or

Pasifika background by 2030

Enhanced parental leave offering:

100

%


Salary Top-Up of 18 weeks for a

Primary Carer

6 weeks

paid leave for partners

subsequently back to work, is as easy as

possible. This includes a primary carer

salary top-up of 18 weeks at 100% pay;

continued KiwiSaver contributions during

parental leave; 32 hours (four days)

of special paid leave (prior to parental

leave); partners receive six weeks paid

leave (Auckland Airport pays the two

weeks which are statutorily unpaid, plus

an additional four weeks); and the option

to have a graduated return to work on

full pay plus five days of family leave to

support the transition and the juggle that

all working parents experience.

Pōwhiri to warmly welcome new members of the Auckland Airport team at Te Manukanuka o Hoturoa Marae

34 Annual Report 2023

Job fair
It’s not only about keeping the people

Auckland Airport has but attracting

new people into roles at the airport.

Alongside the tried-and-true methods of

finding staff, Auckland Airport hosted a

job fair in July 2022 to boost recruitment

for roles in our workforce and across

the precinct.

“As border restrictions reduced, demand

for travel roared back and so did

demand for staff,” says Lizette Marais,

Business Partner, People and Capability.

“We were on the hunt for people at all

levels of the organisation – from senior

project management roles through

to people keen to join our guest

experience team.

“But it wasn’t just us: everyone across

the aviation system was in the same

position and to operate successfully

as an airport we all needed to get

our teams up to full strength to meet

the rapidly growing travel demand,”

adds Lizette.

The solution, she says, was to take the

lead on a job fair event that allowed

people looking for a career in aviation

to see the range of what was on offer

across all the airport organisations in

one location.

“It was well worth the four-week sprint

from the first meeting until event day.

Around 500 airport-wide roles were

Auckland Airport Job Fair

Annual Report 2023

35

filled as a direct result of that one
day, and more than 4000 people who

came through the doors were also

exposed to a variety of meaningful work

opportunities in and around Auckland

Airport. That’s recruitment gold

right there.”

Starting out with the

support of Ara

Many of the people working at Auckland

Airport were born and raised in South

Auckland, attending local schools before

entering the workforce.

To keep cementing these links,

Auckland Airport has partnered with the

Ministry of Social Development since

2015 in the on-precinct Ara Jobs and

Skills Hub. Matching local job seekers

with training and work opportunities is

vital as aviation has reawakened from

the pandemic shut down.

Melanie Dooney, Chief Corporate

Services Officer, says the Ara

partnership is about helping to

connect people with opportunities

for meaningful, challenging, and

impactful work.

“The first entry point is directly with

secondary schools. As a teenager it

can sometimes be hard to know the full

range of roles and career paths available

if you don’t have a personal connection

with a workplace or industry. That’s

something we can provide, not just in

Auckland Airport

Community Trust

Supporting communities most

impacted by aircraft noise to grow

and succeed is at the heart of the

Auckland Airport Community Trust,

an independent trust established

by Auckland Airport. Since being

established in 2003, the trust has

distributed millions of dollars in

funding to 30 schools and 250

organisations to enable them to

continue their mahi across South

Auckland.

Auckland Airport trustee

representative Bianca Cresswell says

in the wake of flooding that impacted

many South Auckland homes the

trust is targeting programmes that

focus on addressing the challenges

faced by the community following

destructive weather events.

Students Symond Ahotau, Henry Siu Samu, David Popese with Icon Construction HSE Manager Katie Matatia

Tread Lightly, a beneficiary of the Auckland Airport Community Trust

36 Annual Report 2023

450
participants have completed the

programme to date

12

South Auckland schools involved

6

students took part in Transport Hub

internship

Volunteering support

In the 2023 financial year, Auckland

Airport launched its volunteering

programme, offering one day of

paid leave for all permanent staff for

those who volunteer within the South

Auckland community.

“This year, the first year of our

volunteering programme, we had

12% of our people spend up to a day

stepping up to help organisations,

like the Middlemore Foundation,

Sustainable Coastlines and Ara

Education Charitable Trust,” says

Melanie Dooney, Chief Corporate

Services Officer.

“It’s still early days and we are

focused on working towards

our target of 40% of employees

supporting our community through

volunteering every year by 2025.

“We are proud to be part of the fabric

of South Auckland. And we want

our community to be successful.

There are many ways we can do

this, but lending a hand as a kaitūao

(volunteer) for local organisations is

something anyone who works for

Auckland Airport can do to make

a difference,” says Mel.

“It’s still early days and

we are focused on

working towards our

target of 40% of

employees supporting

our community through

volunteering every year

by 2025.”

our own workspaces but also those of

our airport and construction partners.”

Auckland Airport supports the work

of the Ara Education Charitable Trust,

which creates pathways into work for

school leavers not going directly into

tertiary education or training.

The big change through the pandemic

was to co-locate construction industry

training at Auckland Airport, says

Ara Education’s General Manager

Sarah Redmond.

“On the Nixon Road project site, we can

bring in rangatahi studying trades at

local high schools and give them on-the-

job experience while renovating houses

otherwise destined for landfill.

“The students get to understand what

it is to work on a building site and the

sustainability kaupapa means they learn

to build in a way that reduces waste and

creates a lovely, warm, weathertight

home for another generation.

“Now that construction is gearing back

up around the precinct, we can get

the students out on the bigger building

sites and really open their eyes to the

career potential within the construction

industry,” says Sarah.

“A great example of this is getting six

students out onto the Transport Hub

site once a week during the school term

to experience work life with members

of the Icon Construction project team.

Access to a complex multi-million-

dollar project exposes them to career

paths not only just on the tools but

in other aspects of construction

too. Experiences like this can be life

changing for the students.”

Auckland Airport volunteers

Annual Report 2023

37

Keeping time
It’s the stress you notice.

Debbie Giles, Auckland Airport’s Head

of Customer, says it’s all around you

in the terminals – people feeling the

pressure to be in the right place at the

right time. And one small tweak has

made things a little calmer.

Debbie says the flight information

display system (FIDS) in the international

terminal used to display the departure

gate no earlier than 60 minutes

before the departure time of the flight,

asking people to ‘relax’ ahead of gate

allocation. The trouble was many people

found it anything but relaxing.

“People were on a mission to find out

what gate their flight was departing from

and were unable to truly relax until they

had this information.”

The solution was simple. A tweak to

the system means that departure gates

now show up on the displays two hours

before the flight is due to depart.

Debbie says displaying this information

much earlier means less stress for

travellers and they can relax sooner.

Airport staff have noticed less queries

about gate information and the airlines

have reported customers turning up

more promptly which assists with their

on time departure performance.

As technology becomes ever more

integrated with our day to day lives,

Auckland Airport is always looking

for new ways to innovate to improve

operations, improve customer service

and smooth out customer journeys.

We seek to be a connected aviation

precinct that enhances travellers’ well-

being, streamlines the travel experience

and optimises maintenance and

services. With real-time responsiveness,

we will promptly address events and

traveller management. Customers will

enjoy a seamless travel experience

and enhanced services through our

integrated technology and data-driven

approach. We’re embracing the future

of aviation connectivity.

Seamless

Connectivity

“It’s a small change, but

one we know is making a

difference to our

customers.”

38 Annual Report 2023

One novel use of big data and machine
learning is helping aircraft depart on

time while reducing fuel burn.

CCTV cameras trained on aircraft

parked at the gate gather information

as airbridges attach and service vehicles

arrive to unload, reload, refuel, and

restock the aircraft. All this data is being

collated so it can be analysed with

other flight data to create a predicted

“off blocks time” – when the plane is

expected to push back and taxi out to

the runway.

“Getting the expected off blocks time is

traditionally done by someone entering

the targeted time on a touch screen

at the gate,” says Mike Side, Auckland

Airport’s Manager of Data and Digital

Operations. “Given it is a manual

process it is only undertaken about 60%

of the time and when it done, it is also

only about 60% accurate at predicting

the time the aircraft would be ready to

push back,” Mike says.

“By using data and machine learning,

we can automate a manual task, so

input compliance goes to 100%. The

prediction accuracy is currently about

the same but rapidly improving as we

add more data to the machine learning

model,” Mike explains.

Mike says that knowing more accurately

when a plane is set to depart helps

the Airways tower team to manage

departure order on the runway and

cuts unnecessary taxiway wait times

for aircraft, reducing emissions in

the process.

“By using data and

machine learning, we can

automate a manual task,

so input compliance goes

to 100%.”

Airfield Operation Officers Russell Briscoe, Lisa Eruera, Rashmi Premaratna, Carrie Hurihanganui, Alfonso Castro and Ashvin Mapara

Annual Report 2023

39

Carry on
The baggage handling system is the

engine room of the terminal, making

sure luggage gets where it needs to be,

arriving and departing with passengers.

“The baggage handling system is at the

very core of the operation of the airport.

When baggage handling doesn’t go

well, the airport gets indigestion,” says

Jason Smith, Programme Manager

Baggage Services.

This became clear during the Christmas

holidays when Northern Hemisphere

snowstorms and a global shortage

of experienced aviation staff saw

a higher-than-normal number of

mishandled bags – passengers arriving

into New Zealand without their bags

onboard their aircraft. This caused

considerable frustration for travellers

and was a headache for the airlines.

Then terminal flooding in late January

damaged the electronics of anything

sitting in the water, including the

baggage handling components of the

check-in area.

For Jason and his team, it meant fast

tracking an asset replacement and

resilience project already underway and

bringing forward planned technology

upgrades as the check-in system was

brought back online – all while staying

ahead of rocketing travel demand.

The next steps will see trials start for

automated bag drops in the check-in

area and expanded capacity into a

newly built eastern bag hall.

“Although there are still fewer flights than

pre-COVID-19, the flights are very full

and people seem to be heading away for

longer, with more – and heavier – bags.

“Customers want the

process to be as easy and

contactless as possible,

so we’re designing these

into the front-of-house

system as we also keep

in mind future passenger

growth and the integrated

domestic terminal on

the horizon.”

Proposed design of Individual Carrier System (ICS) representing industry leading

technology for the handling and processing of tomorrow’s customer baggage

Baggage Development Team: Project Manager – James Neilson, Programme Manager –

Jason Smith, Construction Operations Manager – Darrell Muir

40 Annual Report 2023

“Back-of-house this means introducing
more technology such as ‘lift assist’

and “batch loader” devices controlled

with a joystick to help ground handlers

in what is a very physical job. It opens

up the workforce to people who might

not necessarily be as big and muscular

as the traditional ground handler, and

reduces the risk of injury. With the

introduction of these new technologies,

we provide smarter ways to process

bags which fundamentally will provide

a step change in energy efficiency

and support Auckland Airport’s

sustainability objectives.

Domestic Arrivals

Early Bag Store (EBS)

Integrated Check-in

“Customers want the process to be as

easy and contactless as possible, so

we’re designing these into the front-

of-house system as we also keep in

mind future passenger growth and the

integrated domestic terminal on the

horizon,” says Jason.

“The baggage system will involve

24 different construction stages, all

completed while maintaining smooth-

flowing operations,” says James Neilson,

Project Manager Baggage. “But all

that time we’re thinking about how it

will perform in managing passenger

baggage 20 or 30 years into the future.”

Blue area shows the integrated baggage handling system

24


The baggage system will involve 24

different construction stages

Annual Report 2023 41

Model behaviour
Digital models kickstart conversations

and solve problems as Auckland

Airport works to manage potential

disruption and project risk during our

infrastructure build.

Karl Fitzpatrick, BIM Manager, says 4D

tools are the next step along the digital

path Auckland Airport has been on

for several years. Key terminal assets

are already built as digital replicas

– or Building Information Models

(BIM) – available anywhere or anytime

to employees.

“All projects are designed digitally, either

in 3D or increasingly 4D, so it’s a great

way to collaborate particularly within a

complex environment like ours. With 2D

plans it can be hard to understand what

or where it might impact on customers

or how two projects will work together.

“With multiple projects in progress

around the terminals involving different

designers and contractors we can

create a complete picture of what’s

happening and how it will be sequenced

and be able to understand where

the risk areas are – whether that’s

overlapping projects, the operational

impact of temporary works or potential

disruption to customers.”

Karl says it’s great to see project

managers viewing models in meetings

to guide their discussions about

programmes of work, and the models

are even supplied to tenants to help

them fast-track design on fit-outs

and upgrades.

“Not many airports have as much

digital model and GIS (Geographic

Information System) data as we do, so

it’s something we’re now recognised for

globally,” adds Karl.

Staying on the beat

Every orchestra needs a conductor to

stay in tune, with key players cued to

come in at the right time. The conductor

of the Auckland Airport orchestra is the

operations centre.

Housed in the heart of the terminal, it is

the 24/7 hub that maintains the airport’s

smooth tempo – from the airfield right

out into the roading network.

It requires a watchful eye to be alert to

any issues that might cause delays or

inconvenience to travellers, airlines, and

the other organisations working in and

around the precinct.

Auckland Airport’s Chief Operations

Officer, Chloe Surridge, says an upgrade

this year to both the physical space and

the support technology was a step-

change for the operations team.

“We’ve doubled the space and

created a much more modern working

environment, combined with a vastly

improving the briefing room for the

emergency operations centre (EOC),”

Chloe says.

A 21-square-metre video wall

provides a constant feed of data on

flight schedules, key functions and

processes and passenger flows

within the domestic and international

terminals. Upgraded public address,

audio visual and conference systems

make for clearer communications and

are more resilient for the 24/7 nature

of airport operations.

“It’s made an amazing difference to

how we collaborate to keep everything

running smoothly, not just between

our own people, but also among the

other key players in the airport system

particularly when we’re dealing with

issues or emergencies,” says Chloe.

Landside Operations Officer – Cece Tominiko

42 Annual Report 2023

Arrivals project
Around 10,000 people arrive

internationally into Auckland Airport

ever y day.

For most it’s a swift arrival through

border processing, bag collection

and biosecurity clearance, but at

peak times it can take longer.

“We know the experience isn’t

always as smooth as what we’d like

or what our customers expect,” says

Auckland Airport’s Chief Customer

O f f ic e r, Sc ot t Ta s ke r.

“The airport is an ecosystem,

where everyone across the aviation

system plays a part to make sure it

operates as efficiently and effortlessly

as possible. Many factors can

unexpectedly impact passenger

flows, so we wanted to take a close

look at every step of that journey to

see whether we could make it a better

arrivals experience for everyone.”

Auckland Airport convened a

squad of baggage handlers, airline

personnel and representatives from

border agencies working at the

airport, who then identified a number

of potential options to improve flows

through the arrivals process without

compromising border functions.

“One of the benefits from the aviation

system’s COVID-19 experience was

learning to come together to solve

problems quickly and effectively. It was

a very dynamic environment with a lot

less certainty than we were used to, but

as a system we were very focused on

making sure people could safely arrive

and depart New Zealand.

“It’s this way of working and the

relationships we’ve built over the past

couple of years that we can use to

improve some of the sticking points in

our airport processes.

“Together we have worked on testing

the recommended improvements,

checking the data to see if it was making

a real impact, then working to introduce

more permanent changes,” says Scott.

Since July 2023, New Zealand and

Australian passport holders have had

dedicated lanes through biosecurity

checks.

“The customer feedback from the tests

during busy periods of arrivals for trans-

Tasman flights was overwhelmingly

positive. Once we made it a permanent

change, we started seeing those

processing times reducing even during

the fairly hectic school holiday period.”

Data will have a big role to play in

smoothing the arrival and departure of

passengers, planes and cargo.

“We already share data across the

airport system, but we can build on

this to make sure everyone has the

best information to allow them to

proactively manage problems and

have them solved ahead of time –

whether it’s an aircraft arriving late

or a northern hemisphere storm

throwing the international schedule

into disarray. We need to be

leveraging technology to set ourselves

up for success and making the

best decisions ahead of potentially

tricky periods.”

“The airport is an

ecosystem, where

everyone across the

aviation system plays

a part to make sure it

operates as efficiently

and effortlessly as

possible.”

Annual Report 2023 43

Construction activity
tells the story of

Auckland Airport’s future

At Auckland Airport, a cluster of giant

tower cranes rise into the skyline

above the international terminal.

At about 50 metres tall, they move

slowly and precisely, plucking and

shifting vast loads of concrete slab

and steel into position below.

“With this many tower cranes at work,

you know there is serious amount

of construction activity happening

beneath,” says Pete Donovan, an

Auckland Airport Project Director.

“For those of us who love construction,

it’s magnificent to see all the activity.

The work we’re doing right now is

paving the way for a completely new

travel experience at our country’s main

gateway. It’s early days, but it’s hugely

exciting to be part of.”

Like many other hub airports around

the world, Auckland Airport is underway

with its most ambitious building

programme in decades – a revival that

will deliver long-term future resilience

and improve the experience for travellers.

Construction activity has soared over

the 2023 financial year, spurred by

the return of airlines and demand for

travel. More than 400,000 square

metres of airport land is now under

development for aeronautical and

transport infrastructure projects, a

major turnaround from the whiplash

of summer 2020, when projects were

suddenly halted due to the pandemic.

“We’re delighted to see our ambitions

for the future of Auckland Airport

translate into major building projects

which are now advancing at pace

and rising out of the ground,” says

André Lovatt, Auckland Airport’s Chief

Infrastructure Officer.

“It’s exciting and challenging for the

team and supply chain. It really feels like

a once-in-a-career opportunity to be

part of something truly transformational

that’s truly going to make a difference

for the travelling public and our country’s

economy in the long-term.”

As custodians, we think long-term.

Enhancing ground transportation options,

embracing digital, and investing in the

future of the end-to-end travel experience.

Our initiatives will cater to the growing and

evolving needs of customers, partners,

tenants and visitors ensuring our place

remains at the forefront. Together, we’ll

achieve increased efficiencies and a

seamless travel experience – now and

for the future.

Enduring

Infrastructure

44 Annual Report 2023

In flight: Work to improve
resilience and the customer

experience

Beyond travellers and the terminals,

the airport’s infrastructure also needs

to support a vibrant, diverse aviation

precinct – everyone from airport

workers, truck drivers, retail business

owners, to tourism operators and giant

logistics warehouses.

“It’s our job to think for the long term to

make sure we’re investing in the roads,

airfield, terminals, fuel utility systems –

everything that we need to do to meet

the needs of the growing community,

our partners and tenants, along with the

millions of travellers that pass through

here every year,” adds André.

Replacement of the ageing domestic

terminal is the cornerstone of the

airport’s infrastructure development

programme. This facility was built back

in the 1960s when aviation first boomed

in the golden age of travel.

While the domestic terminal has been

renovated over the years, Auckland

Airport is now progressing detailed

design and enabling works for a brand-

new domestic terminal. This will be

fully integrated into the international

terminal – a $3.9 billion programme

of work to transform the domestic

travel experience.

“We know our customers want a better

domestic travel experience, and we’ve

been very grateful for their patience.

We recognise a replacement of our

domestic terminal is overdue, and we

would already be further ahead if it

weren’t for the pandemic,” André says.

Set to open around 2028/2029, the

new $2.2 billion core facility will be built

at the eastern end of the international

terminal, bringing domestic travel and

international travel together under the

same roof for the first time since 1977.

André says it will be a game changer

for travellers, reducing domestic jet to

international transfer times to a five-

minute indoor walk rather than walking

outside between terminals and a new

check-in experience providing state-of-

the-art facilities for both domestic and

international travellers.

“This will be our biggest single step

forward since the airport was built. For

travellers the new integrated terminal will

be an exceptional new travel experience

for everyone to enjoy and be proud of.

“We will also provide new gates

and other facilities to help airlines to

streamline, smooth and speed-up

turn-around times,” André says.

Some of the early bones of the

building are already taking shape.

The new eastern bag hall and the

first two floors of part of the building

are already emerging to the east of

the international terminal, where 80

contractors are at work on site each

day and the new eastern bag hall will

be operational shortly.

“We’re underway with pile testing for

the new domestic terminal structure.

Design is nearly completed, and we

can’t wait to share more details about

the project with travellers soon.”

“This will be our biggest

single step forward since

the airport was built.

For travellers the new

integrated terminal will be

an exceptional new travel

experience for everyone

to enjoy and be proud of.”

The site of the new domestic terminal to be integrated into the international terminal

Artist impression of the future new domestic terminal

Annual Report 2023

45

A Rubik’s cube of airport
upgrades

Auckland Airport is a complex,

interconnected system, ranging from the

runway itself, through to taxiways and

jet stands, baggage systems, terminals,

landside transport, as well as fuel, utility

and waste, and storm-water systems.

This results in an overall construction

programme like an intricate puzzle –

a series of interdependent projects

that must be carefully planned for

and delivered in a live 24/7 operating

environment.

“We can do it, but it’s hugely

challenging,” according to André.

“Across the broader team we have

invested a lot of time in the phasing and

sequencing of each project in the overall

programme to ensure we can deliver for

our customers in a way that keeps travel

moving smoothly and doesn’t disrupt

airport operations.

“Our other core consideration is safety.

With 300 contractors and Auckland

Airport employees already working

on the infrastructure programme, and

thousands of travellers now visiting the

precinct, we need to have extremely

robust systems in place. It’s a huge

priority for us,” says André.

“Across the broader team

we have invested a lot of

time in the phasing and

sequencing of each

project in the overall

programme to ensure

we can deliver for our

customers in a way that

keeps travel moving

smoothly and doesn’t

disrupt airport operations.”

New Transport Hub under development

Artist impression of the new Transport Hub

46 Annual Report 2023

First play: Transport Hub
With a new integrated terminal in its

sights, Auckland Airport is constructing

a new $300 million transport hub at the

front door of the international terminal,

with the third floor of the building

structure now rising out of the ground.

Far more than a carpark, the Transport

Hub will create a seamless arrival and

departure experience for customers,

including an undercover connection to

the international terminal and vehicle

lanes flowing through the ground floor

of the building to create a modern pick

up and drop off zone for commercial

and public transport.

“We saw an opportunity to reduce

the amount of disruption for our

customers by fast-tracking the

Transport Hub, specifically the new

pickup/drop off (PUDO) area. Getting

that finished and open in the new year

means customers will have a great

arrival and departure experience.”

“Meanwhile, we can close the current

PUDO to transport, and the team can

continue to get on with building the

integrated terminal,” explains André.

With the skeleton structure of the

building now in place, the new PUDO

will open in March 2024 with the final

stages of the four-storey building to be

completed between September and

November next year.

2024

the new PUDO will open in March 2024

with the final stages of the four-storey

building to be completed between

September and November next year.

Annual Report 2023 47

Airfield moves: Historic
expansion of the airfield

As the Transport Hub takes shape,

another major project is underway

to boost the resilience of the airfield,

providing an additional parking

solution for planes as well as boosting

stormwater capacity.

To the west of Auckland Airport, an

expanse of land is being converted into

new airfield capable of taking the weight

of A380 aircraft. Spanning 23 rugby

fields in size, this is the largest airfield

expansion in our history. It provides

extra taxiways and seven remote stands

for aircraft that layover for several hours

before departing again, including five

stands with in-ground jet-fuel reticulation

and other services. In time this airfield

expansion will connect to the integrated

terminal to the north of Pier B, along

Getting a bathroom break

Further to the east of the airport at the

domestic terminal, two of the airport’s

busiest bathroom blocks are receiving

a major makeover as part of a wider

refresh of the domestic terminal.

“Everyone appreciates fresh, clean

bathroom facilities, and we wanted

to make sure we’re delivering a good

experience for customers while the

new integrated terminal is being

constructed,” says Auckland Airport’s

Chief Customer Officer Scott Tasker.

With the project beginning in August

2023, two bathroom facilities –

one near the regional arrivals and

departures and one opposite the Air

New Zealand bag reclaim area – will

be expanded and upgraded to add

two new parent rooms, improved

accessible toilet facilities, and the

introduction of gender-neutral toilets.

Alongside these works we are

improving signage and other

wayfinding tools to help travellers find

their way around.

“Everyone appreciates

fresh, clean bathroom

facilities, and we wanted

to make sure we’re

delivering a good

experience for customers

while the new integrated

terminal is being

constructed.”

23

rugby fields in size, this is the largest

airfield expansion in our history

with a planned cargo precinct and,

potentially further into the future, a

second runway.

“We had to pause this important project

during the pandemic, so it’s great to see

it progressing again as a critical enabler

of the integrated terminal development

and helping us to minimise disruption to

busy airline operations,” adds André.

Expansion of airfield

Project Director – Dale Anthony and Assistant Project Manager – Jose Lanada

48 Annual Report 2023

23
rugby fields in size, this is the largest

airfield expansion in our history

Strategic play: Resilient and

accessible roading

Auckland Airport’s 22 kilometre

roading network is one of the busiest

in Auckland, with travellers, tourism

businesses, truck drivers, airport

workers and crew cargo all relying

on its efficient and smooth operation.

In the 2023 financial year, we

undertook a trio of transport projects

across the precinct, investing

$90 million in the following

developments: Park & Ride South,

Laurence Stevens Drive upgrades

and the Te Ara Kōrako extension.

André Lovatt, Chief Infrastructure

Officer, says the upgrades will enable

more reliable travel movements, and

cater for future growth.

“These interconnected projects

increase reliability of access to the

terminal and other infrastructure. This

bakes resilience into our transport

and roading network, so travellers

can get to their destinations safely,

and on time and with access to more

public transport options so there’s

less reliance around single vehicle

journeys to the airport” he says.

“These interconnected

projects increase reliability

of access to the terminal

and other infrastructure.”

$90million

invested in the following

developments: Park & Ride South,

Laurence Stevens Drive upgrades

and the Te Ara Kōrako extension.

Annual Report 2023 49

On the journey
It’s one of Auckland’s busiest roading

networks. Around 79,000 trips take

place to and from Auckland Airport

each day, flowing in and out on a tide

of airline schedules, shift changes, and

freight deliveries.

“We’re a very busy aviation precinct and

it’s important people have reliable ways

to catch flights, get to work or move

cargo,” says Chief Sustainability and

Master Planning Officer Mary-Liz Tuck.

“There’s been a lot of work and

investment in making sure our transport

network is getting people from A to B

as easily as possible. But road space,

parking – these are all finite resources so

we need to start planning now to make

sure those who need to drive to and

from the airport can still do that, while

also ensuring some great, reliable, and

convenient options for everyone else.

“More importantly, we need to support

the reduction of carbon emissions

through better use of the roading

network. In transport jargon it’s

modal shift – moving from one form

of transport to another, more efficient,

lower carbon option.”

With airport workers accounting for

many drivers on the road to and from

the airport, Auckland Airport wanted

to find out more about how they were

travelling and why they were choosing

to drive.

So, the airport carried out an extensive

survey of airport workers across the

precinct, asking about how they how

they got to work, where they were

coming from, how many days a week

they were at the airport for work,

when they were typically arriving and

departing, and importantly, what were

the main barriers to considering other

options for those journeys. “We were

really blown away by the response

– getting to work was certainly a

hot topic. More than 2,200 people

answered the survey, and over 80%

were from organisations other than

Auckland Airport.

We’re not just a business – but a multi-

generational endeavour. Applying a

long-term perspective in everything

we do. Working closely with tangata

whenua, prioritising our people, aviation

community, our country’s economy and

the protection of our natural environment.

With our partners, we are driving modal

shifts across transport and applying new

technologies towards decarbonisation.

Together, we’re building a sustainable

legacy that benefits future generations.

Future

Resilience

50 Annual Report 2023

“What we heard was that people were
keen to get out of their cars – the fact

that 67% of respondents might or would

consider carpooling is a pretty good

indicator – but currently the alternatives

aren’t nearly as easy or convenient. So,

we’re currently in a position that nearly

90% of our surveyed staff are coming

to work in a car and even though 12%

were using electric or hybrid vehicles,

which is much higher than the general

population, we need to start planning

for a workforce that is less dependent

on cars for that work journey.”

Storm watch

Underpinning reliable and dependable

infrastructure is a network of hidden

pipes and cables ensuring it can run,

uninterrupted, 24/7.

“It’s this investment in the ground that

is vital to our operation – it’s what

keeps us pumping. We have made a

significant investment in upgrading our

utilities, including stormwater, and if

the incredible deluge we experienced

in January taught us anything, it is that

we need to keep making sure we keep

getting on with these infrastructure

upgrades,” says Mary-Liz.

As Auckland flooded in late January

during record breaking rainfall, so

did parts of the airport, including the

international terminal.

“We’ve been very conscious of

how climate change will impact our

operations in the coming years and

are aware of the need to design future

infrastructure to withstand the effects

of increasingly frequent and intense

storms as well as rising sea levels.”

A climate change study was

commissioned in 2019 to understand

the flooding and inundation risk in

critical areas, such as the runway and

apron. Since then, further studies have

determined the extent of flooding and

“After the January flooding event

we relooked at our stormwater

management calculations. While we

were comfortable with what we were

doing, this is long-term infrastructure.

Once it’s in the ground it’s a very long

time before you consider digging it up

and replacing it, so we made the call to

make sure everything that was put in

place could handle weather extremes.

“Our approach is to take every

opportunity as part of all infrastructure

projects to upgrade the stormwater

systems. The upgrades along George

Bolt Memorial Drive, the new terminal

exit road and the under-construction Te

Ara Kōrako have all got hefty stormwater

management systems. It’s a major and

ongoing programme of work.

“Head out to the new Park & Ride

being built on Puhinui Road and you’ll

see broad strips running between the

car parks. When complete, these will

be swales – bands of vegetation that

work to slow the flow of stormwater

while naturally filtering sediment and

contaminants – covering about 20%

of the facility’s footprint.

“Because that’s the other important

aspect to this work. Auckland Airport

are guardians of this special place, so

we need to make sure the water being

discharged into the Manukau Harbour

is of the highest quality possible.”

inundation under low, moderate, and

high climate change impact scenarios.

“These studies told us that our

infrastructure was sufficient to cope with

climate change events under all scenarios

until 2046. But we wanted to get out

ahead of these risks and got underway

with work immediately. We expect by

2025 we will be well placed to weather

the impacts of a worst-case climate

change scenario.”

A comprehensive stormwater

management strategy guides infrastructure

development around the precinct.

Substantial stormwater network upgrades

are carried out in parallel with our

infrastructure development programme

to improve resilience against flooding and

enable the international terminal to remain

above flood levels for future modelled

climate change scenarios.

Te Ara Kōrako extension

Senior Wildlife Ranger – Dan Wignall charging company electric vehicle

Annual Report 2023

51

Sustainable Aviation
Aotearoa takes off

Decarbonising aviation is a team effort

– no organisation can do it alone.

This year Auckland Airport became

a founding member of Sustainable

Aviation Aotearoa, a group which

brings together government, as well

as the aviation and energy sectors to

work on a strategy to lower emissions

from domestic aviation.

“Being a fairly sparsely populated,

remote island nation with some

challenging topography means air

transport is pivotal for moving people

and freight – both around the country

and out to the world,” says Mary-Liz.

“Making aviation more sustainable is

critical and establishing Sustainable

Aviation Aotearoa recognises that

it’s going to take action on a number

of different fronts to make it happen.

Sustainable Aviation Aotearoa brings

together the key players to share

information on the technology,

regulatory settings and investment

needed to prepare for a greater use

of Sustainable Aviation Fuel (SAF) and

the electrification of aircraft.”

Auckland Airport is already putting

in place the infrastructure to support

airlines in achieving their sustainability

targets.

“The fuel infrastructure on our airfield

has been upgraded over the past

few years as part of our ongoing

maintenance programme and

preparation for future terminal works,

but is ready for any certified ‘drop in’

fuel types.”

“Auckland Airport is

already putting in place

the infrastructure to

support airlines achieve

their sustainability

targets.”

We continue to work with Airways

and airlines to reduce emissions

from aircraft. Fuel saving flight

paths have been introduced,

aircraft take time is being

minimised and just-in-time

pushback allows aircraft to delay

their engine use.

Ground Power Units

52 Annual Report 2023

Paving the way to recycling
the runway

Old pavement from the runway is

getting a new lease on life to the

west of the international terminal as

part of Auckland Airport’s airfield

expansion.

More than 100,000 tonnes of

concrete that formed the runway

touchdown zones is being crushed

and reused in the new airfield

development to accommodate

future growth.

Andre Lovatt, Chief Infrastructure

Officer, says the expansion work

is a concrete (pun intended)

example of interlocking resiliency

with sustainability to demonstrate

long-term growth.

“Rather than disposing of the old

pavement offsite, we’ve been

setting it aside, creating a huge

mound of 45,000 cubic metres

of concrete to the south of the

airfield. The old pavement then gets

crushed for use in the construction

“While we are constantly talking to

airlines about what they need from

airport infrastructure to support future

low-carbon fuel options, we can’t stand

still on opportunities available today for

a lower aviation carbon footprint.”

Auckland Airport is investing in electric

ground power units at each gate in the

new integrated terminal, allowing aircraft

to run on electricity while waiting on the

aircraft stand rather than burning jet fuel.

“It’s about investing for the here

and now, as well as the future,”

says Mary-Liz.

“As well as reusing the

concrete, we’re also

removing more than

6,000 truck trips off the

roading network.”

of new airfield. As well as reusing

the concrete, we’re also removing

more than 6000 truck trips off the

roading network.”

Cement is estimated to be

responsible for around 8% of all

global carbon emissions, while

construction waste shapes a

significant part of the waste stream.

We have provided two banks of

common-use electric vehicle (EV)

chargers, totalling 24 chargers,

on the airfield to support

groundhandlers in their transition

to electric ground support

equipment (eGSE).

Ground power units (GPUs) and

pre-conditioned air (PCA) are

being supplied at all international

gates so aircraft can connect to

NZ’s low carbon electricity

supply instead of burning jet fuel

while at the gate. GPUs will also

be installed at all gates in our

new domestic jet facility.

Chief Infrastructure Officer – André Lovatt

Annual Report 2023

53

Nature space
Taking its name from the wading birds

that flock to the rich food resources

of its waters, the Manukau is a unique

airport location.

“The development and operation of the

airport has had an impact on this special

and significant place, but it’s something

of which we’re very aware and look

to minimise and mitigate the impact

of what we do and, where possible,

actually improve the current state of the

environment,” says Lucy Hawley, who

leads the wildlife team.

“Auckland Airport is a long-term

business. That long-term thinking is

part of who we are, one which we look

to apply to all areas of our business.”

A dedicated team of wildlife rangers,

with qualifications and expertise in

conservation management, have

worked alongside the Department of

Conservation to create safe nesting

sites for the tūturiwhatu (New Zealand

dotterel) on both the airfield and on

the wider precinct, including on the

construction site for Mānawa Bay.

“It’s really neat to see these balls of

fluff tottering around what many would

consider a pretty inhospitable nesting

site. But it’s through our predator control

“It wasn’t possible to run coastal

clean-ups during the pandemic, so it

was great to be back out clearing our

backyard of unwanted rubbish. We

managed to collect 24 bags of rubbish,

mainly single-use plastic. Given this is

an area that’s in the secure, airside part

of the airport and sees very little human

activity, this is waste that has floated

or blown in. As an organisation it’s our

responsibility not just to clear this waste

but to play our part in making sure it

doesn’t end up there in the first place,

so were very focused on making sure

we are doing what we can, whether it’s

on our building sites or in the terminal,

to reduce the amount of waste being

generated,” says Lucy.

Pivoting from gas to electric

Gas is on the way out at Auckland

Airport, as the team moves towards

switching its air conditioning system

to electricity.

The airport requires the equivalent

of 3,000 household air conditioning

units to cool and heat the 141,000sqm

international terminal, which is a massive

contributor to Auckland Airport’s scope

1 carbon emissions.

Mary-Liz Tuck, Chief Sustainability and

Master Planning Officer, says the move

and careful watch that the tūturiwhatu

can make a success of raising

their chicks.”

When it isn’t possible for native species

to coexist in the busy airport precinct,

care is taken to find them a new home.

“We were really fortunate to be able

to work alongside local iwi Te Akitai

Waiohua to relocate hundreds of eels

from a man-made pond in what was

the airport’s golf course near Mānawa

Bay, to another pond near the Manukau

Memorial Gardens.

“Eels are an important part of the

ecosystem. Not only do they hold

special significance for Māori as a

traditional food source, but they also

indicate a healthy waterway. Changes

to their habitats have really impacted

the eel population so we want to do

what we can to reverse that decline.”

Human impact is also evident out on the

edges of the airport, where the airfield’s

sea wall meets the water. It’s here that

waterbourne rubbish settles among the

rocks and vegetation.

Auckland Airport volunteers worked

alongside Sustainable Coastlines, a

charity focused on removing litter from

beaches, to clean up rubbish from the

edge of the Manukau.

Auckland Airport volunteers working alongside

Sustainable Coastlines on the Coastal Cleanup

54 Annual Report 2023

from gas to electric will shift the dial
in reducing the airport’s footprint.

“Of all the carbon emission contributors

to Auckland Airport, natural gas plays a

substantial role in our carbon footprint.

By transitioning from gas to electric,

we’re taking a giant leap in eliminating

our overall emissions, as well aligning with

our goal of net-zero carbon emissions by

2030,” says Mary-Liz.

The transition will be phased over years,

however, the first and most significant

saving will be when six natural gas

boilers – totalling 6.5 megawatts of

heating – are replaced with electric

air-source heat pumps.

Cooking with (no) gas

Auckland Airport’s new premium

outlet and shopping centre Mānawa

Bay will welcome New Zealand’s

first fully electric food court when it

opens next year.

Currently under construction,

Mānawa Bay will also have a zero

natural or LPG gas policy, which

will erase more than 50% cent of its

kitchens greenhouse gas emissions.

Removing gas onsite is a crucial

step towards unlocking a 5 star

Green Star rating for the shopping

centre, which is in line with Auckland

Airport’s decarbonisation pathway

to achieve net zero direct carbon

emissions by 2030.

With 13 planned food and beverage

operators all cooking and heating

with electricity only, there will be

less wasted energy moving into the

atmosphere. On average, 65% of

energy generated by gas is wasted

into the air, instead of being used to

heat food.

“With 13 planned food

and beverage operators

all cooking and heating

with electricity only, there

will be less wasted

energy moving into the

atmosphere.”

Once the move from gas to electric is

completed it will deliver 1,500 tonnes

of carbon reduction per year.

Solar power is another way of shrinking

carbon emissions, and when completed,

the airport’s new premium outlet store

Mānawa Bay will house the largest

rooftop solar system in Aotearoa (2.3

megawatts), with the panels generating

the equivalent of 80% of the 100-store

centre’s power usage.

The Transport Hub is also being built to

include a solar array of 1.2 megawatts

on its 14,000sqm roof.

“Rooftop solar systems can provide a

resilient supply of renewable energy

as our hard-working airport evolves for

future growth. Any new infrastructure

that’s required in our wider precinct

can result in more carbon emissions,

and we’re constantly looking at how

we can reduce our footprint with

innovation, technology and sustainable

investment” says Mary-Liz.

The combined solar power production

from Mānawa Bay and the Transport

Hub is expected to reproduce enough

energy to power 634 houses per year,

and avoid approximately 588 tonnes of

CO

2

emissions per year.

Artist Impression of Mānawa Bay solar panels

Artist Impression of Mānawa Bay future dining area

Annual Report 2023

55

56 Annual Report 2023

Sustainability
Annual Report 2023 57

Purpose Kaupapa
Creating value for our business, shareholders,

partners, customers and New Zealand

Place Kaitiakitanga

Creating value for future generations and

protecting the planet

People Whānau

Creating value for our employees

Community Hapori

Creating value for Auckland and our

local community

Sustainability at

Auckland Airport

The decisions Auckland

Airport makes today have

a long-term and enduring

impact, not just for our

customers and aviation

partners but also for the

community, the environment

and for the prosperity of

Aotearoa New Zealand.

At Auckland Airport, sustainability

is embedded into everything we do.

Since 2020, our sustainability strategy

has been framed by four key pillars

(see beside).

As a long-term, multi-generational asset,

we are focused on building a better

future and accelerating sustainable

and inclusive growth that creates

prosperity for communities and the

environment. These pillars have guided

our business activities for the past

three years, allowing us to establish

a decarbonisation pathway and

implement initiatives across all facets

of sustainability.

With the recovery from COVID-19 well

underway, we are now entering the next

phase of our sustainability journey, and

as such we will evolve our sustainability

strategy in the next financial year.

Carbon reduction and climate

adaptation will remain priorities, but

we will place more focus on biodiversity

and waste to help us to create a

resilient future.

Sustainability Pillars

58 Annual Report 2023

27%
reduction in scope 1 and 2 emissions

from the 2019 baseline

227

native eels translocated to the

Manaukau Memorial Gardens Pond

97t

of organic waste diverted from

landfill from a waste separation

trial in the terminal

FY23 Highlights

500kW

electric heatpump installed to replace

natural gas boilers

108,000t

of concrete from the runway used in

the development of the remote stands

24

EV chargers installed on the

airfield for groundhandlers and

airfield vehicles

Annual Report 2023 59

AKL: Destination
Net Zero

Auckland Airport is a gateway to

Aotearoa New Zealand, essential

for connecting families and enabling

tourism and trade into the country.

Aviation has bounced back strongly

from COVID-19 over the past year,

highlighting the need to keep emissions

reduction a priority for a resilient, low-

carbon future. Our priority is to minimise

the emissions created by our day-to-

day operations while working with our

partners and stakeholders to support

industry-wide decarbonisation.

Auckland Airport has a focus on

carbon reduction, water conservation

and waste minimisation and our 2030

targets include:

What is Net Zero?

Net Zero is a scientific concept

established by the Intergovernmental

Panel on Climate Change (IPCC). It is

the state where the amount of global

emissions released into the atmosphere

is equal to the amount of CO

2

removed.

The IPCC recommends limiting global

warming to 1.5°C above pre-industrial

levels by 2100 to avoid the worst

impacts of climate change on people

and the environment. The IPCC has

established that Net Zero emissions

must be reached globally by 2050 but

relying on offsets is not enough. Global

emissions must begin reducing today.

Net Zero

scope 1 and 2 emissions by 2030

resulting in

90%

reduction in emissions from 2019 levels


(27% reduction in FY23)

20%

reduction in waste to landfill

*

20%

reduction in potable water use

*


Eliminating our direct emissions

Auckland Airport’s priority is to work

towards Net Zero scope 1 and 2

emissions by reducing emissions

created by our day-to-day operations

as much as we can, with any residual

emissions neutralised through

permanent carbon removals.

We are targeting a 90% reduction in

scope 1 and 2 emissions by 2030 from

a 2019 baseline, which is aligned with a

best-practice 1.5°C warming trajectory.

What are scope 1, 2 and 3

emissions?

Scope 1: Emissions from sources

that are owned or controlled by

Auckland Airport

Scope 2: Emissions from the generation

of purchased electricity consumed by

Auckland Airport

Scope 3: Emissions that occur as a

consequence of Auckland Airport’s

activities but from sources not owned

or controlled by Auckland Airport

60 Annual Report 2023

Auckland Airport’s scope 1 and 2 decarbonisation pathway
The decarbonisation pathway aligns with a 1.5°C trajectory and FY23 performance shows a 27% reduction from the baseline year.

Electricity

1

6

0

3

2

7

4

5

FY19FY21FY20FY22FY23FY24FY25FY26FY27FY28FY29FY30

tonn

e

s C

O

²

e (

thou

s

a

nds

)

Diesel & petrol Fire training fuels &

extinguishers

Refrigerants 1.5°C trajectory Natural gas

Forecast emissions

Reducing our direct emissions

In 2020 we set a target to be Net Zero

scope 1 and 2 emissions by 2030. To

reach Net Zero, we have clearly defined

a decarbonisation pathway which

sees us targeting a 90% reduction in

scope 1 and 2 emissions from a 2019

baseline, with the residual emissions

(estimated at 10%) neutralised through

permanent carbon removals. Our

Net Zero target and accompanying

decarbonisation pathway are aligned

with a 1.5°C trajectory.

We have been working on our scope

1 and 2 decarbonisation pathway for

three years now and are pleased to

have implemented further initiatives

and trials over the course of the

financial year to reduce our emissions.

This financial year, our scope 1 and 2

carbon emissions equal 4,291 tonnes

of carbon dioxide equivalent (tCO

2

e)

which represents a 27% decrease from

the baseline year (2019) and is tracking

ahead of our decarbonisation pathway.

Reducing our indirect emissions

Scope 1 and 2 emissions make up only

a small proportion of Auckland Airport’s

GHG emissions inventory. In reality, the

vast majority of emissions that occur

as a consequence of the operation

of New Zealand’s largest airport are

outside of our operational control. We

are actively partnering with stakeholders

across all areas of our business to

address these emissions and work

towards Aotearoa New Zealand’s goal

to reach net zero by 2050.

See the 2023 GHG Inventory for further

details on scope 1, 2 and 3 emission

sources and initiatives underway to

reduce these emissions.

“We have been working

on our scope 1 and 2

decarbonisation pathway

for three years now and

are pleased to have

implemented further

initiatives and trials

over the course of the

financial year to reduce

our emissions.”

7. The 2019 baseline and decarbonisation pathway

was updated in the 2023 financial year to remove

electricity line losses as a scope 1 emission source.

It was highlighted through our greenhouse gas

(GHG) verification process that these emissions

sources were being double counted and should

only be included as a scope 3 emission. See the

2023 GHG Inventory for further information.

Annual Report 2023 61

Scope 1 and 2 emissions over time (tCO
2

e)

Breakdown of carbon footprint (FY23)FY23 Scope 1 and 2 emissions by source (tCO

2

e)

Diesel – stationary 1%

Natural gas – stationary 35%  

LPG – stationary 0%  

Diesel – transport 7% 

Petrol – transport 2%  

Refrigerants 3%

Fire extinguisher 0%

Purchased electricity 52%

Total scope 1 <1%  

Total scope 2 <1%  

Scope 3 aircraft 98% 

Scope 3 excluding aircraft 2%  

0

1

2

3

4

5

6

7

FY19FY20FY21FY22FY23

tonn

e

s C

O

²

e (

thou

s

a

nds

)

Electricity

Natural gas

Diesel & petrol

Refrigerants

Fire training fuels &

extinguishers

62 Annual Report 2023

Aircraft-related emissions
In the 2023 financial year we have

updated our GHG scope 3 inventory to

include full flight emissions, replacing

the previous calculation of aircraft

landing and take-off. This aligns with

best practice for the airport industry and

uses the methodology recommended by

the Airport Carbon Accreditation. These

emissions make up over 90% of our

GHG emissions inventory and they are

tricky to tackle; they require significant

technology changes to decarbonise.

We are working closely with our airline

partners to understand their plans to

introduce alternative aircraft fuels and

technologies, and the infrastructure

requirements to enable these to be

deployed at Auckland Airport.

“The technology is proven,

already available across

the world and can be

delivered to aircraft via

Auckland Airport’s existing

refuelling hydrant system.”

Sustainable Aviation Fuel (SAF) is

widely considered the best option for

decarbonisation of long-haul air travel.

The technology is proven, already

available across the world and can

be delivered to aircraft via Auckland

Airport’s existing refuelling hydrant

system, however cost and security

of supply remains a challenge.

Air New Zealand’s flagship shipment of

SAF in September 2022 was delivered

to Marsden Point and piped through

existing fuel pipelines to Auckland

Airport and through to aircraft.

We are also active members of

Sustainable Aviation Aotearoa, which

brings together government and

industry to prepare for and accelerate

the adoption of lower emissions aircraft.

Annual Report 2023 63

Climate Change Disclosure
Auckland Airport has an

extensive coastline given our

unique location adjacent to

the Manukau Harbour. As a

result, physical inundation

and flooding of assets due

to sea-level rise and extreme

weather events is one of

our key climate-related

risks. Our business model

is built on the operation

and development of

aeronautical infrastructure

and commercial property.

This means impacts from

sea-level rise and extreme

weather events could

significantly affect our

business operations.

In addition, due to the high carbon

profile of the aviation industry, there

are various risks to our operations

associated with the transition to a

low-carbon economy. Domestic and

global carbon policies impacting aviation

activity, as well as public perceptions

towards air travel, have the potential

to affect Auckland Airport.

We keep abreast of local and global

trends in climate change research

and modelling and undertake regular

environmental scans and analysis of

key factors such as: developments in

global carbon policy; public perception

of aviation; and technological

advancements to decarbonise aviation,

so that we are able to respond to any

emerging risks or opportunities early.

Auckland Airport has been assessing

and disclosing climate-related risks and

opportunities concerning its operations

since 2021. Throughout this time we

have advanced our understanding of

how climate change, including rising

sea levels and temperatures, and

unpredictable weather patterns will

impact our operations and infrastructure.

The extreme weather events of early

2023 showed how important it is to

have a full understanding of the risks

of climate change.

This year we have progressed our

climate change disclosures, reporting

in accordance with the Task-force on

Climate-related Financial Disclosures

(TCFD) framework and complying with

the New Zealand External Reporting

Board’s (XRB) climate-related

disclosure standards one year early.

The full disclosure is available on our

company’s website.

64 Annual Report 2023

Core elements of recommended
Climate-related Financial

Disclosures

Governance

The organisation’s governance around

climate-related risks and opportunities

Strategy

The actual and potential impacts of the

climate-related risks and opportunities on

the organisation’s businesses, strategy and

financial planning

Risk management

The process used by the organisation to

identify, assess and manage climate-

related risks

Metrics and targets

The metrics and targets used to assess

and manage relevant climate-related

risks and opportunities

Metrics

and targets

Risk management

Strategy

Governance

Annual Report 2023 65

Auckland Airport’s
Environmental Performance

ScopeF Y19FY20FY21FY22FY23

Scope 1 emissionstonnes CO

2

e2,4722,3971, 6742,0042,060

Scope 2 emissionstonnes CO

2

e3,4233,2242,6153,0072,231

Scope 3 emissions

(excluding aircraft)

tonnes CO

2

e6,2285 ,18 516,49711, 4 6 448,629

8

Scope 3 emissions –

aircraft

9


tonnes CO

2

eN/AN/AN/A66,0592,530,432

Waste to landfill tonnes24622474844

10

7222,392

Potable water usem

3

375,968315,652129,51416 9,13 8268,622

8. In the 2023 financial year Auckland Airport

introduced a wider range of scope 3 emissions

sources in an aim to align disclosure with the

international Airport Carbon Accreditation

framework. This includes aircraft full flight

emissions as well as contractor vehicles, airside

vehicles and tenant electricity use.

9. In FY23 we have updated our GHG scope 3

inventory to include full flight emissions, replacing

the previous calculation of aircraft landing and

take-off.

10. Significant reductions in waste, water and carbon

emissions were achieved against the 2019 baseline

in the 2021 and 2022 financial years due to the

much lower passenger numbers as a result of

COVID-19.

For Auckland Airport’s full 2023 financial

year emissions profile, refer to our

Greenhouse Gas Inventory Report on

the company website.

Information within our GHG Inventory

has been prepared in accordance with

the Greenhouse Gas Protocol: A

Corporate Accounting and Reporting

Standard (2004).

Heating, Ventilation, Air Conditioning Team Leader – David Powell

66 Annual Report 2023

Material Issues
Every three years we undertake a comprehensive materiality

assessment, including interviews with stakeholders, to identify

the sustainability issues and topics that are most significant for

our business. This was last completed in 2020, and while we

have reconfirmed that our previously identified material issues

are still relevant for Auckland Airport, we will be undertaking

the materiality assessment with our stakeholders later in 2023.

These material issues and our sustainability strategy align with

the objectives of the United Nations’ Sustainable Development

Goals. We have continued to progress activities to address our

material issues:

Material issueProgress in the 2023 financial year

Safety, health, wellbeing and security

Auckland Airport is a Port of First Arrival and

major infrastructure operator; therefore, the

health, safety, wellbeing and security of our

people, airport workers, customers and visitors

to the precinct is our first priority. We have a key

role to play in protecting New Zealand and its

people from diseases and biosecurity threats.

In the 2023 financial year, we made significant progress in our health,

safety and wellbeing strategy by shifting from a destination zero-harm

approach to a people-first culture. This shift recognises the value of

our people – employees, contractors and stakeholders – and ensures

we provide them with a safe and healthy working environment on a

daily basis

• Critical risk effectiveness workshops were initiated, laying the

groundwork for effective management of our critical risks.

• We hosted and participated in various safety-focused campaigns and

events, such as Airport Safety Week, Ramp Up & Ready Fortnight,

Contractors Forum, Mental Health Awareness Week, and OCP Coffee

& Chat sessions.

• Our Just Culture Strategy was redesigned to align with our core values,

and the new application was implemented across the business. This

began our journey towards creating an environment of psychological

safety, with a roadshow to introduce the new application to the entire

organisation, which promoted recognition equally when things go well.

• Terminology changes were implemented to foster a continuous

improvement mindset, encouraging the identification and learning from

’learning events’ which were shared across the business.

• We successfully achieved recertification and positive results following

the assessment of ’effective and operating’ of our SMS CAA Part 100.

• To address the critical risk of fatigue within the wider airport

community, a CUSP subgroup was formed to improve our fatigue

management. Members are from the wider airport community.

• Ongoing efforts were dedicated to enhancing our response and

resource allocation for potential natural disaster events following two

weather events.

• A significant milestone was reached by the Permit to work (PTW)

team, issuing 400 permits in a single month. This demonstrates the

increased infrastructure and high-risk work in the airport vicinity,

supported by a skilled team to accommodate further projected growth.

Annual Report 2023 67

Material issueProgress in the 2023 financial year
Wider economic contribution

As New Zealand’s largest international airport

we are a key driver of travel, trade and tourism,

boosting the country’s economy as well as

employment in the Auckland region. We will

play a vital role in helping the economy and

community to rebuild post the pandemic.

• Significantly rebuilt our international aviation connections to around 90%

of pre-COVID seat capacity. As of June 2023 we had 25 airlines flying to

40 destinations, up from just 12 airlines and 21 destinations while the

border was closed.

• Hosted the Auckland Airport Job Fair, to connect job seekers with career

opportunities on our precinct. More than 3,000 job seekers were able to

connect with 30 employers and discuss the more than 3,000 roles on

offer. Five hundred roles (or 17%) were filled on the day.

• Ran a sprint process with airlines and government border agencies to

improve the customer experience for arriving international travellers.

• Participated in government business delegations to promote

New Zealand offshore to help rebuild our tourism and export industries.

Customer experience

The welcome experience travellers receive when

they arrive in or depart from New Zealand is

overseen by Auckland Airport. We are committed

to making journeys better for our customers;

listening to and responding to their needs; and

delivering infrastructure in the right place at the

right time.

• A dedicated team has been formed to deliver our new customer strategy,

which puts the customer at centre of our business, and ongoing

improvements to customer experience at Auckland Airport.

• Establishment of a centralised insights function within Auckland Airport

so that we can build a better understanding of our customers, how they

experience Auckland Airport and what they value.

• Establishment of a centralised customer care, contact centre and social

media team within Auckland Airport enabling us to communicate and

respond quickly and directly with our customers when they need us.

• Worked alongside our airport system partners (such as airlines, border

agencies and groundhandlers) to drive improvements in customer

experience for travellers at Auckland Airport as the local and global

aviation system recovers from the pandemic.

• Our Auckland Airport community came together to provide customer

welfare and support such as food, shelter, blankets and other needs

during the devastating Auckland floods and again during cyclone

Gabrielle in early 2023. Our infrastructure partners, contractors and

suppliers worked with us behind the scenes to get the airport back up

and running again as soon as possible for our customers.

Aircraft noise

We continue to work with our airline and air

navigation partners to manage aircraft noise and

the impact on people living and working beneath

flight paths. Although aviation activity is still lower

than pre-pandemic levels, aircraft noise has

continued to increase during the 2023 financial

year. Auckland Airport funds a comprehensive

noise mitigation programme to reduce the impact

of aircraft noise on the community.

• Despite reduced aircraft noise in 2023, Auckland Airport continued to

offer noise mitigation packages. We offered to install heat pumps,

insulation and extraction fans in approximately 150 homes during the

2023 financial year.

68 Annual Report 2023

Material issueProgress in the 2023 financial year
Responsible employer

We strive to be a good employer. We work hard

to create a diverse and inclusive environment

where people want to work, providing new

opportunities to develop, support and empower

our people.

• As part of our Annual Performance and Remuneration round, we moved

all impacted employees to the 2023 Living Wage on 1 July (before the

Government’s 1 September date).

• Tomokanga – our welcome to all new employees is held at the Auckland

Airport marae – Te Manukanuka o Hoturoa, and continues to build a

connection to our whenua.

• Te reo Māori courses are available for all team members. Hōkai Tahi – is

our beginners te reo and Hōkai Rua – intermediate. Sessions are held

online and in person at the Auckland Airport marae – Te Manukanuka

o Hoturoa, with a full pōwhiri welcome from kaumātua. Delivered by

external consultants, the 10-week course helps our team members to

improve their te reo Māori proficiency, learn key tikanga (customs) and

share their learning with fellow colleagues across the business.

• Our Employee Engagement Survey achieved a 90% response rate and a

representative sample of all views across all business units. This provides

reliable data indicating areas we must continue to work upon to improve

our employee experience.

• We are committed to supporting our people on their journey as

parents by providing them with an enhanced Parental Leave Policy that

offers both additional financial support beyond that prescribed by the

Government, as well as ensuring that the transition into parenthood, and

subsequently back into work, is as easy as possible.

• Mental Health awareness through our ‘Midday Mindfulness’ sessions is

available to all employees.

• Health offerings including free flu vaccinations for staff and discretionary

paid sick leave in relation to COVID-19 for all employees.

• We continue to encourage paid volunteer leave for all permanent

employees.

• A hybrid working policy for roles that permit is embedded with a strong

culture of trust around output.

Climate change mitigation and adaptation

We acknowledge that the aviation sector

contributes to climate change and are working

with our aviation partners to reduce this impact.

The effects of climate change, including rising

sea levels and unpredictable weather patterns

will impact our business, community, country

and the planet.

• The 2023 year brought with it several physical impacts of climate change

to Auckland Airport. In January, Auckland Airport (along with the rest

of Auckland) received a month’s worth of rainfall in a single day which

flooded the International Terminal Building. Two weeks later, high winds

from Cyclone Gabrielle resulted in the closure of the runway due to

unsafe working conditions for groundhandlers.

• Since the January 2023 event, we have undertaken further precinct-wide

modelling of flooding and inundation.

• We have brought forward investment into the stormwater network

and commenced the development of a stormwater masterplan which

identifies the necessary upgrades and development of infrastructure,

including new stormwater ponds.

• We continue to be signatories of the Climate Leaders Coalition,

committing to absolute carbon reduction as well as climate change

mitigation, adaptation and transition.

• We’re engaging with airlines to ensure the right ground infrastructure will

be in place to enable the adoption of future aircraft technologies and

fuels to support the decarbonisation of aviation.

Annual Report 2023 69

Material issueProgress in the 2023 financial year
Minimising our environmental footprint

As a large-scale business, we work hard to

reduce the impact our operations have on the

surrounding environment by implementing best-

practice environmental controls and ongoing

monitoring of our environmental performance.

In addition, we implement resource use efficiency

and waste minimisation measures. For new

infrastructure we draw on sustainable design

principles to guide our decision-making through

the planning, design and construction phases.

• We continued to progress our decarbonisation pathway for scope 1

and 2 emissions, as outlined on page 61 of this report.

• Our scope 3 emissions reporting has been expanded to improve

transparency of our emissions inventory, including full flight emissions.

• We introduced organic waste separation for food and beverage

operators in the terminals.

• Sustainability reporting requirements for carbon, waste and water use

have been integrated into construction contracts to improve oversight

of environmental performance during construction.

• We installed additional charging stations for ground servicing equipment

to support the conversion from diesel to electric on the airfield.

Community and tangata whenua involvement

Auckland Airport’s location is of historical and

cultural significance to Māori. Building strong

and enduring relationships with tangata whenua

is important to us. We also strive to be a good

neighbour and play an active part in creating

value for the whole community.

• We continued to work alongside local iwi on a monthly basis to share

information and identify opportunities for iwi involvement across

resource management processes, future airport operations and

precinct development.

• We also continued to work alongside local iwi on the design of projects

across the precinct, including the Transport Hub, terminal development

and Mānawa Bay.

• The Auckland Airport Job Fair was held to create employment

opportunities for local people and connect them to jobs.

• We supported community organisations through our community

volunteer programme for all employees.

• Provided financial and in-kind support to:

– Leukaemia & Blood Cancer New Zealand’s annual Firefighter

Stair Challenge.

– ASB Polyfest, a cultural and youth performance celebration.

– Life Education Trust Counties Manukau to support the maintenance

of their mobile classrooms.

– Ara Education Charitable Trust, providing staff volunteers and

land for their house renovation project with the Auckland Airport

Community Trust.

70 Annual Report 2023

Annual Report 2023 71

72 Annual Report 2023

Governance
Annual Report 2023 73

Risk Management
Risk management is an integral part of the

company’s business. Auckland Airport has

developed an enterprise risk management

framework, designed to promote a culture

which ensures a proactive and consistent

approach to identifying, mitigating and

managing risk on a company-wide basis.

Auckland Airport’s risk management policy provides clarity

on roles and responsibilities to minimise the impact of financial,

operational and sustainability risk on our business. Under this

policy, the Board is responsible for reviewing and ratifying the

risk management structure, processes and guidelines which

are developed, maintained and implemented by management.

The Board also sets the company’s risk appetite on an annual

basis and tracks the development of any existing risks and the

emergence of new risks to the company.

Auckland Airport’s risk management framework is underpinned

by two committees which are in place to identify and mitigate

potential financial and operational risks, the Audit and

Financial Risk Committee and the Safety and Operational Risk

Committee, respectively. The company also has mechanisms

in place to recognise and manage sustainability risks, including

environmental and social risks.

We have undertaken a robust risk assessment process

to identify and minimise the impact of significant risks on

our business. This process is continuous and is designed

to provide advanced warning of material risks before they

eventuate. The process includes:

• Significant risk identification

• Risk impact quantification

• Risk mitigation strategy development

• Reporting

• Compliance, monitoring and evaluation to ensure the

ongoing integrity of the risk management process

In light of the Auckland Airport’s ongoing commitment to

managing risks, the company established a new executive

leadership position, a Chief Safety and Risk Officer, to focus

on the identification, management and assurance of safety

and risk management.

Audit and financial risk

The Audit and Financial Risk Committee is responsible for

financial risk management oversight with a core function of

assisting the Board in performing its responsibilities, with

particular reference to financial risk management, financial

reporting and internal and external audit processes. The

Committee has direct communication with, and unrestricted

access to, the internal and external auditors. The Committee

meets with the internal and external auditors at least

twice annually.

The Audit and Financial Risk Committee is required to form

a view and make a recommendation to the Board each year

that the company’s interim and annual financial statements

are presented fairly, in all material respects, and in accordance

with the relevant accounting standards, which is founded on

a sound system of risk management and internal compliance

and control, which implements the policies adopted by the

Board, and that those controls are operating in all material

respects efficiently and effectively. In addition, the Audit and

Financial Risk Committee is responsible for reviewing and

recommending to the Board the approval of the company

annual Climate Change Disclosure and Greenhouse Gas

Emissions Inventory Report.

Safety and operational risk

Within our company strategy, Building a Better Future, we

are clear that the health, safety and wellbeing (HSW) of our

people, employees, contractors and stakeholders is our first

priority. We are committed to providing an environment where

people thrive. In FY23, we made significant progress in our

HSW journey by shifting away from Destination Zero Harm to

a People First strategy. In developing this strategy, there are

principles that guide us in determining what is important and

where we are heading.

These principles reflect the nature of HSW as something

that emerges from successful work and we are encouraged

to design programmes that empower people in delivering

successful outcomes – wherever they are.

People First – we build an inclusive and participative culture

where we place the health, safety and wellbeing of our people

first and at the centre of decision making.

We focus on improving work – we learn from what goes well,

not just what does not and we work with our people to build

greater adaptability and resilience to difficult or different tasks.

We make health, safety and wellbeing easy – wherever

possible, we don’t add health, safety and wellbeing tasks onto

the work being done but recognise that successful work will

be safe and focus on improving work and workplaces instead.

People are provided with the tools they need to do work well,

without the need for unnecessary paperwork, unworkable

rules, or compliance activity that does not add value.

The role of the Safety and Operational Risk Committee is

to support the Board in relation to health and safety risks,

performance and management includes specific responsibility

to review and monitor the application of the company’s

enterprise-wide processes for identifying and managing critical

and enterprise risks associated with:

• Occupational health, safety and wellbeing

• Public safety and operational risk

• Cybersecurity risks

• Sustainability risks including physical and transitional

climate change

• Enterprise risks (such as commercial operational risk,

modern slavery risk, community and reputational matters).

The Safety and Operational Risk Committee reviews the

performance of the company's safety management system,

including the safety policy statement on an annual basis

and provides guidance on the approach and targets for the

following year.

74 Annual Report 2023

a concern for the company. In addition to managing the risks
associated with sustainability, we are committed to external

disclosure and benchmarking, and report on a number of

sustainability performance indicators. Auckland Airport has a

sustainability policy which outlines the company’s commitment

to our sustainability strategy.

Auckland Airport recognises the role it has to play in

eradicating modern slavery. In the 2023 financial year, the

company has undertaken work to identify and assess the

risks of modern slavery in Auckland Airport’s supply chain and

has identified focus areas to enable the company to continue

to progress eradicating modern slavery. In the last year, the

company has strengthened our capability in this area by

procuring modern slavery software for supplier onboarding

and supply chain auditing.

The company will not tolerate any form of modern slavery

in our operations or supply chain and we are committed to

building a supply chain that is aligned with our approach.

Auckland Airport’s modern slavery policy and supplier code of

conduct confirms our commitment to operate in a responsible

and sustainable manner and our commitment to work with

suppliers that share this value. In December 2022, Auckland

Airport published its third modern slavery statement in

accordance with the Modern Slavery Act 2018 (Cth) Australia.

The impacts of climate change, including rising sea levels and

temperatures, and unpredictable weather patterns could have

negative effects on the infrastructure and property assets of

the company and is a key risk to our business. During the 2023

financial year, Auckland Airport undertook comprehensive

scenario analysis to further test the organisation’s resilience

to climate change. The results of the analysis, as well as

more detail on Auckland Airport’s climate-related risks and

opportunities, are outlined in our 2023 Climate Change

Disclosure Report which is aligned with the recommendations

of the Task Force on Climate-related Financial Disclosures

(TCFD) and the External Reporting Board (XRB) climate-related

disclosures standards.

Auckland Airport is approved by the Ministry of Primary

Industries (MPI) as a Place of First Arrival for international

arriving aircraft, people and cargo to New Zealand. Auckland

Airport’s kaitiakitanga is beyond compliance, and therefore

the company sees this MPI approval as a privilege, not a

right, and with this comes significant responsibility. Auckland

Airport’s biosecurity policy outlines our commitment to this

responsibility by proactively working with border agencies,

health agencies, airlines and tenants to collaboratively keep

New Zealand free of any new exotic pests and diseases.

Auckland Airport has had an acute focus on maintaining a

strong biosecurity awareness culture during the 2023 financial

year through tailored awareness and training programmes

delivered to our own employees, stakeholders and workers

based at the airport. These efforts in building a biosecurity

culture resulted in Auckland Airport being awarded the MPI

Biosecurity Award in October 2022.

As part of a continual review cycle and recognising the

paramount importance of managing critical risks, the

committee assesses and analyses the various critical risks

and activities involved in managing them. This approach

ensures that critical risks are proactively identified, evaluated,

and controlled in a manner that safeguards the health, safety

and wellbeing of employees, visitors and the overall business

operations. Previously, the method of evaluating critical risks

was completed through a bowtie process, however, in an

ongoing commitment to enhance risk control effectiveness,

a shift in approach occurred during FY23. The new process

has been adopted to further strengthen risk management

practices. Auckland Airport’s critical risks include categories

and subcategories across aircraft incidents, pedestrians vs

vehicles, high-risk work, asset failure, uncontrolled release

of energy, breach of security, chronic and acute impact

on health, and acts of nature. The continuous review and

evaluation of these critical risks enable the Safety and

Operational Risk Committee to stay at the forefront of risk

management practices.

The company has a Crisis Management Team (CMT), made

up of leadership team members and senior employees from

across the business which has an established governance

structure to manage fast-evolving risk situations in a robust

and practical way. The CMT is responsible for making

strategic, business response, emergency communications,

staff health and welfare, and government relations decisions.

In early 2023, the CMT was stood up in response to the

severe weather events. During the January 2023 weather

event the success of the CMT resulted in the reopening of the

domestic terminal within 14 hours and the reopening of the

international terminal within 36 hours. The CMT framework is

always reviewed following critical incidents to identify areas of

continuous improvement.

Auckland Airport’s business is also subject to other internal

and external audit and review, including in particular the

regular external audit by New Zealand’s Civil Aviation Authority

to ensure operational certification and verification of our Safety

Management System.

Sustainability (environmental and social) risk

Auckland Airport operates in a commercial environment

where there is always potential for economic, environmental

and social sustainability risks. The company recognises its

unique role in protecting the New Zealand natural environment

through its role at the border and the role that the visitor

economy plays in all areas of sustainability.

Auckland Airport has in place appropriate mechanisms and

controls to identify where these risks are material to the

company and to manage these as required. Sustainability is a

key responsibility of Auckland Airport’s Board and leadership

team. In identifying sustainability risks, the company assesses

common risks across the business to determine the likelihood

and severity of those risks and, subsequently, whether they are

Annual Report 2023 75

Corporate Governance
Auckland Airport’s Board is responsible for

the company’s corporate governance. The

Board is committed to undertaking this role

in accordance with internationally accepted

best practice appropriate to the company’s

business, as well as taking account of the

company’s listing on both the NZX and the

ASX (Foreign Exempt Listing Category).

The company’s corporate governance practices fully reflect

and satisfy the NZX Corporate Governance Code 2022

(NZX Code) and the Financial Markets Authority handbook

'Corporate Governance in New Zealand – Principles and

Guidelines' (FMA Handbook). The company also has regard

to the ASX Corporate Governance Council’s ‘Corporate

Governance Principles and Recommendations’ (4th Edition)

(ASX Principles) in designing its governance framework

and practices, given its Foreign Exempt Listing on the ASX.

Auckland Airport notes the amendments to the Corporate

Governance Code which took effect from 1 April 2023,

effective for companies with a financial year commencing

after April 2023. Auckland Airport has undertaken to comply

with the updated recommendation in this report and will

fully incorporate the updated recommendations in the 2024

financial year.

The Board confirms that in the year to 30 June 2023 the

company’s corporate governance practices complied

with the NZX Code recommendations. The company’s

constitution, charters and policies are available on the

corporate information section of the company’s website at

corporate.aucklandairport.co.nz.

Code of ethical behaviour

Ethics and code of conduct policy

Auckland Airport has always required the highest standards

of honesty and integrity from its directors and employees.

This commitment is reflected in the company’s ethics and

code of conduct policy, which clearly articulates the minimum

standards of ethical behaviour that all directors, employees,

contractors and consultants of the company are expected to

adhere to.

The ethics and code of conduct policy covers a range of areas

including the:

• Responsibility to act honestly and with personal integrity in

all actions

• Responsibilities to shareholders, including protection of

confidential information, restrictions on insider trading, rules

for making of public statements on behalf of the company,

accounting practices and cooperation with auditors

• Responsibilities to customers and suppliers of the

company, and other persons using the airport, including

rules regarding unacceptable payments and inducements,

treatment of third parties, non-discriminatory treatment and

tendering obligations

• Responsibilities to the community, including compliance

with statutory and regulatory obligations, use of assets and

resources and conflicts of interest.

The ethics and code of conduct policy also sets out

procedures to be followed for reporting any concerns

regarding breaches of the policy and review of its content

by the Board.

Securities trading policy

Auckland Airport also has a policy on share trading

by directors, officers and employees, which sets out a

fundamental prohibition on trading of the company’s securities

by any person with material information that is not generally

available to the market and the obligation of confidentiality in

dealing with any material information.

The policy applies to ordinary shares and debt securities

issued by the company, any other listed securities of the

company or its subsidiaries and any listed derivatives in

respect of such securities. Under the policy, there is also a

prohibition on directors and senior employees trading in the

company’s shares during any black-out period.

The company’s procedure for reporting and dealing with any

concerns in respect of the conduct of its directors, employees

and contractors is set out in its whistle-blower policy

consistent with the requirements of the Protected Disclosures

(Protection of Whistleblowers) Act 2022.

Board composition and performance

The Board’s charter recognises the respective roles of the

Board and management. The charter reflects the sound base

the Board has developed for providing strategic guidance

for the company and the effective oversight of management.

The Board’s primary governance roles are to:

• Work with company management to ensure that the

company’s strategic goals are clearly established and

communicated, that strategies are in place to achieve them

and to monitor performance in strategy implementation

• Approve and monitor the company’s financial statements

and other reporting, including reporting to shareholders,

and ensure that the company’s obligations of continuous

disclosure are met, and to approve the annual budget and

major investments

• Oversee the company’s commitment to the community,

environment and health and safety and to ensure there are

procedures and systems in place to safeguard the health

and safety of people working at, or visiting, the Auckland

Airport precinct

• Ensure that the company adheres to high ethical and

corporate behaviour standards and achieves a high level

of diversity

• Ensure that the company has appropriate risk management

and regulatory compliance policies in place to manage risks

and monitors the appropriateness and implementation of

those policies

• Approve remuneration policies via the People, Capability

and Iwi Committee.

The Board delegates the day-to-day operations of the

company to management under the control of the Chief

Executive. Day-to-day operations are required to be conducted

in accordance with strategies set by the Board. The Board’s

charter records this delegation and promotes clear lines of

communication between the chair and the Chief Executive.

76 Annual Report 2023

Holder) and is free of any interest which may materially interfere
with the exercise of independent judgement. The Board also

has regard to whether or not the director has been employed

by the company in an executive capacity, has been a material

supplier or customer of the company, or has been engaged to

provide material professional services to the company in the

last three years.

The Board considers that the roles of chair of the Board and

Chief Executive must be separate. The Board charter requires

that the chair of the Board is an independent, non-executive

director. As at the date of this annual report, the directors,

including the dates of their appointment and independence, are:

The Auckland Airport Board

The number of directors is determined by the Board, in

accordance with the company’s constitution, to ensure it is

large and diverse enough to provide a range of knowledge,

views and experience relevant to the company’s business.

The constitution requires there to be no more than eight and

no fewer than three directors.

The Board currently comprises eight directors, all of whom

are considered by the Board to be ‘independent’ directors.

In judging whether a director is ‘independent’, the Board has

regard to whether or not the director is a Substantial Product

Holder (or is an associated person to a Substantial Product

As at the date of this annual report, the directors, including the dates of their appointment and independence, are:

DirectorQualificationsGenderLocation

Date of

appointment

Te nu r e

(years)Independence

Patrick StrangeBE (Hons), PhD, Dist

CFinstD, Dist FEngNZ

MNZ22 October 20157Ye s

Mark BinnsLLBMNZ1 April 20184Ye s

Mark CairnsBE (Hons), BBS, MMGT,

FEngNZ, CFInstD

MNZ1 June 20221Ye s

Dean HamiltonBCA, CMInstDMNZ1 November 20184Ye s

Julia HoareBCom, FCA, CFInstDFNZ23 October 20175Ye s

Liz SavageBEng, MSc, MAICDFAUS23 October 20193Ye s

Tania SimpsonBA, MMM, CFInstDFNZ1 November 20184Ye s

Christine SpringBE, MSc Eng, MBA, CMInstDFNZ23 October 20148Ye s

Subject to the prior approval of the Chair of the Board, any director is entitled to obtain independent professional advice relating

to the affairs of the company or to the director’s responsibilities as a director, at the cost of the company.

From left: Directors – Tania Simpson, Liz Savage, Mark Cairns, Christine Spring, Patrick Strange, Julia Hoare, Mark Binns, Dean Hamilton, Sarah Kearney (future director)

Annual Report 2023

77

Future Director Programme
The Board is committed to supporting the next generation in

governance in New Zealand as part of the Future Director

Programme administered by the New Zealand Institute of

Directors. The Board appointed Sarah Kearney as a Future

Director in October 2022. The appointment of Sarah brings

additional experience to the AIAL Board with areas of high

competence in the Technology & Digital and Retail skills.

Board skills matrix

The Board seeks to ensure that it has an appropriate mix of

skills, experience and diversity to ensure it is well equipped to

navigate the range of issues faced by the company. The Board

reviews and evaluates on a regular basis the skill mix required

and identifies where gaps exist. A definition of categories

referred to below can be found on the company’s website at

corporate.aucklandairport.co.nz/governance.

• Annual pay equity reviews

• Ensuring people processes are equitable, inclusive and

supportive of our diverse workforce

• Partnering with the community and its members to share

their cultures, languages and capabilities

• Attracting and retaining diverse talent

• Having systems in place to enable employees to report

discrimination concerns

• Providing opportunities for employees to showcase

their unique talents and cultures, perspectives and

life experiences

Hōkai Tahi and Hōkai Rua | te reo Māori courses

We partner with Te Tari Consultants to deliver beginner

Hōkai Tahi and intermediate Hōkai Rua te reo Māori courses.

A second cohort of team members has completed their

10-week te reo Māori beginner and intermediate courses.

Feedback on the course continues to be positive with many

participants wanting to move on to complete the follow-up

intermediate course Hōkai Rua.

This year a hybrid approach has been adopted with some

sessions delivered on site at the Auckland Airport Marae

– Te Manukanuka o Hoturoa, including a formal pōwhiri

welcome by kaumātua.

Diversity

The company strongly values and supports diversity. However,

we continue to recognise that there is further work to be done

in this area, particularly in building our own diverse talent

pipeline. Auckland Airport strives for the company and its

leadership, management and employees to reflect the diverse

range of individuals and groups within our society, and this

is reflected in our sustainability strategy and our diversity

and inclusiveness policy which applies to all employees,

contractors and directors.

Auckland Airport is also a founding member of Champions

for Change, a group of businesses seeking to raise the

focus on diversity and inclusiveness in the New Zealand

business community.

The Board, with guidance from the People, Capability and

Iwi Committee, annually assesses the full set of objectives

contained in the diversity and inclusiveness policy and

measures the company’s progress towards achieving them.

Auckland Airport continues to make progress in delivering

its objectives, in particular in relation to:

• Visible leadership commitment to promote diversity and

lead diverse teams, including participating in the Leadership

Shadow exercise supported by Champions for Change

• Eliminating systemic bias

FY23FY22

MaleFemale% Female Age rangeMaleFemale% Female

Board4450.0%50 – 703550.0%

Leadership team4450.0%40 – 60533 7. 5 0 %

Senior leaders21184 6 .15%35 – 65171343.33%

All other employees3142183 7.7 %20 – 8026816239.67%

The table below shows the gender balance and age range of people who work at Auckland Airport

Financial

Regulatory

Listed Governance Experience

Construction and Development

Property / Retail

Capital Markets / Capital Structure

Climate Change / Sustainability

Iwi Relations

Aviation Economics and Operations

Technology & Digital

Executive Experience


High competence


Practical and direct experience


Some experience

012345678

The skills and experience of the directors are set out in the Board's current skills matrix below:

78 Annual Report 2023

Team member onboarding
Our new team member welcome morning, held at the

Te Manukanuka o Hoturoa marae continues with ongoing

positive response from new joiners. A review is underway to

develop the offering to include introductions with key leaders

and teams as well as the ever-popular airside tour.

The People, Capability and Iwi Committee of the Board

receives regular updates on diversity and inclusion activities

and an annual diversity and inclusion report from management

on diversity within the company. Auckland Airport continues

to make good progress in delivering its diversity and inclusion

objectives although it has several areas of focus to improve on.

Auckland Airport has an equal representation of women and

men on its Board with the chairs of three of its committees

being women.

Another of the company’s diversity objectives is attracting and

retaining a diverse workforce with 50 different nationalities

being represented across the organisation, including 10% of

people leaders identifying as Māori or Pasifika.

Nomination and appointment of directors

The Board has determined that it will not establish a separate

Nominations Committee, but will have the full Board undertake

this function. As such, the Board has responsibility for the

selection of new directors, the induction of directors and to

develop a succession plan for Board members. Appropriate

checks of any potential new director are undertaken before any

appointment or putting forward to shareholders for election.

The Board's policy is that directors shall not serve a term

of longer than nine years unless the Board considers that

any director serving longer than that period would be in the

best interests of shareholders and the Board. Each year,

any director who is required by the NZX Listing Rules or

the company’s constitution to retire, will retire from office

and may offer themselves for re-election at the Annual

Shareholders Meeting. Christine Spring is a director who

has reached a tenure of nine years with the Board. Christine

was re-elected as a shareholder at the 2022 Annual Meeting

and will continue with the Board to provide continuity on

airport infrastructure skills.

All directors enter into written agreements with the

company in the form of a letter that sets out the terms and

conditions of their appointment. A copy of the standard

form of this letter is available on the company’s website at

corporate.aucklandairport.co.nz/Governance. This letter

may be changed with the agreement of the Board.

Directors and officers insurance

In accordance with section 162 of the Companies Act 1993

and the constitution of the company, Auckland Airport has

continued to indemnify and insure its directors and officers

against liability to other parties (except to the company or a

related party to the company) that may arise from their position

as directors and officers. The insurance does not cover

liabilities arising from criminal actions.

Continuing development of directors

The Board is encouraged and provided with opportunities

to engage with employees from all levels of business without

executive management present. Board meetings include

either a safety walk, an engagement with a business unit of

the company or a tour of a particular construction project or

infrastructure asset. To ensure directors and management

remain current on how best to perform their duties, they are

also encouraged and provided with resources to continue the

development of their business skills and knowledge, including

attending relevant courses, conferences and briefings.

Directors have unfettered access to the company’s records

and information as required for the performance of their duties.

They also receive detailed information in Board papers to

facilitate decision-making. New Board members take part

in an induction programme to familiarise themselves with

the company’s business and facilities, and all directors have

access to the advice and services of the General Counsel for

the purposes of the Board’s affairs.

Review of the Board and director performance

The Board charter requires an annual review of the Board and

committee composition, structure and succession to ensure its

members are performing in line with their obligations and the

company’s values and strategy. The Board assesses its own

performance, and the chair of the Board continually monitors

the dynamic of the directors to ensure it is working optimally

at all times. A formal review is currently underway.

Board committees

The Board has set up various committees to enhance the

Board’s effectiveness in key areas, while still retaining overall

responsibility. Each committee has a charter which outlines

its objectives, structure and responsibilities. All committees

established by the Board must have a minimum of three

members, all members must be non-executive directors, and

the majority must be independent directors. The committees

are chaired by an independent chair, who must not be

the chair of the Board. The chair of the Board attends all

committee meetings ex-officio.

The Board has established the following standing committees.

Audit and Financial Risk Committee

Members: Julia Hoare (Chair), Mark Cairns, Dean Hamilton

The Audit and Financial Risk Committee is responsible

for financial risk management oversight. The committee

provides general assistance to the Board in performing its

responsibilities, with particular reference to financial risk

management, financial reporting and audit functions. It

includes specific responsibility to review the company’s

processes for identifying and managing financial risk and

financial reporting processes, systems of internal control

and the internal and external audit process.

Infrastructure Development Committee

Members: Mark Binns (Chair), Mark Cairns, Julia Hoare,

Christine Spring

The Infrastructure Development Committee is responsible for

assisting the Board in meeting its governance responsibilities

in relation to the company’s ongoing infrastructure

development. This committee provides general feedback

to the Board on the overall development programme,

procurement strategies, project planning and progress.

People, Capability and Iwi Committee

Members: Tania Simpson (Chair), Mark Binns, Liz Savage

The People, Capability and Iwi Committee ensures that the

company has sound remuneration policies and processes

in place and provides oversight for the company’s human

resource practices as well as oversight of the company’s iwi

relationships. This committee’s charter outlines the relative

weightings and remuneration components, performance

criteria and approach to reviewing iwi matters.

Annual Report 2023 79

Safety and Operational Risk Committee
Members: Liz Savage (Chair), Dean Hamilton, Tania Simpson,

Christine Spring

The Safety and Operational Risk Committee is responsible

for oversight of the company’s safety (including workplace

health, safety and wellbeing) and operational risk management

programme. The company reports to the Safety and

Operational Risk Committee on a number of safety and

operational matters including critical risk management,

significant incident or near misses, training and awareness

for the period, passenger injury rates, employee injury rates,

comparisons of contractor and employee injury rates, safety

observations conducted and the Security Performance,

Emergency Planning and Audit Programme.

The Aeronautical Pricing Committee has been established

by the Board as an ad-hoc committee.

Aeronautical Pricing Committee

Members: Dean Hamilton (Chair), Julia Hoare, Liz Savage,

Christine Spring,

The Aeronautical Pricing Committee was set up to assist the

Board with the development of the company’s aeronautical

pricing strategy. The committee is responsible for reviewing

and providing input into Auckland Airport’s aeronautical pricing

strategy and to make formal recommendations to the Board.

The table below outlines the number of meetings of the Board

and its committees held and details the attendance by each

director at the relevant Board and committee meetings for the

period 1 July 2022 to 30 June 2023.

Board

Audit and

Financial Risk

Committee

11

Aeronautical

Pricing

Committee

Infrastructure

Development

Committee

Safety and

Operational

Risk

Committee

People

Capability

and Iwi

Committee

Number of meetings

12

1556444

Patrick Strange 1556434

Mark Binns15143

Dean Hamilton15564

Julia Hoare15564

Elizabeth Savage151644

Tania Simpson 15144

Christine Spring 152

13

644

Mark Cairns1554

11. Full Board attendance is required annually at the Audit and Financial Risk Committee in August.

12. A joint Aeronautical Pricing Committee and Infrastructure Development Committee meeting was held on 9 November 2022 with the full Board in attendance.

13. Christine Spring retired as member of the Audit and Financial Risk Committee on 3 August 2022.

Takeover response manual

The Board has a takeover response manual which sets out the protocol to follow if there is an unsolicited takeover offer issued

to Auckland Airport. The takeover response manual requires implementation of a separate committee of the Board as well as an

Auckland Airport takeover response working group that would include key external advisors.

80 Annual Report 2023

Director disclosure
Directors’ holdings and disclosure of interests

Directors held interests in the following shares in the company as at 30 June 2023:

Patrick StrangeHeld personally

Held on behalf by other person

18,832

13,358

Mark BinnsHeld personally

Held jointly with other person

4,662

17, 4 3 2

Mark CairnsHeld on behalf by other person50,000

Dean HamiltonHeld personally6 , 574

Julia HoareHeld personally9,583

Liz SavageHeld Personally

Held on behalf by other person6,513

Tania SimpsonHeld personally6 , 574

Christine SpringHeld personally16,967

No directors held any interests in debt securities (including listed bonds) in the company as at 30 June 2023.

Disclosure of interests by directors

The following general disclosures of interests have been

made by the directors in terms of section 140(2) of the

Companies Act 1993, as at 30 June 2023:

Patrick Strange

Director, Mercury NZ Limited

Director, Transgrid Limited

(Australian company)

Mark Binns

Chair, Crown Infrastructure Partners Limited

Chair, Hynds Limited

Director, Te Puia Tapapa GP Limited

Trustee, Fletcher Building Retirement Plan

Mark Cairns

Chair, Freightways Limited

Director, Meridian Energy Limited

Dean Hamilton

Chair, Fulton Hogan Limited

Director, Ryman Healthcare Limited

Director, Tappenden Holdings Limited

Director, The Warehouse Group Limited

Julia Hoare

Deputy Chair, The a2 Milk Company Limited

14

Chair, Port of Tauranga Limited (and associated companies)

Director, Meridian Energy Limited

Director, Comvita Limited

Liz Savage

Director, Intrepid Group Limited

(Australian company)

Director, North Queensland Airports

(Australian group of companies)

Director, PeopleIn Limited

(Australian company)

Director, Tiger Holdco Pty Ltd

(Australian company)

Tania Simpson

Deputy Chair, Waitangi National Trust

Director, Tainui Group Holdings Limited

(and related company)

Director, Meridian Energy Limited

Director, Ukaipo Limited

Member, Waitangi Tribunal

Christine Spring

Chair, Isthmus Group Limited

Director, Western Sydney Airport Limited

(Australian company)

Director, NZ Windfarms Limited

14. Julia Hoare retired as Deputy Chair of The a2 Milk Company Limited on 30 June 2023.

Annual Report 2023 81

Reporting and disclosure
The company is committed to promoting investor confidence

by providing robust, timely, accurate, complete and equal

access to information in accordance with the NZX and ASX

Listing Rules. Auckland Airport has a written continuous

disclosure and communications policy designed to ensure

this occurs.

The General Counsel is the company’s market disclosure

officer and is responsible for monitoring the company’s

business to ensure compliance with its disclosure obligations.

Managers reporting to the Chief Executive and the Chief

Financial Officer are required to provide the General Counsel

with all relevant material information, to regularly confirm

that they have done so and made all reasonable enquiries

to ensure this has been achieved.

The leadership team is responsible for implementing

and maintaining appropriate accounting and financial

reporting principles, policies and internal controls to ensure

compliance with accounting standards and applicable laws

and regulations.

While the Board retains overall responsibility for financial

reporting, the company's external auditor, Deloitte, is

responsible for planning and carrying out each external

audit and review in line with applicable auditing and

review standards. Deloitte is accountable to shareholders

through the Audit and Financial Risk Committee and the

Board respectively.

Both financial and non-financial disclosures are made at

least annually, including material exposure to environmental,

economic and social sustainability risks and other key risks.

When these disclosures are made, the company explains how

it plans to manage those risks and how operational or non-

financial targets are measured.

Non-financial reporting

Auckland Airport discloses the impact of climate change

on the business and the impact of the business on climate

change by following the guidelines of the Taskforce on

Climate-related Financial Disclosures (TCFD) and the draft

Climate-Related Disclosure standards by the New Zealand

External Reporting Board (XRB).

The company’s emissions profile is disclosed in a stand-

alone greenhouse gas inventory report. Information within

the greenhouse gas inventory report is stated in accordance

with the requirements of the Greenhouse Gas Protocol: A

Corporate Accounting and Reporting Standard (2004). Deloitte

has provided third-party assurance across the information

stated in the greenhouse gas inventory report.

The company also reports to and is part of the Dow Jones

Sustainability Index, FTSE4Good and is a Participant Member

of GRESB (the Global ESO Benchmark for Real Assets).

The General Counsel is responsible for releasing any relevant

information to the market once it has been approved. The

release of financial information is approved by the Audit and

Financial Risk Committee, while information released on other

matters is approved by the Chief Executive.

Directors formally consider at each Board meeting whether

there is relevant material information that should be disclosed

to the market.

Auditors

External audit

The Audit and Financial Risk Committee is responsible for

ensuring that the quality and independence of the external

audit process and that the company's external financial

reporting are highly reliable and credible.

The company has an external auditor independence policy

which establishes a framework for its relationship with the

external auditor and includes guidelines on the extent of non-

audit services that can be carried out by an auditor, ongoing

review of independence and reporting that is required and the

tenure and reappointment of the external auditor. The external

audit function is performed by Deloitte.

The external auditor is invited to attend meetings when it is

considered appropriate by the committee. The company’s

external auditor also attends the annual meetings and is

available to answer questions relating to the audit.

Internal audit

The Audit and Financial Risk Committee has established a

formal internal audit function for the company. This function is

performed by Ernst & Young which undertook an international

benchmarking exercise comparing the company with similar

businesses to ensure that its internal audit programme

covers all material risks. Ernst & Young regularly reports on

its activities to the Audit and Financial Risk Committee.

82 Annual Report 2023

Shareholder and
Company Information

Shareholder rights and relations

The company’s communications framework and strategy are

designed to ensure that communications with shareholders

and all other stakeholders are managed effectively. It is

the company’s policy that external communications will be

accurate, verifiable, consistent and transparent to enable

shareholders to actively engage with Auckland Airport and

exercise their rights as a shareholder in an informed manner.

The head of strategy, planning and performance is the point

of contact for both analysts and shareholders and can be

reached at investors@aucklandairport.co.nz.

The company currently keeps shareholders, as well as

interested stakeholders, informed through:

• The corporate section of the company’s website

• The annual report

• The interim report

• The financial report

• The interim financial statements

• The annual meeting of shareholders

• Information provided to analysts during regular briefings

• Disclosure to the NZX and ASX in accordance with the

company’s continuous disclosure and communications

policy

• Media releases.

The Board considers the annual report to be an essential

opportunity for communicating with shareholders. The

company publishes all of its results and reports electronically

on the company website. Investors may also request a hard

copy of the annual report by contacting the company’s share

registrar, Link Market Services Limited.

Enquiries

Shareholders with enquiries about transactions, changes of

address or dividend payments should contact Link Market

Services Limited on +64 9 375 5998. Other questions should

be directed to the company’s company secretary at the

registered office.

Annual meeting of shareholders and voting

The company’s annual meetings provide an opportunity for

shareholders to raise questions for their Board and to make

comments about the company’s operations and performance.

The company’s annual meeting of shareholders will be held

on 17 October 2023 at 10:00 am at Eden Park, 42 Reimer

Avenue, Kingsland, Auckland, 1024.

All investors have the right to vote on major decisions that

might change the nature of the company and these decisions

are presented as resolutions at the company's annual meeting.

Each holder of ordinary shares is entitled to vote at any annual

meeting of shareholders. On a show of hands, each holder of

ordinary shares is entitled to one vote.

On a poll, one vote is counted for every ordinary share.

A person is not entitled to vote when disqualified by virtue

of the restrictions contained in the company’s constitution

and the ASX and NZX Listing Rules.

Share information

Stock exchange listings

The company’s shares were quoted on the NZX on 28 July

1998 and on the ASX effective 1 July 2002. On 22 April 2016

the company changed its admission category to an ASX

Foreign Exempt Listing. For the purpose of ASX Listing Rule

1.15.3, the company confirms that it has complied with the

NZX Listing Rules during the year ended 30 June 2023.

Limitations on the acquisition of the company’s securities

The company is incorporated in New Zealand. Therefore, it

is not subject to chapters 6, 6A, 6B and 6C of the Australian

Corporations Act 2001 dealing with the acquisition of shares

(such as substantial holdings and takeovers). Limitations on

acquisition of the securities are, however, imposed on the

company under New Zealand law by way of the New Zealand

Takeovers Code, the Overseas Investment Act 2005 and the

Commerce Act 1986. The company does not otherwise have

any additional restrictions.

Dividends

Shareholders may elect to have their dividends direct credited

to their bank accounts. From time to time, the company also

offers shareholders the opportunity to participate in a dividend

reinvestment plan. As at the date of this report, the dividend

reinvestment plan is operating. Further details are available at

corporate.aucklandairport.co.nz/investors/shares-and-bonds.

Earnings per share

Earnings in cents per ordinary share were 2.93 cents in 2023

compared with 13.02 cents in 2022.

Credit rating

As at 30 June 2023, Standard & Poor’s long-term credit rating

for the company was A- Stable Outlook.

Annual Report 2023 83

Distribution of ordinary shares and shareholders
The distribution of shareholdings as at 30 June 2023 is below:

Size of holding

Number of

shareholders%

Number of

shares%

1 – 1,00013,36226.615 ,7 74, 8790.39

1,001 – 5,00028,47556.715 9, 8 9 2,1734.07

5,001 – 10,0004,3888 .743 1, 3 8 7, 5 7 02.13

10,001 – 50,0003,5657.1067,963,9074.61

50,001 – 100,0002710.5418,168,5401.23

100,001 and over1520.541,289,633,8788 7. 5

Tota l50,036100%1,472,820,947100%

Substantial product holders

Pursuant to section 280 of the Financial Markets Conduct Act 2013, the following persons had given notice as at the balance date

of 30 June 2023 that they were substantial product holders in the company and held a ‘relevant interest’ in the number of ordinary

shares shown below:

Substantial product holderNumber of shares in which ‘relevant interest’ is heldDate of notice

Auckland Council266,328,9120 2 . 0 7.16

The total number of voting securities on issue as at 30 June 2023 was 1,472,820,947.

20 largest shareholders

The 20 largest shareholders of Auckland Airport as at 30 June 2023 are as follows:

ShareholdersNumber of shares% of capital

Auckland Council266,328,91218.08

HSBC Nominees (New Zealand) Limited

15

16 2,18 3 , 0 8711. 01

HSBC Nominees (New Zealand) Limited

15

148,210,61310.06

JP Morgan Chase Bank

15

89,826,2366 .10

JP Morgan Nominees Australia Limited66,054,5164.48

Citibank Nominees (NZ) Limited

15

63,948,3204.34

BNP Paribas Nominees NZ Limited Bpss40

15

6 0 , 5 6 7, 2 3 44 .11

Custodial Services Limited42,595,7052.89

BNP Paribas Nominees Pty Ltd42,16 0 ,12 32.86

HSBC Custody Nominees (Australia) Limited 36,902,9342.51

Accident Compensation Corporation

15

3 3 ,7 5 7, 5 4 32.29

Tea Custodians Limited

15

29,276,8091.99

New Zealand Superannuation Fund Nominees Limited

15

17, 9 9 1,7 9 81.22

Citicorp Nominees Pty Limited 15,295,5211.04

Premier Nominees Limited

15

14,589,2990.99

New Zealand Depository Nominee14,114, 9 0 40.96

BNP Paribas Nominees NZ Limited

15

12,639,5040.86

Public Trust

15

10,500,5890.71

Australian Foundation Investment Company Limited 10,299,8450.70

Public Trust

15

9,668,6550.66

Australian Foundation Investment Company Limited10,299,8450.70

National Nominees Limited

15

9,668,6550.66

15. These shares are held through New Zealand Central Securities Depository Limited (NZCSD), a depository system which allows electronic trading of securities to members.

84 Annual Report 2023

Company Information
The company was incorporated on 20 January 1988, under

the Companies Act 1955, and commenced trading on

1 April 1988. The company was registered in Australia as a

foreign company under the Corporations Law on 22 January

1999 (ARBN 085 819 156) and was re-registered under the

Companies Act 1993 on 6 June 1997. On 25 June 1998,

the company adopted a revised constitution, approved as

appropriate for a publicly listed company. Further revisions

of the constitution were adopted on 21 November 2000,

18 November 2002, 23 November 2004 and 30 June 2019

to comply with NZX and ASX Listing Rule requirements.

Regulatory environment

The company is regulated by, among other legislation, the

Airport Authorities Act 1966 and the Civil Aviation Act 1990

(both acts to be replaced by the new Civil Aviation Act which

comes into force 5 April 2025). The company is an "airport

company" for the purposes of the Airport Authorities Act 1966.

The company has consultation obligations under the Airport

Authorities Act 1966.

The company is required to comply with the Commerce

Act (Specified Airport Services Information Disclosure)

Determination 2010, with disclosure financial statements

required to be published in November each year.

Disciplinary action taken by NZX, ASX or the Financial

Markets Authority (FMA)

None of the NZX, the ASX or the FMA has taken any

disciplinary action against the company during the financial

year ending 30 June 2023.

Donations

In accordance with section 211(1)(h) of the Companies

Act 1993, Auckland Airport has during the year:

• Donated $70,000 to various charities including to Life

Education Trust Counties Manukau, Leukaemia & Blood

Cancer New Zealand and The Polyfest Trust

• Donated $20,000 to the Red Cross in relation to

Cyclone Gabrielle

• Granted $395,518 to the Auckland Airport Community

Trust. The Trust distributed these funds in the 2022

calendar year to residents and community groups living and

working in the Trust’s area of benefit

• Contributed $87,500 to the Ara Charitable Education

Tr ust

16

.

The company’s subsidiaries did not make any donations

during the year.

Entries recorded in the interests register

Except for disclosures made elsewhere in this annual report, there have been no entries in the interests register of the company

or its subsidiaries made during the year.

Subsidiary company directors

All subsidiary companies in the group are 100% owned by the company. Directors of the company’s subsidiaries do not receive

any remuneration or other benefits in respect of their appointments. The group structure and appointments as at 30 June 2023

are below:

Auckland Airport Limited Philip Neutze, Mark Thomson

Auckland Airport Holdings LimitedPhilip Neutze, Mary-Elizabeth Tuck

Auckland Airport Holdings (No. 2) Limited Philip Neutze, Mary-Elizabeth Tuck

Auckland Airport Holdings (No. 3) LimitedMary-Elizabeth Tuck

Ara Charitable Trustee LimitedMary-Elizabeth Tuck

16. Total donations in kind to Ara Charitable Education Trust is $400,000; this includes costs associated with rent and general maintenance costs.

Annual Report 2023 85

Remuneration
Auckland Airport is committed to

remuneration transparency. Accordingly,

the company provides shareholders with

detailed information about director and

employee remuneration.

Remuneration philosophy

The company’s remuneration philosophy is to ensure that:

• Staff are fairly and equitably remunerated relative to similar

companies and positions within the New Zealand market

• Staff are strongly motivated to deliver shareholder value

• The company is able to attract and retain high-

performing employees who will ensure the achievement

of business objectives.

• Auckland Airport pays a minimum living wage for all

permanent employees. We also provide a range of benefits

to our employees including health and life insurance to

eligible employees, enhanced parental leave provisions

and the opportunity to purchase company shares

at a discounted rate on an annual basis. Employees

who are eligible to participate in KiwiSaver receive a

company contribution of up to 3% of each employee’s

paid remuneration.

Performance, development and

annual remuneration review

All employees participate in regular performance and

development reviews, with end-of-year review outcomes

informing decisions regarding remuneration adjustments in

accordance with company policy. In addition, talent reviews

are conducted regularly throughout each year to identify those

employees with the potential to progress to more complex

and/or senior roles, with outputs informing the company’s

succession planning approach.

Auckland Airport’s philosophy is to set the mid-points of

fixed annual remuneration ranges at the market median

for employees who are fully competent in their roles. The

remuneration review process involves the consideration of

market information obtained from specialist advisors and, in

the case of employees employed under Collective Employment

Agreements, negotiations with unions.

Short-term incentives

Short-term incentives (STIs) are at-risk payments designed

to motivate and reward performance fairly in a financial year.

The short-term incentive includes a 50% individual component

target and a 50% company component target.

The individual component is based on the employee achieving

key performance targets relevant to their role. These targets

are agreed with the employee’s manager at the start of the

performance year or, in the case of the chief executive, agreed

with the Board. The individual component includes stretch

targets, as well as baseline objectives. Each participating

employee has clear measures in place to determine

achievement or non-achievement in any one year.

The company component is based on the company’s

achievement of both financial and non-financial targets set

by the Board over two agreed components, being Purpose

& People, Place, and Community. Each component carries

a 50% weighting. Each component has a clear measure

in place to determine achievement or non-achievement in

any one year and will vary from year to year based on the

organisation’s priorities.

For the financial year to 30 June 2023, the categories featured

under the company wide component were as follows:

• 50% Financial performance of the business;

• 50% on People – customer satisfaction, health, safety and

wellbeing lead indicators; risk control effectiveness’ and

public perception.

The short-term incentive target range and above-target

performance range for employees is set out in the table below.

Long-term incentive

Members of Auckland Airport’s leadership team and the

Chief Executive participate in the company’s long-term

incentive plan (LTI).

This scheme is a share-rights plan and share-rights are

granted to participating leadership team members with a

three-year vesting period. Share-rights, once vested and

exercised, entitle the participating leadership team members

to receive shares in Auckland Airport.

Each grant under the LTI plan has two tranches with different

performance hurdles:

• 50% of the grant is subject to the company achieving

absolute Total Shareholder Returns (TSR) against the

company’s cost of equity, plus 1%;

• 50% of the grant is subject to the company’s TSR

performance in relation to a specified peer group

(Dow Jones Brookfield Airports Infrastructure Index).

The Board retains discretion over the final outcome of the

LTI plan to allow appropriate adjustment where unanticipated

circumstances may impact performance over the three-

year period.

Refer Note 23(b) of the financial statements which provides

further details of the number of incentives granted, lapsed

and exercised.


Short-term incentive targetFor over-performance

Employee not on leadership team10% to 20% of base salaryUp to 24% of base salary

Leadership Team35% of base salaryUp to 49% of base salary

Chief Executive50% of base salaryUp to 70% of base salary

86 Annual Report 2023

FixedOn PlanMaximum
$0

$500

$1,000

$1,500

$2,000

$2,500

original

Chief executive remuneration

CE Remuneration summary

Financial

year

Chief

executiveSalaryBenefits

17

Fixed

remuneration

subtotal

STI

earnedLTISubtotal

Tot a l

remuneration

FY23Carrie

Hurihanganui$1,200,000 $ 5 6 ,16 6$1, 25 6 ,16 6 $669,000 $0

18

$669,000 $1, 9 25 ,16 6

FY22Carrie

Hurihanganui

19

$ 481,529$19,147$500,676$272,219

20

$0

21

$272,219$772,875

FY22Adrian

Littlewood

22

$598,561$43,291$641,852$329,938$351,836$ 6 81,7 74$1,323,626

FY21Adrian

Littlewood$1,279,307$ 8 6 ,12 0$1,365,427$835,843$315,594

23

$1,151,437$2,516,864

FY20Adrian

Littlewood$1,241,743$80,382$1, 3 2 2,125$0$ 461,757

24

$ 461,757$1,783,882

17. Includes a Kiwisaver contribution of 3%, insurance and other statutory benefits.

18. The Chief Executive participated in FY23 long-term incentive plan.

19. Carrie Hurihanganui, commenced her role in February 2022. The disclosure for the 2022 financial year relates to the remuneration paid between 8 February 2022

and 30 June 2022.

20. The FY22 STI will be payable in the 2023 financial year.

21. The Chief Executive received a pro-rata allocation under the FY22 long-term incentive plan.

22. Adrian Littlewood resigned from his role on 12 November 2021, the disclosure for the 2022 financial year relates to the remuneration paid between 1 July 2021

and 12 November 2021.

23. The FY21 long term incentive payment reflect the pre-tax value of the grant made in FY18.

24. The FY20 long-term incentive payment reflects the pre-tax value of the grant made in FY17.

Short-term incentives

The annual value of the short-term incentive scheme for the Chief Executive is set at 50% of their base salary (provided all

performance targets are achieved). If performance is unsatisfactory in a category, then no short-term incentive is payable for that

criterion. A maximum of 1.4 x the target is payable for outstanding performance by the Chief Executive.

The criteria used to measure the Chief Executive's individual performance is based on meeting certain targets focused on delivery

against financial performance, infrastructure programme, sustainability, PSE4 pricing consultation and culture.

The 50% company component of the Chief Executive’s FY23

STI Scheme had the following weighting:

CategoryWeighting

Purpose

Budgeted EBITDA

50%

People

Customer satisfaction, health, safety &

wellbeing lead indicators, risk control

effectiveness and public perception

50%

Long-term incentives

The Chief Executive participated (on a pro-rata basis) in the

Auckland Airport long-term incentive plan in the 2023 financial

year. As no Long Term Incentives were vested in the 2023

financial year, this is not reflected in the chart above.

Shares

The Chief Executive held 14,050 shares personally in the

company as at 30 June 2023.

Chief Executive’s remuneration performance pay

Base salary & benefits

Annual variable

LTI gra nte d

Annual Report 2023 87

Director remuneration
The directors’ remuneration is paid in the form of directors’

fees. Additional fees are paid to the chair of the Board and in

respect of work carried out by individual directors on various

Board committees to reflect the additional responsibilities of

these positions.

Review and approval

Each year, the People, Capability and Iwi Committee reviews

the level of directors’ remuneration. The committee considers

the skills, performance, experience and level of responsibility

of directors when undertaking the review and is authorised

to obtain independent advice on market conditions. After

taking independent external advice, the committee makes

recommendations to the Board on the appropriate allocation

of fees to directors, and shareholders approve a fee pool for

directors at the annual meeting.

Employee remuneration

Below is the number of employees or former employees of the company, excluding directors, who received remuneration and

other benefits (such as short-term incentive payments and KiwiSaver contributions) that totalled $100,000 or more during the

2023 financial year.

Amount of remunerationEmployees

$100,001 to $110,00031

$110,001 to $120,00028

$120,001 to $130,00036

$130,001 to $140,00032

$140,001 to $150,00037

$150,001 to $160,00022

$160,001 to $170,00017

$170,001 to $180,00018

$180,001 to $190,00017

$190,001 to $200,00010

$200,001 to $210,0005

$210,001 to $220,0008

$220,001 to $230,0005

$230,001 to $240,0005

$240,001 to $250,0003

$250,001 to $260,0003

$260,001 to $270,0001

Amount of remunerationEmployees

$270,001 to $280,0003

$290,001 to $300,0002

$310,001 to $320,0002

$330,001 to $340,0002

$350,001 to $360,0003

$370,001 to $380,0001

$380,001 to $390,0001

$400,001 to $410,0002

$430,001 to $440,0001

$480,001 to $490,0001

$510,001 to $520,0001

$620,001 to $630,0001

$660,001 to $670,0001

$720,001 to $730,0001

$730,001 to $740,0001

$760,001 to $770,0001

$1,520,001 to $1,530,0001

Directors’ share purchase plan

To align their incentives with shareholders, the directors have

decided that they each will use a minimum 15% of their base

fees to acquire shares in the company for an initial three-year

term. If, at the time of being onboarded as a director of the

company, or at the end of the initial three-year period, the

aggregate holding of shares in the company by the director is

equal to, or above, their base fees, the director may elect to

vary their contribution or opt out of the plan. Directors have

entered into a share purchase plan agreement and appointed

Jarden to be the manager of the plan. Jarden acquires the

shares required for the plan on behalf of directors after the

company’s half-year and full-year results announcements.

Directors remain in their share purchase plan until one year

after retirement from the Board.

2023 financial year

In light of the ongoing impact of COVID-19 on the company, at

the 2022 annual meeting the directors resolved to not seek any

change to the total directors’ fee pool of $1,593,350. The last

review of the director’s fee pool occurred in 2019. The

directors have resolved to not seek any change to the total

directors’ fee pool in 2023.

In the 2023 financial year, the directors received the following

remuneration for their governance of Auckland Airport.

88 Annual Report 2023

Remuneration received by directors by Board member
NameDirector’s fee (excluding expenses)

25

Patrick Strange$260,350

Mark Binns$164,650

Mark Cairns$162,850

Dean Hamilton$171,517

Julia Hoare$ 19 7, 3 17

Liz Savage$171,592

Tania Simpson$164,650

Christine Spring$165,542

25. The above director remuneration includes the 15% of the base fees payable after tax that are used to acquire shares in the company under the share purchase plan.

All directors contribute at the 15% level with the exceptions of Mark Binns and Mark Cairns who do not participate due to meeting the minimum shareholding requirements

and Elizabeth Savage who from 1 October 2020 has been contributing 20%.

Base fees of directors by position (from June 2023)

Chair

26

Member

Board$260,350$123,250

Aeronautical Pricing Committee (ad hoc) ––

Audit and Financial Risk Committee$51,6 0 0$25,800

Safety and Operational Risk Committee$ 2 7, 6 0 0$13,800

Development Committee$ 2 7, 6 0 0$13,800

People, Capability and Iwi Committee$ 2 7, 6 0 0$13,800

Ad hoc committee work (per day)–$2,700

26. The chair attends all subcommittee meetings of the Board as an ex-officio member. The chair does not receive committee meeting fees.

Annual Report 2023 89

Financial summary
The recovery in aviation activity has seen a significant

improvement in the financial performance of Auckland Airport.

With passenger movements up 183% on the prior year,

Auckland Airport has returned an underlying profit for the first

time since 2020.

Domestic passenger movements increased 90% on the

prior year, reaching 8.1 million and representing 84% of the

pre-COVID-19 equivalent. Similarly international passenger

movements increased significantly in the period, up 480%

on the prior year to 7.8 million movements and representing

67% of the pre-COVID-19 equivalent.

With the recovery in travel, total revenue for the year rose

108% to $625.9 million with improved performance across

all passenger driven lines of business. Aeronautical income

increased by 132% to $219.5 million, predominately as a

result of the substantial increase in higher value international

passengers. With the return of international passengers, retail

income increased significantly in the year to $130.9 million

as all of the stores in the international terminal reopened to

serve the travelling public. The combined effects of completed

property developments and rental growth in the existing

portfolio resulted in property rental income continuing to

increase, up 27% to $142.9 million in the year.

Operating expenses increased to $228.8 million in the year to

30 June 2023 reflecting the planned ramp up in activity and

headcount as the aviation recovery commenced. Despite the

higher operating costs, the benefits of economies of scale

resulted in EBITDAFI increasing to $397.1 million in the year to

30 June 2023 or 175%, up from $144.5 million in the prior year.

EBITDAFI margin increased from 48% in 2022 to 63% in 2023.

Reported profit after tax of $43.2 million in the 2023 financial

year was down on the prior year, mainly driven by a $139.7

million investment property revaluation loss. After excluding

investment property revaluation loss and other one-off and

unrealised items, the underlying result for the year was a profit

of $148.1 million, an improvement on the underlying loss of

$11.6 million in 2022.

Net capital expenditure of $647.1 million (gross: $650.9 million)

was spent in the year across the precinct comprising enabling

works associated with terminal integration, and also the

Transport Hub, commercial property developments and

Mānawa Bay capital investment.

The company’s balance sheet remains strong, with banking

facilities extended and credit metrics strengthening in the year.

Recognising Auckland Airport achieved an underlying profit

after tax for the first time since FY20, your Board has resolved

to pay a final dividend for the year of 4.0 cents per share.

The table on the next page shows the reconciliation between

reported profit after tax and underlying profit after tax for the

years ended 30 June 2023 and 2022.

2023

$M

2022

$MChange

Income 625.9 300.3 108%

Operating expenses 228.8 155.8 47%

Earnings before interest, taxation, depreciation, fair value adjustments

and investments in associate and joint ventures (EBITDAFI) 3 9 7.1 144.5 175%

Reported profit after tax 43.2 191.6 (77)%

Underlying profit after tax 148.1 (11.6 )1,377%

Earnings per share (cents) 2.9 13.0 (78)%

Underlying earnings per share (cents) 10 .1 (0.8)1,363%

Ordinary dividends for the full year

– cents per share 4.0 –n/a

– amount 58.9 –n/a

90 Annual Report 2023

We have made the following adjustments to show underlying
profit after tax for the years ended 30 June 2023 and 2022:

• we have reversed out the impact of revaluations of

investment property in 2023 and 2022. An investor

should monitor changes in investment property over

time as a measure of growing value. However, a change

in one particular year is too short to measure long-term

performance. Changes between years can be volatile

and, consequently, will impact comparisons. Finally, the

revaluation is unrealised and, therefore, is not considered

when determining dividends in accordance with the

dividend policy;

• consistent with the approach to revaluations of investment

property, we have also reversed out the revaluations of the

land and building class of assets within property, plant and

equipment in 2023 and 2022;

• we have reversed out the impact of capital expenditure

write-offs, impairments and termination cost expenses

and reversals in 2023 and 2022. These fixed asset

write-off costs, impairments and termination costs are

not considered to be an element of the group’s normal

business activities and on this basis have been excluded

from underlying profit;

• we have also reversed out the impact of derivative fair

value movements. These are unrealised and relate to basis

swaps that do not qualify for hedge accounting on foreign

exchange hedges, as well as any ineffective valuation

movements in other financial derivatives. The group holds

its derivatives to maturity, so any fair value movements

are expected to reverse out over their remaining lives.

Further information is included in note 18(b) of the financial

statements;

• in addition, we have adjusted the share of profit of

associates and joint ventures in both 2023 and 2022 to

reverse out the impacts on those profits from revaluations

of investment property and financial derivatives; and

• we have also reversed out the taxation impacts of the above

movements in both the 2023 and 2022 financial years.

20232022

Reported

profit

$M

Adjustments

$M

Underlying

profit

$M

Reported

profit

$M

Adjustments

$M

Underlying

profit

$M

EBITDAFI per Income Statement

27

3 9 7.1 –3 9 7.1 144.5 –144.5

Investment property fair value

change(139.7)139.7 –204.4 (204.4)–

Property, plant and equipment

fair value change(15.6)15.6 –(1.4)1.4 –

Fixed asset write-offs, impairments

and termination costs–2.8 2.8 –6.9 6.9

Derivative fair value change(0.7)0.7 –1.7 (1.7)–

Share of profit / (loss) of associate

and joint ventures11.1 (3.6)7. 5 (12.8)17. 2 4.4

Depreciation (145.3)–(145.3)(113 .1)–(113 .1)

Interest expense and other

finance costs (62.7)–(62.7)(53.7)–(53.7)

Taxation (expense) / benefit(1.0)(50.3)(51.3)22.0 (22.6)(0.6)

Profit / (loss) after tax43.2 104.9 148.1 191.6 (203.2)(11.6 )

27. 2023 EBITDAFI included fixed asset write-offs, impairments and termination costs of $3.8 million. 2022 included $6.9 million.

Annual Report 2023 91

Corporate Directory
Directors

Patrick Strange, Chair

Mark Binns

Mark Cairns

Dean Hamilton

Julia Hoare

Liz Savage

Tania Simpson

Christine Spring

Senior management

Carrie Hurihanganui, Chief Executive

Philip Neutze, Chief Financial Officer

Melanie Dooney, Chief Corporate Services Officer

André Lovatt, Chief Infrastructure Officer

Chloe Surridge, Chief Operations Officer

Scott Tasker, Chief Customer Officer

Mark Thomson, Chief Commercial Officer

Mary-Elizabeth Tuck, Chief Sustainability and

Masterplanning Officer

Richard Wilkinson, Chief Digital Officer (August 2023)

Darren Evans, Chief Safety and Risk Officer (November 2023)

Registered office New Zealand

4 Leonard Isitt Drive

Auckland Airport Business District

Manukau 2022

New Zealand

Phone: +64 9 275 0789

Freephone: 0800 Airport (0800 247 7678)

Facsimile: +64 9 275 4927

Email: tellus@aucklandairport.co.nz

Website: www.aucklandairport.co.nz

Registered office Australia

c/o KPMG

147 Collins Street

Melbourne

Victoria 3000

Australia

Phone: +61 3 9288 5555

Facsimile: +61 3 9288 6666

Website: www.kpmg.com.au

Share registrars

New Zealand

Link Market Services Limited

Level 30, PwC Tower

15 Customs Street West

Auckland 1010

PO Box 91976

Auckland 1142

Phone: +64 9 375 5998

Fax: +64 9 375 5900

Australia

Link Market Services Limited

Level 12, 680 George Street

Sydney

NSW 2000

Locked Bag A14

Sydney South

NSW 1235

Phone: +61 2 8280 7111

Fax: +61 2 9287 0303

Mailing address

Auckland International Airport Limited

PO Box 73020

Auckland Airport

Manukau 2150

New Zealand

General Counsel and Company Secretary

Ian Beaumont, Russell McVeagh

Auditors

External auditor – Deloitte

Internal auditor – Ernst & Young

Share registry auditor – Grant Thornton

This annual report is dated 24 August 2023 and

is signed on behalf of the Board by:

Patrick Strange

Chair of the Board

Julia Hoare

Director

92 Annual Report 2023

Annual Report 2023 93

---

2023 Financial Report
AKL

Building a

Better Future

Financial Statements
This annual report covers the performance of

Auckland International Airport Limited (Auckland

Airport) from 1 July 2022 to 30 June 2023. This

volume contains our audited financial statements.

Overview information and a summary of our

performance against financial and non-financial

targets for the 2023 financial year are obtained

in a separate volume, which may be accessed

at report.aucklandairport.co.nz.

1
Financial report 2023

Financial report 2023

Introduction

Following a year of strong aeronautical and commercial recovery, Auckland Airport is

pleased to present the financial results for the year to 30 June 2023.

With the full reopening of the country’s border, the 2023 financial year saw a strong

recovery in travel as people returned to the skies to visit friends, family, holiday and

travel for business. Coupled with this increase in travel, Auckland Airport saw a

recovery in the airport’s international network with 25 airlines connecting Auckland to

40 destinations around the globe during the 2023 financial year, up from 17 airlines

and 28 destinations in the prior year.  This provided greater choice for Kiwi travellers

and bolstered the recovery in our important tourism industry.

On 8 June 2023, Auckland Airport reset its aeronautical prices for the remainder

of the price setting event for the 2023 to 2027 financial years (PSE4). We are

committed to delivering much-needed investment in aeronautical infrastructure at

Auckland Airport and the price setting announcement set out our long-term roadmap

for upgrading New Zealand’s busiest gateway. The 10-year roadmap sets out

the regulated investment including the construction of a new domestic terminal,

investment in contingent runway operations to safeguard resilience, a new baggage

system to transform luggage handling, airfield upgrades, a new transport hub as well

as important investment in roading. This investment will allow us to continue to cater

for tourism and trade growth to New Zealand, improve the customer and passenger

experience and also deliver improved efficiencies.

With improved financial performance coming from the recovery in passenger

numbers and confidence around the future, Auckland Airport will resume the

payment of dividends to shareholders with the announcement of a final dividend

for the year ended 30 June 2023.

As travellers continue to return, we remain confident about the future.  We are

committed to delivering a new, connected national gateway that does justice to

Auckland, New Zealand and the expectations of our global visitors when they come

to Aotearoa New Zealand.  During this period of investment, we remain focused on

delivering excellent customer service and financial results.  Through an unwavering

focus customer service, while also investing for future needs, we will continue to

deliver strong results for our customers, our community, our country, our people and

our investors.

This financial report analyses our results for the 2023 financial year and its key trends.

It covers the following areas:

•2023 Financial performance;

•2023 Financial position; and

•2023 Returns for shareholders.

2
2023 Financial performance

This financial performance summary provides an overview of the financial results and

key trends for the year ended 30 June 2023 compared with those for the previous

financial year. Readers should refer to the following financial statements, notes, and

accounting policies for an understanding of the basis on which the financial results

are determined.

A summary of the financial results for the year to 30 June 2023 and the 2022

comparative is shown in the table below.

20232022

$M$MChange

Income625.9300.3108%

Operating expenses228.8155.847%

Earnings before interest, taxation, depreciation, fair value adjustments

and investments in associate and joint ventures (EBITDAFI)

397.1144.5175%

Reported profit after tax43.2191.6(77)%

Underlying profit after tax148.1(11.6)1,377%

Earnings per share (cents)2.913.0(78)%

Underlying earnings per share (cents)10.1(0.8)1,363%

Ordinary dividends for the full year

- cents per share4.0-n/a

- dollars58.9-n/a

In the 2023 financial year, revenue increased by 108% on the prior year

to $625.9 million reflecting the recovery in travel and ongoing investment

property development.

Aeronautical revenues increased 132% to $219.5 million reflecting the significant

increase in higher-value international passengers in the year.  The recovery in

international travel enabled a reopening of the stores in the international terminal

driving a 477% increase in Retail revenue to $130.9 million.

Carparking income rose 120% to $57.7 million, as the heightened traveller preference

for using own cars over public transport, taxis and ride share that arose during the

pandemic continued into the 2023 financial year. The two hotels located on the

precinct traded well in the year, with occupancy rising significantly during the year

and averaging 75% for the financial year. Property rental income delivered another

year of strong growth, up 32% in the period, reflecting a mix of newly completed

developments and rental growth from the existing portfolio.

Operating expenses rose 47% in the year to $228.8 million as the recovery in

aviation necessitated higher staff numbers and an increase in asset management,

maintenance and airport operations to service the recovery in aviation activity.

Earnings before interest, taxation, depreciation, fair value adjustments and

investments in associates (EBITDAFI) rose 175% to $397.1 million in the year as

economies of scale enabled EBITDAFI margin to increase to 63%, up from 48% in

the year to 30 June 2022.

Our reported profit after taxation for the 2023 financial year was down 77% to

$43.2 million, driven in part by a $139.7 million investment property revaluation loss.

After removing the impact of investment property and other revaluation movements

booked to the income statement, Auckland Airport reported an increase in underlying

profit after taxation to $148.1 million.

In June 2023, your Board revised Auckland Airport’s dividend policy to pay 70%

to 90% of underlying net profit after tax (excluding unrealised gains and losses

arising from a revaluation of property or treasury instruments and other one-off

items), noting that, in special circumstances, the directors may consider the payment

Auckland International Airport Limited

3
Financial report 2023

of ordinary dividends above or below this range, subject to the company’s cash

flow requirements, forecast credit metrics and outlook at the time.  Reflecting our

confidence in the ongoing recovery in travel, Auckland Airport has declared a final

dividend for the year to 30 June 2023 of 4.0 cents per share.  This is our first

dividend payment since payment of the final dividend for the 2019 financial year in

October 2019.

Underlying profit is how we measure our financial performance

The directors and management of Auckland Airport understand the importance

of reported profits meeting accounting standards. Because we comply with

accounting standards, investors know that comparisons can be made with

confidence between different companies and that there is integrity in our reporting

approach. However, we believe that an underlying profit measurement can also assist

investors to understand what is happening in a business such as Auckland Airport,

where revaluation changes can distort financial results, or where one-off transactions,

both positive and negative, can make it difficult to compare profits between years.

For several years, Auckland Airport has referred to underlying profit alongside

reported results. We do so when we report our results, but also when we give

market earnings guidance (where we exclude fair value changes and other one-off

items) or when we consider dividends. However, in referring to underlying profits, we

acknowledge our obligation to show investors how we have derived this result.

The table below shows the reconciliation between reported profit after tax and

underlying profit after tax for the years ended 30 June 2023 and 2022.

20232022

Reported

profit $M

Adjustments

$M

Underlying

profit $M

Reported

profit $M

Adjustments

$M

Underlying

profit $M

EBITDAFI per Income Statement

1

397.1-397.1144.5-144.5

Investment property fair value change(139.7)139.7-204.4(204.4)-

Property, plant and equipment fair

value change(15.6)15.6-(1.4)1.4-

Fixed asset write-offs, impairments and

termination costs-2.82.8-6.96.9

Derivative fair value change(0.7)0.7-1.7(1.7)-

Share of profit / (loss) of associate and

joint ventures11.1(3.6)7.5(12.8)17.24.4

Depreciation(145.3)-(145.3)(113.1)-(113.1)

Interest expense and other finance costs(62.7)-(62.7)(53.7)-(53.7)

Taxation (expense) / benefit(1.0)(50.3)(51.3)22.0(22.6)(0.6)

Profit / (loss) after tax43.2104.9148.1191.6(203.2)(11.6)

12023 EBITDAFI included fixed asset write-offs, impairments and termination costs of $3.8 million. 2022 included $6.9 million.

4
We have made the following adjustments to show underlying profit after tax for the

years ended 30 June 2023 and 2022:

•we have reversed out the impact of revaluations of investment property in 2023

and 2022. An investor should monitor changes in investment property over time

as a measure of growing value. However, a change in one particular year is too

short to measure long-term performance. Changes between years can be volatile

and, consequently, will impact comparisons. Finally, the revaluation is unrealised

and, therefore, is not considered when determining dividends in accordance with

the dividend policy;

•consistent with the approach to revaluations of investment property, we have

also reversed out the revaluations of the land, runways, taxi ways, aprons and

infrastructure classes of assets within property, plant and equipment in 2023 and

land and building classes of assets within property, plant and equipment in 2022;

•we have reversed out the impact of capital expenditure write-offs, impairments

and termination cost expenses and reversals in 2023 and 2022. These fixed asset

write-offs, impairments and termination costs are not considered to be an element

of the group’s normal business activities and on this basis have been excluded

from underlying profit;

•we have also reversed out the impact of derivative fair value movements. These

are unrealised and relate to basis swaps that do not qualify for hedge accounting

on foreign exchange hedges, as well as any ineffective valuation movements in

other financial derivatives. The group holds its derivatives to maturity, so any fair

value movements are expected to reverse out over their remaining lives. Further

information is included in note 18(b) of the financial statements;

•in addition, we have adjusted the share of profit of associates and joint ventures in

both 2023 and 2022 to reverse out the impacts on those profits from revaluations

of investment property and financial derivatives; and

•we have also reversed out the taxation impacts of the above movements in both

the 2023 and 2022 financial years.

2023 Financial performance CONTINUED

Auckland International Airport Limited

5
Financial report 2023

Revenue

In the 2023 financial year, revenue increased by 108% to $625.9 million with the

recovery in international travel driving higher revenue across all passenger-driven lines

of business. 

The table below summarises revenue by line of business for the financial year to

30 June 2023 and the prior period comparative.

20232022

$M$MChange

Operating revenue

Airfield landing charges75.646.563%

Aircraft parking charges11.014.4(24)%

Total airfield income86.660.942%

Passenger services charge132.933.8293%

Total aeronautical income219.594.7132%

Retail income130.922.7477%

Car park income57.726.2120%

Total retail and car park income188.648.9286%

Rental income - Property142.9112.927%

Rental income - Aeronautical26.716.067%

Rental income - Retail1.00.825%

Total rental income170.6129.732%

Rates recoveries12.78.648%

Interest income3.20.3967%

Flood related income5.0-

Other income26.318.145%

Total revenue625.9300.3108%

Airfield income

Airfield income comprises both airfield landing charges and aircraft parking charges.

Airfield landing charges are based on the MCTOW of aircraft.  Parking charges are

based on the MCTOW of aircraft and the period they are parked on the airfield.

Total airfield income increased by $25.7 million, or 42%, to $86.6 million with 144,421

aircraft movements, up 68% from the prior year reflecting the increase in air services

as a result of the removal of travel restrictions both in New Zealand and around

the world.

Total MCTOW across both international and domestic landings increased by 76% in

the year, driven by the strong recovery in international services which are typically

provided by larger aircraft compared to the smaller domestic equivalent.

6
20232022Change

Aircraft movements

International42,42318,315132%

Domestic101,99867,74851%

Total aircraft movements144,42186,06368%

MCTOW (tonnes)

International MCTOW4,043,7172,115,12891%

Domestic MCTOW2,028,2011,343,15051%

Total MCTOW6,071,9183,458,27876%

Cargo volume

Volume of international cargo movements (tonnes)165,503180,941(9)%

Airfield parking charges income was $11.0 million in the 2023 financial year, a

decrease of 24% on the prior year, driven by fewer aircraft being parked on the

airfield given increased aircraft movements.

Cargo

Cargo volumes transiting through Auckland Airport were down 9% in the year to

30 June, consistent with a global decline in air cargo driven by weaker factory activity

and a significant reduction in ocean shipping prices.

Passenger services charge

Passenger services charge (PSC) income increased by 293% to $132.9 million in the

2023 financial year as a result of increased passenger movements.

Passenger movements are a significant driver of value for Auckland Airport, with the

majority of aeronautical revenue coming from PSCs.

20232022Change

Total aircraft seat capacity

International aircraft seat capacity9,501,0032,385,277298%

Domestic aircraft seat capacity9,435,3826,014,79057%

Total seat capacity

Auckland Airport passenger movements

International arrivals3,635,079596,104510%

International departures3,539,392656,657439%

International passengers excluding transits7,174,4711,252,761473%

Transit passengers599,08488,114580%

Total international passengers7,773,5551,340,875480%

Domestic passengers8,087,7094,261,27190%

Total passenger movements15,861,2645,602,146183%

2023 Financial performance CONTINUED

Auckland International Airport Limited

7
Financial report 2023

Monthly passenger volumes

International (incl transits)

Domestic

0

10

20

30

40

50

60

70

80

90

100

110

FY20FY21FY22FY23

Jul-19

Sep -19

Nov-19

Jan-20

Mar-20

May-20

Jul-20

Sep-20

Nov-20

Jan-21

Mar-21

May-21

Jul-21

Sep-21

Nov-21

Jan-22

Mar-22

May-22

Jul-22

Sep-22

Nov-22

Jan-23

Mar-23

May-23

Monthly PAX as a % of FY19

International passenger movements

International passenger numbers, excluding transits, increased by 473% or

5.9 million passengers in the year to 30 June 2023, up to 7.2 million in the year and

recovering to 86% of the 2019 financial year pre-COVID equivalent by the end of the

year.  This was a very strong outcome versus the 1.3 million international passenger

movements seen in the year to 30 June 2022, a year that was still significantly

disrupted by a closure of the country’s border.

Our work to grow reconnect Auckland and with it, New Zealand to the world has

been very successful with the number of international airlines operating at Auckland

Airport growing from 17 in the 2022 financial year to 25 in 2023.  The increased

number of airlines has driven significantly higher capacity across all international

markets, with the number of international destinations available for travellers similarly

growing from 28 in the 2022 financial year to 40 in 2023 financial year.

With travel restrictions removed, it was pleasing to see New Zealanders once again

travelling to undertake business, go on holidays or reconnect with friends, family or

loved ones. This resulted in international arrivals by Kiwis who reside in New Zealand

being up 452% to 1,774,116.

The full reopening of the border also bolstered our tourism industry which brings

financial benefits to businesses across New Zealand. The additional services to the

United States helped deliver an increase in American visitor arrivals of 205,314 or

1396% and Australian visitors increased by 532,952 (353%). Arrivals from China

increased by 72,539 or 1203% following a welcome return of Chinese passengers

services late in the third quarter of the financial year.

8
The table below shows the top 20 volumes of passenger arrivals by country of last

permanent residence to Auckland Airport in the 2023 financial year.

Country of last permanent residence

International passenger arrivals

20232022Change

Share of total

2023 arrivals

Share of total

2022 arrivals

New Zealand1,774,116321,636452%49%54%

Australia684,129151,177353%19%25%

United States of America220,02614,7121,396%6%2%

United Kingdom130,98117,272658%4%3%

China, People's Republic of78,5696,0301,203%2%1%

India66,6106,434935%2%1%

Canada48,4844,476983%1%1%

Germany38,6892,0961,746%1%0%

Fiji33,4102,7151,131%1%0%

Korea, Republic of33,0722,1521,437%1%0%

Japan32,7821,8951,630%1%0%

Singapore28,5473,990615%1%1%

French Polynesia20,8241,0931,805%1%0%

South Africa19,6562,578662%1%0%

Taiwan19,2721,0891,670%1%0%

Malaysia19,1991,980870%1%0%

France18,7541,4421,201%1%0%

Samoa18,5055,877215%1%1%

Hong Kong (Special Administrative Region)16,3972,739499%0%0%

Tonga15,8341,528936%0%0%

Source: Statistics New Zealand

Visitor arrivals by purpose of visit

The most common purpose of international arrivals to New Zealand continued to be

holidays (17%) and visiting friends and relatives (20%).

Purpose of visit

20232022ChangeShare of total

Foreign residentsHoliday/vacation599,21725,9452,210%17%

Visit friends/relatives702,234134,021424%20%

Business/conference165,53623,735597%5%

Education/medical29,3442,0091,361%1%

Other (Incl. not stated/not captured)216,09140,630432%6%

New Zealand residents1,774,116321,636452%51%

Source: Statistics New Zealand

2023 Financial performance CONTINUED

Auckland International Airport Limited

9
Financial report 2023

Domestic passenger movements

Domestic passenger movements increased by 90% or 3.8 million passenger

movements in the year to 30 June 2023, recovering to 90% of the 2019 equivalent

by the end of the year.  This growth was delivered through increased passenger

movements on main trunk jet services which were up 88%.  Regional passenger

movements also grew, up 97% in the year.

Reflecting COVID-19 related airline capacity shortages, domestic load factors (and

air fares) remained elevated in the year, averaging 86% on services out of Auckland,

versus the pre-COVID equivalent of 84%. Load factors increased despite the higher

average fares seen throughout the year.

At 30 June 2023, domestic capacity remains 89% of the pre-COVID equivalent with

the number of aircraft operating in the domestic market, particularly the main trunk

routes, below their pre-COVID equivalent.

Aeronautical prices

In January 2022, Auckland Airport’s Board agreed to hold aeronautical charges for

the first year of Price Setting Event 4, being the financial year to 30 June 2023, flat

with prices in 2022.

On 8 June 2023, Auckland Airport announced its aeronautical charges for the

remaining four-year period of Price Setting Event 4 to 30 June 2027.  Following

holding aeronautical charges flat for the first year, charges are scheduled to rise in

each of the remaining years of the pricing period due to the combined effects of

recovering the $100 million-plus shortfall in aeronautical revenues earned in year one

due to the price freeze, higher target return than the previous pricing period, the

significant aeronautical capital investment to be delivered during PSE4 and the lower

total passenger numbers forecast for PSE4 than was forecast when PSE3 prices

were set.

2022 ($)2023 ($)

2023 price

change2024 ($)

2024 price

change %

International PSC

1

15.4915.490%21.2037%

Domestic PSC

1

3.103.100%5.0563%

Regional PSC

1

2.642.640%4.5372%

Transits PSC

1

6.246.240%21.20240%

1PSC charges applied to passengers two years and older.

The PSC for transit passengers will increase in the 2024 financial year to align

with that paid with international passengers, but the transits PSC will continue to

apply only to the inbound movement. This adjustment best reflects the usage of the

terminal infrastructure by transit passengers and is consistent with the transit charges

of other airports.

Retail income

Auckland Airport earns concession revenue from retailers within the Domestic and

International Terminals, including Duty Free, Speciality, Destination stores, Food and

Beverage outlets, Foreign Exchange and Advertising. In addition, retail income is

generated through off-airport duty and tax-free sales collected by passengers from

our International Terminal's collection points, Rental Car commission and Strata

Lounge income.

10
With the recovery in international travel, the retail precinct in the International

Terminal strongly reopened during the year.  With the international precinct open

for a significant portion of the year, retail income rose by $108.2 million in the

year to 30 June 2023 to $130.9 million. Auckland Airport’s total retail income per

passenger was $8.41 for the year, up 106% on the prior year. This reflects store

openings, increased trading hours, strong Rental Car performance, re-opening of the

Strata Lounge and an improved contribution from Auckland Airport’s online platform,

The Mall.

During the year Auckland Airport ran a competitive re-licencing process and

subsequently transitioned to a single Duty Free operator model at the International

Terminal.  In June 2023, Aelia Duty Free (owned by Lagardère Travel Retail SAS)

became the sole duty-free retailer operating at Auckland Airport, after successfully

winning an extension of its contract in December 2022 until mid-2025.  Initial trading

observations since the switch to a single operator has been positive with basket

sizes and average transaction values in line with pre-COVID equivalent. Income from

The Mall and Collection Point increased in the year reflecting an expanded product

offering and new luxury operators combined with strong passenger growth driving

higher spend during the year.

Car parking income

Car parking income in the 2023 financial year was $57.7 million, an increase of

$31.5 million or 120% on the prior year.

The increase in passenger travel resulted in strong income growth for all parking

products.  Total exits were up 140% in the period across all parking products.  The

largest increase was in Valet reflecting the competitiveness of Auckland Airport’s Valet

offering and the closure throughout the 2023 financial year of the closest car park to

the international terminal as construction of the Transport Hub progressed.

The average revenue per parking space increased by 135% on the prior year to

$5,761 reflecting greater use of higher value Valet product and parking proximate to

the terminals.  In addition, during the year we saw the average length of stay extend

as passengers travelled for longer duration than in the prior year.

Income from parking proximate to the Domestic and International Terminals

rose 115% on the prior year, with Domestic parking reaching 102% of the pre-

COVID equivalent, but international parking only reaching 60% owing to reduced

international parking spaces because of the Transport Hub development. The

recovery in travel, reduced parking close to the terminal and the provision of more

frequent bus services contributed to an increase in Park & Ride income, reaching

103% of the pre-COVID equivalent.

The table below outlines the number of car parking spaces available at 30 June 2023

and 30 June 2022.

Parking capacity as at 30 June20232022ChangeChange

Domestic Terminal3,1763,196(20)(1)%

International Terminal2,6382,600381%

Park and Ride1,4002,000(600)(30)%

Valet1,9951,995--

Staff3,1722,57260023%

Total12,38112,363180%

In June 2022, the main car park outside the International Terminal closed to allow

enabling works for the new Transport Hub to begin.  Work on the Transport hub

is progressing well with the new covered public pickup/drop-off facility expected to

open first half of calendar 2024, with the upper levels of parking to follow later that

year. The completion of the Transport Hub will add 2,100 car parks proximate to

the terminal precinct, a covered public drop off / pick up area, dedicated spaces for

Valet, buses, taxis and ride share services. 

2023 Financial performance CONTINUED

Auckland International Airport Limited

11
Financial report 2023

During the financial year, work began on a new Park & Ride facility located along

Puhinui Drive.  When completed, Park & Ride South will add 3,000 spaces for staff

and public use.

Until the reopening of the Transport Hub and Park & Ride South, Auckland Airport will

continue to optimise capacity, including upgrading customers to Valet to provide the

required capacity for staff and the travelling public.

Rental income

Auckland Airport earns rental income from space leased in facilities, such as

terminals, cargo buildings and from stand-alone investment properties. Total rental

income in the year to 30 June 2023 was $170.6 million, an increase of $40.9 million,

32% on the prior year.

Commercial Property

Commercial Property rental income, excluding aeronautical and retail rental income

was $142.9 million in 2023, an increase of $30.0 million, or 27%, on the prior

year. $8.4 million of revenue growth was related to revenue recognised earlier for

accounting purposes than actual cash receipts. This is because, for properties with

fixed future rental increases, the accounting rules require total revenues over the

entire lease period to be divided by the number of years of the lease in order

to recognise each year in the financial statements as the average annual rental

income.  A further $2.7 million reflected the completion of new property assets and

the full-year impact of developments completed during the previous financial year,

with a further $8.8 million due to net rental increases across the pre-existing portfolio

and the removal of $4.9 million of rental abatements that were offered to tenants in

2022 financial year.

Due to significant increases in construction costs and lower levels of vacancy and

available development land, market rental growth increased dramatically in FY23.

While future rental growth rates are expected to soften, significant rental growth is

still expected over the next few years as market review dates are reached on the

pre-existing portfolio.

Newly completed developments in the year included those for Healthcare Logistics

and Kerry Logistics. Rental income is expected to continue to grow through 2024

and beyond with nine investment property developments currently under construction

which are expected to add $40 million in annual rental income.

Rent roll, being the contractual rental income (excluding hotel income) from all

existing properties and those under development increased to $147 million in the

year, up 15% on the prior year.

The Commercial Property portfolio at 30 June 2023 is valued at $2.9 billion.

Hotels

Income from the ibis Budget Hotel increased compared to the previous financial year

reflecting the increase in demand as travel resumed.  Occupancy rates increased

steadily through the year as demand recovered and more rooms became available

for sale as labour shortages were resolved. The hotel also surpassed its average daily

rate record twice in the 2023 financial year.

The ibis continues to be one of the highest performing hotels in the country. Together

with the Novotel, the Auckland Airport hotel portfolio has established itself as its own

market which has been less affected by supply and demand shocks compared to the

wider Auckland hotel market.

Other rental income

With travel underway, airlines and rental car companies resumed operations in leased

areas of the terminals resulting in rental income of $27.7 million for the year, up from

$16.8 million in 2022.

12
Flood related income

In January 2023, Auckland Airport experienced flash flooding caused by record

breaking rainfall, particularly in the international terminal. Both terminals were closed

for short periods of time, with domestic

flights resuming at midday the following day

and international flights in the morning a day later. Auckland Airport has material

damage, business interruption and construction works insurance policies in place.

During the year ended 30 June 2023, Auckland Airport’s insurers agreed to an initial

payment of $5.0 million, which has been recognised as income.

Other income

Other income includes utilities, such as the sale of electricity, gas and water

reticulation, plus recoverable charges from tenants. Total income from these sources

was $26.3 million, an increase of $8.2 million, or 45%, on the previous financial year

as transport licence fees increased reflecting the strong recovery in passenger travel.

Expenses

Total expenses including depreciation, interest and taxation were $437.8 million in the

2023 financial year, an increase of $137.2 million, or 46%, on the prior year.

Operating expenses

With the recovery in travel, Auckland Airport prudently scaled up its operations during

the year to cater for the increase in activity and also incurred $8.4 million of flood

related operating expenses.

Total operating expenses (i.e. excluding depreciation, interest and taxation) were

$228.8 million in the 2023 financial year, an increase of $73.0 million, or 47%, on the

prior year.

20232022

$M$MChange

Operating expenses

Staff63.350.027%

Asset management, maintenance and airport operations89.866.735%

Rates and insurance31.821.051%

Marketing and promotions6.71.4379%

Professional services and levies8.24.391%

Fixed asset write-offs and termination costs4.86.9(30)%

Reversal of fixed asset impairment and termination costs(1.0)-

Flood related expense8.4-

Other19.26.1215%

Expected credit losses(2.4)(0.6)(300)%

Total operating expenses228.8155.847%

Depreciation145.3113.128%

Interest62.753.717%

Taxation1.0(22.0)105%

Total expenses437.8300.646%

Staff costs increased by a net $13.3 million, or 27%, in the year. This primarily reflects

increased headcount to scale up the business operationally for the ongoing recovery

in aviation activity, as the majority of increased staff costs in the infrastructure delivery

teams were capitalised to work in progress or commissioned assets during the year.

Total employees at Auckland Airport at 30 June 2023 were 579, up 24% on the 468

employees and 30 June 2022.

Asset management, maintenance and airport operation expenses increased by

$23.1 million, or 35% in the 2023 financial year. This increase similarly reflects a

2023 Financial performance CONTINUED

Auckland International Airport Limited

13
Financial report 2023

scaling up of activity-based costs such as outsourced operations including baggage

handling, bus services parking operations to service rapidly growing passenger

numbers. Repairs and maintenance activities increased as a result of higher activity

levels.  Following the recent purchase of previously Airways-owned airfield lighting,

Auckland Airport has begun a programme to upgrade and improve the reliability of

this system.  The purchase of these assets and a lift in asset maintenance across

the precinct has contributed to a $16.9 million increase in repairs and maintenance in

the year.

Rates and insurance expenses increased by $10.8 million, or 51%, in 2023 reflecting

higher council and insurance costs.

Marketing and promotional activity increased in the year as Auckland Airport

supported airlines to reconnect into Auckland and also supported our commercial

partners to reopen their operations to serve the travelling public. 

Fees for professional services increased by $3.9 million or 91%, to $8.2 million in the

2023 financial year, reflecting the additional consulting work required to support the

recovery of the business and secondly work associated with aeronautical pricing for

price setting event 4.

During the 2023 financial year, Auckland Airport wrote-off or impaired a net

$3.8 million of fixed assets associated with capital expenditure projects that have

now been assessed to be insufficiently certain to be able to deliver future benefit,

or where the scope of the capital works is expected to change, rendering certain

design expenditure obsolete. Examples include early design works for the long-term

Arrivals expansion project at the international terminal and future development of a

new regional terminal.

Flood related expenses of $8.4 million were suffered in the financial year in relation to

the January 2023 flooding event.

Other expenses increased by $13.1 million to $19.2 million in the 2023 financial year

reflecting a loss on the write down of decommissioned assets, increased software as

a service costs and higher operating expenses arising from increased hotel activity.

Depreciation

Depreciation expense in the 2023 financial year was $145.3 million, an increase of

$32.2 million, or 28%, on the previous financial year. This increase was driven by

the increase in the book value of assets as a result of revaluations in 2022, which

contributed to an additional $24.4 million in the year. The balance of the increase

reflected the combined effects of new assets commissioned in the year and the full

year effect of assets commissioned in prior years.

Interest

Gross interest expense increased in the 2023 financial year to $82.1 million, an

increase of $20.4 million, or 33%, on the prior year. This reflected the combined

effects of higher average debt levels as Auckland Airport continued its investment

programme, and the average cost of debt increasing to 5.03% in the year compared

to 4.32%.

The increased capital investment also drove an increase in capitalised interest which

rose by $11.4 million, or 143% to $19.4 million.

Net interest expense on the income statement increased $9.0 million (or 17%) on the

prior year to $62.7 million.

Taxation

Taxation expense was $1.0 million in the 2023 financial year, up from a $22.0 million

credit in the prior year. This change largely reflects the deferred tax impact of

revaluation movements of the non-land component of investment property and

financial derivatives. These fair value movements are excluded from underlying tax,

which resulted in an underlying tax expense of $51.3 million, $50.7 million higher

underlying tax expense of $0.6 million in 2022. Underlying tax also excludes the tax

effect of the reversal of fixed asset write-offs, impairments and termination costs.

14
2023 Financial performance CONTINUED

Share of profit from associates

Our total share of the profit from associates in the 2023 financial year was

$11.1 million, significant up on the $12.8 million share of loss of associates in the

2022 financial year. This profit comprised our share of the Tainui Auckland Airport

Hotel Limited Partnership (TAAH) profit of $4.5 million, Auckland Airport’s share of

Queenstown Airport’s profit of $5.6 million, and a revaluation gain from the Tainui

Auckland Airport Hotel 2 Limited Partnership (TAAH2) of $1.0 million.

On an underlying basis, these fair value adjustments are excluded and this resulted

in an underlying share of profit of associates of $7.5 million which comprised

$1.9 million from TAAH, $nil million from TAAH2 and $5.6 million from Queenstown

Airport. This was a $3.1 million increase on the $4.4 million profit in the 2022

financial year.

Queenstown Airport

Queenstown Airport's net profit after tax for the 2022 financial year increased

significantly to $22.7 million. Auckland Airport’s 24.99% share of Queenstown

Airport’s net profit after tax was $5.6 million, a $5.3 million increase on the

$0.3 million profit in the previous financial year.

20232022

$M$MChange

Financial performance

Total revenue59.626.8122%

EBITDAFI43.914.0214%

Total net profit after tax22.71.11,964%

Passenger performance

Domestic passenger volume1,633,4591,096,65549%

International passenger volume736,86137,8891,845%

Total passengers2,370,3201,134,544109%

Queenstown Airport's passenger volumes were up 109% in the 2023 financial year to

2.4 million with international passengers up significantly on the prior year due to the

full reopening of the country’s border during the financial year. Domestic passengers

were up by 49% on the prior year reflecting no domestic travel restrictions in 2023

that impacted travel in 2022.

In the 2023 financial year, Auckland Airport received a dividend from our investment

in Queenstown Airport of $1.8 million. On 17 August 2023, the directors of

Queenstown Airport declared a final dividend of $9.6 million for the year ended

30 June 2023. Auckland Airport’s share of the dividend is $2.4 million.

Tainui Auckland Airport Hotel Limited Partnership

Auckland Airport has a 50% investment in the Novotel hotel joint venture with Tainui

Group Holdings.

In July 2022, the Novotel hotel reopened to the public following being used

exclusively as a managed isolation facility since March 2020.  As part of its extensive

refurbishment following operating as a managed isolation facility, the Novotel donated

a range of surplus equipment to local charities to benefit the local community. 

Hotel occupancy improved significantly throughout the year from 27% at June 2022

to 90% at 30 June 2023, resulting in an average 71% for the twelve months to

30 June 2023.

In the 2023 financial year, Auckland Airport’s share of underlying profit from this

investment was $1.9 million, a decrease of $2.2 million compared with the previous

year. Auckland Airport's share of the joint venture's reported profit in the 2023

Auckland International Airport Limited

15
Financial report 2023

financial year was $4.5 million, which includes $2.7 million of property revaluation

gains and $0.1 million of derivative fair value loss.

Tainui Auckland Airport Hotel 2 Limited Partnership

Auckland Airport has a 50% investment in the Pullman Hotel joint venture with Tainui

Group Holdings Limited.

The partnership continued construction the 311 room five-star Te Arikinui Pullman

Auckland Airport Hotel during the year. The second and final phase of construction to

complete the remaining interior fit-out works of the hotel is nearing completion with

the hotel expected to open before the end of the 2023 calendar year.

Two of Auckland Airport’s senior management team members are directors on

the board of the partnership. No directors' fees are paid in relation to these

appointments, but the skills and experience of these directors are being utilised to

protect and grow Auckland Airport’s investment.

In the 2023 financial year, Auckland Airport’s share of net profit after tax from this

investment was $1.0 million.

Fair value changes

In the 2023 financial year, investment property fair value changes resulted in a loss in

the income statement of $139.7 million with the main driver of this fair value decrease

being an expansion in market capitalisation rates.

The land, runways, taxi ways, aprons and infrastructure classes within property, plant

and equipment was revalued as at 30 June 2023. These revaluations resulted in a

combined $203.0 million increase in the carrying value of this asset class, comprising

of a $15.6 million expense to reported profit (representing downwards revaluations in

excess of prior revaluation reserve balances for certain assets) and a $218.6 million

increase in revaluation reserve.

16
2023 Financial position

20232022

As at 30 June

$M$MChange

Non-current assets10,668.510,078.16%

Current assets160.874.8115%

Total assets10,829.310,152.97%

Non-current liabilities1,855.61,391.933%

Current liabilities596.2610.1(2)%

Equity8,377.58,150.93%

Total equity and liabilities10,829.310,152.97%

As at 30 June 2023, the book value of Auckland Airport's total assets was

$10,829.3 million, an increase of $676.4 million, or 8%, on the prior financial year.

The increase in total assets reflects the combined effects of the $647.1 million net

capital expenditure in the year and the $203.0 million revaluation gain relating to

the property, plant and equipment asset class, partially offset by the $139.7 million

investment property revaluation loss.

Shareholders’ equity as at 30 June 2023 increased by $226.6 million, or 5% higher

than that at 30 June 2022. The movement in equity largely reflects the upwards

revaluations of property and plant and equipment booked to non-current assets in

the 2023

financial year.

Gearing, measured as debt to debt plus the market value of shareholders’ equity,

increased to 18.2% as at 30 June 2023, from 15.6% as at 30 June 2022.

Capital expenditure

For the financial year to 30 June 2023, gross capital expenditure totalled

$650.9 million (before impairments), up 150% on the prior year reflecting a significant

increase in aeronautical, property and parking investment. Adjusting for $3.8 million

(2022: $6.9 million) of write-offs and impairments, net capital expenditure for the year

was $647.1 million.

Underpinning the significant increase in capital expenditure in the year was activity

on the Terminal Integration Programme, a multi-billion programme of works which

will deliver a new domestic jet terminal integrated with the existing international

terminal.  Prior to 2023 this programme of works has primarily been design focused,

however in 2023 elements of the programme have transitioned from design to

delivery activity resulting in a significant lift in investment.  Projects in this programme

with significant physical works in 2023 include the new Transport Hub and a new

Eastern Bag Hall.

Auckland Airport continued to invest in asset resilience and renewal initiatives in the

year including projects such as runway and apron pavement renewals as well as

upgrades to our

airfield lighting.

In addition to our aeronautical investment, property development has more than

doubled in 2023 driven by activity on a pipeline of preleased developments

negotiated in the prior year and the new Mānawa Bay shopping centre which are

all expected to open in calendar 2024.

Auckland International Airport Limited

17
Financial report 2023

The table below summarises capital expenditure in the year and the associated

key projects.

Category20232022Key 2023 projects

Gross

capex

Write-offs and

impairments

Net

capex

Net

capex

$M$M$M$MChange

Aeronautical329.2(3.8)325.4119.4173%

Activity in the year was dominated by design activity on

the new Domestic Terminal, delivery activity on key projects

within the Terminal Integration Programme such as the new

Eastern Bag Hall, Operations Control Centre, Baggage

Systems, terminal utility networks and airfield relocations

which enables the commencement of construction of the

new Domestic Terminal pier in 2024. In addition, activity

recommenced on an

airfield expansion project to north of

Pier B which will deliver additional aircraft stand capacity

which is required to offset a reduction in stand capacity

during construction of the new domestic processor. Aside

from Terminal Integration aeronautical investment in 2023

included

airfield slab and apron renewals, upgrades to the

existing airfield fuel network, airbridge refurbishments and

asset renewals in both terminals.

Infrastructure

and other

53.0-53.067.1(21)%

Activity in the year was dominated by investment

in upgrades to the roading network including the

development of Te Ara Korako Drive, a new east-west

link road between George Bolt Memorial Drive and Nixon

Road, upgrade to Lawrence Stevens Drive including High

Occupancy Vehicle lanes and the implementation of a

new

fibre network across the precinct to increase overall

network resilience. In addition, Auckland Airport continued

to invest in campus-wide utility infrastructure and core

operating, security and technology systems.

Property133.3-133.354.8143%

Activity in the year included continued construction activity

on the Mānawa Bay Outlet Centre and two existing

preleased developments that are forecast for completion

in 2024, completion of the preleased development at 6-8

Te Kapua Drive and an expansion of Kerry Logistics and

commencement of design and delivery activity on

four new preleased developments which are scheduled for

delivery across 2024 and 2025.

Retail0.3-0.30.4(25)%

Retail capital expenditure in 2023 included design activity

of the retail offering in the international arrivals hall and

which is scheduled for delivery in 2024.

Car parking135.0-135.011.41,084%

Activity in the year primarily related to the construction

works for the new multi storey Transport Hub, a key

project in the overall Terminal Integration programme as

additional pick up and drop off facilities and car parking

capacity will be required when domestic jet operations are

relocated to the new integrated terminal building. The first

stage of the Transport Hub is planned to open in 2024

and the full facility in the 2025 financial year. In addition,

delivery activity on Park & Ride South continued which

will increase overall parking capacity and is scheduled to

become operational in 2024.

Total

650.9(3.8)647.1253.1156%

Capital expenditure outlook for 2024

Capital investment for the year to 30 June 2024 is forecast to increase on the

2023 year as work continues on a range of strategic projects alongside the ongoing

investment in aeronautical upgrades, retail, transport and commercial property

projects.  In view of this investment right across the precinct capital expenditure for

the 2024 financial year is forecast to be between $1,000 million and $1,400 million.

18
Category

Forecast range

LowHigh

$M$M

Aeronautical560810

Infrastructure and other75140

Property development180220

Retail and car parking185230

Total capital expenditure1,0001,400

Aeronautical capital expenditure activity in the 2024 financial year will be primarily

focused on progressing enabling and construction activity on several initiatives that

form part of the terminal integration programme including the east bag hall at

the International Terminal and a new western truck dock. Upgrades to arrivals to

accommodate increased screening requirements are also planned to continue in

2024 alongside construction of the Transport Hub. In addition, airfield and terminal

renewal works will continue whilst in 2024 there will be a stronger focus on asset

renewals in the existing Domestic Terminal. 

Infrastructure and other projects in the 2024 financial year include commencing

delivery of upgrades to the eastern and southern roading networks, investment in

core utility networks, core IT infrastructure including a major upgrade to the campus

fibre network to ensure diversification and resilience of service, server upgrades and

investment in cyber security.

Property projects planned for 2024 include the completion of five preleased

warehouse developments, progressing the design and construction activity on two

pre-leased developments and the Mānawa Bay Outlet Centre, all of which are

planned to be completed in 2025. Aside from these developments, Auckland Airport

will continue to explore opportunities for new preleased developments.

Aside from the development of the Transport Hub, Auckland Airport plans to

complete development of the Park & Ride South project which will provide car

parking capacity and provide laydown and contractor parking facilities which

will be required for the large terminal integration works and other strategic

development projects.

2023 Financial position CONTINUED

Auckland International Airport Limited

19
Financial report 2023

Borrowings

As at 30 June 2023, Auckland Airport’s total borrowings were $1,817.1 million, an

increase of $340.5 million or 23% on the previous year. The increase in borrowings

reflects new borrowings during the year partially offset by decreases in the fair value

of existing debt owing to increases in market interest rates.

As at 30 June 2023, Auckland Airport’s borrowings comprised: AMTN notes totalling

$271.1 million; New Zealand fixed rate bonds totalling $889.2 million; New Zealand

floating rate bonds totalling $250.0 million; drawn bank facilities totalling $240 million;

and commercial paper totalling $166.8 million.

Short-term borrowings with a maturity of one year or less totalled $428.8 million as

at 30 June 2023 and comprised $166.8 million of commercial paper, $225 million of

New Zealand fixed rate bonds and $37 million of drawn bank facilities.

Borrowings by type

Borrowings by type

Commercial paper (9.1%)

Bank facilities (13.0%)

Floating bonds (13.6%)

Fixed bonds (48.8%)

AMTN (15.4%)

The AMTN borrowings were revalued downwards at year-end reflecting higher

interest rates. The AMTN debt carrying value decreased by $8.7 million over the

year. The interest rate movement was matched by equal and offsetting movements in

the fair value of the associated cross-currency interest rate swaps.

As at 30 June 2023, Auckland Airport had fixed rate bonds outstanding with a face

value of $900 million and floating rate notes of $250 million. A new $225 million fixed

rate bond, issued in November 2022, has a matching fair value interest rate swap

that converts the fixed interest payments to a floating rate exposure. The fair value

of this bond remained broadly consistent with issue pricing at 30 June.  However,

the $150 million fixed rate bond issued in November 2021 that is also matched

by a fair value interest rate swap was revalued down by a further $2.1 million in

the year to June 2023. As with the cross-currency swaps there was an equal and

opposite movement in the carrying value of the associated financial derivative. A

full breakdown of the maturities of these bonds is available in note 18(a) of the

Financial Statements.

As at 30 June 2023, Auckland Airport had total bank facilities of $1,203 million, of

which $240 million was drawn and $963 million was available in a standby capacity.

These drawn and undrawn facilities are held with all eight banking counterparties, a

full breakdown of which is available in note 18(d) of the financial statements.

20
The commercial paper programme had a balance of $166.8 million at 30 June

2023. As the commercial paper is supported by undrawn facilities which mature in

November 2026, they are included in the three-to-five year bracket for the purpose of

the following debt maturity profile chart as at 30 June 2023, matching the maturity of

the supporting bank facilities.

Debt maturity profile at 30 June 2023

Debt maturity profile at 30 June 2023

0100200300400500600700800900

> 5 Years

3 - 5 Years

1 - 3 Years

< 1 Year

Commercial paperBank facilitiesFloating bonds

$ millions

Fixed bondsAMTN

Auckland Airport manages its exposure to financial risk on a prudent basis. This is

achieved by spreading borrowings across various interest rate reset and maturity

dates, and entering into financial instruments, such as interest rate swaps, in

accordance with defined treasury policy parameters.

In the past year, Auckland Airport managed the impact of interest rate fluctuations

by maintaining a policy-mandated level of fixed-rate borrowings. Further details on

Auckland Airport’s financial risk management objectives and policies are set out in

note 18(d) of the financial statements.

Credit metrics and key lending covenantsTest20232022

Gearing≤ 60%18.2%15.6%

Interest Coverage≥ 2.0x6.57x2.58x

Debt to enterprise value12.7%12.3%

Net debt to enterprise value12.0%12.1%

Funds from operations interest cover≥ 2.5x5.0x2.6x

Funds from operations to net debt≥ 11.0%18.5%6.4%

Weighted average interest cost5.03%4.32%

Average debt term to maturity2.652.29

Percentage of fixed borrowings63.2%71.5%

Credit rating

As at 30 June 2023, Standard & Poor’s long-term credit rating of Auckland Airport

was ‘A- Stable’ and the short-term credit rating was 'A2'.

2023 Financial position CONTINUED

Auckland International Airport Limited

21
Financial report 2023

Cash flow

20232022

Cash flow summary$m$mChange

Net cash inflow from operating activities325.1101.2221%

Net cash outflow from investing activities(595.6)(283.2)(110)%

Net cash inflow / (outflow) from financing activities352.0127.2177%

Net increase (decrease) in cash held81.5(54.8)

249%

Net cash inflow from operating activities was $325.1 million in the 2023 financial year,

an increase of $223.9 million, or 221%, on the previous financial year. This reflected

increased business activity following the relaxation of travel restrictions.

Net cash outflow applied to investing activities was $595.6 million in the 2023

financial year, an increase of $312.4 million, or 110% on the prior year reflecting

increased capital expenditure on infrastructure and commercial property during

the year.

Net cash inflow from financing activities was $352.0 million in the 2023 financial year,

an increase of $224.8 million on the previous financial year. The inflow for the current

year was a result of additional borrowings undertaken in 2023, partially offset by a

repayment of maturing facilities.

22
2023 Returns for shareholders

Dividend policy

Auckland Airport suspended dividend payments in March 2020 as part of its COVID

response.  Following a return to profitability, in June of 2023 Auckland Airport

announced a revised dividend policy to pay between 70% to 90% of underlying

net

profit after tax (excluding unrealised gains and losses arising from a revaluation

of property or treasury instruments and other one-off items), noting that, in special

circumstances, the directors may consider the payment of ordinary dividends above

or below this range, subject to the company’s cash flow requirements, forecast credit

metrics and outlook at the time.

Auckland Airport has declared a final dividend for the year to 30 June 2023 of 4.0

cents per share.  The table below summarises the dividends paid to shareholders

over the five-year period to 30 June 2023.

Distribution history

2019

2020

2021

2022

2023

Nil

Nil

Nil

Interim

Final

cents per share

051015202530

Share price performance and total shareholder returns

Auckland Airport’s share price at 30 June 2023 was $8.55, a 19% increase on the

$7.18 share price at 30 June 2022.

Average annual shareholder return over the five-year period to 30 June 2023

was 5.4%.

Five-year compound average total shareholder return

Share price

opening

Share price

closing

DividendsTotal returnAverage annual

shareholder

return

$$$$

1 July 2018 to 30 June 20236.788.550.26252.03255.4%

Other key performance indicators

In addition to the performance metrics mentioned earlier in this Financial

Commentary, Auckland Airport also monitors a range of other non-financial

performance measures.  One of these areas relates to service quality and the second

environmental measures.

Airport service quality

Auckland Airport undertakes a quarterly survey of airport service quality (ASQ) and

benchmarks its performance against a range of airports that travellers can connect to

from Auckland Airport.

The most recent results are summarised in the table below. The increased variety of

shops and restaurants available in the International Terminal as well as increased

satisfaction with wireless connectivity helped the ASQ score in the international

terminal increase to 4.13 from 3.93 in the prior year. However, ASQ In the domestic

Auckland International Airport Limited

23
Financial report 2023

terminal fell slightly to 3.89 from 4.03 in 2022 driven by a decline in satisfaction

with cleanliness in the terminal.  Recognising this, changes were made to cleaning

processes that resulted in promising improvement in the domestic terminal ASQ in

the second half of the year.

Year ended 30 June20232022Change

International4.133.935%

Domestic3.894.03(3)%

Environmental

Auckland Airport was one of New Zealand’s early adopters of sustainability principles

and has made considerable progress in the areas of emissions reductions, energy

savings and waste management. 

Auckland Airport acknowledges the impact the aviation industry has on the

environment and we are seeking to reduce our impact, and also that of our industry

partners on the environment. We are tracking our progress in reducing our impact

on the environment against the 2019 baseline, with the table below summarising our

carbon emissions, water usage and waste generated by our operations.

Year ended 30 June20232019

baselineChange

Scope 1 and 2 carbon emissions (tCO2e)4,2915,895(27)%

Water usage (m3)268,622375,968(29)%

Waste landfill (tonnes)2,3922,462(3)%

This year, our scope 1 and 2 emissions have decreased as we make progress

against our decarbonisation pathway. Natural gas use has decreased with the

introduction of our first electric heat pump which has reduced the need for gas

boilers to operate at full capacity.

With the recovery in travel, passenger numbers have increased significantly resulting

in higher water usage and waste being generated from passenger activity. Water

usage increased in the year to 30 June 2023 by 74% to 268,622m3 and waste

to landfill increasing to 2,392 tonnes, up from 722 tonnes in the year to 30 June

2022. The increased construction activity was a significant contributor to the larger

increase in waste to landfill. We have introduced a dedicated role focused on waste

minimisation to ensure the trend of growth in waste does not continue.

24
Financial statements

FOR THE YEAR ENDED 30 JUNE 2023

Auckland International Airport Limited

25
Financial statements

Consolidated income statement

FOR THE YEAR ENDED 30 JUNE 2023

20232022

Notes$M$M

Income

Airfield income86.660.9

Passenger services charge132.933.8

Retail income130.922.7

Rental income170.6129.7

Rates recoveries12.78.6

Car park income57.726.2

Interest income3.20.3

Flood-related income3(f)5.0-

Other income26.318.1

Total income

625.9300.3

Expenses

Staff563.350.0

Asset management, maintenance and airport operations89.866.7

Rates and insurance31.821.0

Marketing and promotions6.71.4

Professional services and levies8.24.3

Fixed asset write-offs, impairment and termination costs54.86.9

Reversal of fixed asset impairment and termination costs5(1.0)-

Flood-related expense3(f)8.4-

Other expenses19.26.1

Expected credit losses/(release)(2.4)(0.6)

Total expenses

228.8155.8

Earnings before interest expense, taxation, depreciation, fair value adjustments and

investments in associate and joint ventures (EBITDAFI)

1

397.1144.5

Investment property fair value change12(139.7)204.4

Property, plant and equipment fair value change11(a)(15.6)(1.4)

Derivative fair value change18(b)(0.7)1.7

Share of profit/(loss) of associate and joint ventures811.1(12.8)

Earnings before interest, taxation and depreciation (EBITDA)

1

252.2336.4

Depreciation11(a)145.3113.1

Earnings before interest and taxation (EBIT)

1

106.9223.3

Interest expense and other finance costs562.753.7

Profit before taxation

44.2169.6

Taxation expense/(benefit)7(a)1.0(22.0)

Profit after taxation attributable to the owners of the parent

43.2191.6

CentsCents

Earnings per share

Basic earnings per share102.9313.02

Diluted earnings per share102.9313.01

1EBITDAFI, EBITDA and EBIT are non-GAAP measures. Refer to note 3(e) for more information.

The notes and accounting policies on pages 31-80 form part of, and are to be read in conjunction with, these financial statements.

26
Consolidated statement of comprehensive income

FOR THE YEAR ENDED 30 JUNE 2023

20232022

Notes$M$M

Profit for the year

43.2191.6

Other comprehensive income

Items that will not be reclassified to the income statement

Flood related fixed asset impairments3(f)(21.0)-

Net property, plant and equipment revaluation movement11(a), 16(b)218.675.8

Tax on the property, plant and equipment revaluation reserve16(b)(40.4)(128.5)

Movement in share of reserves of associate and joint ventures8,16(f)11.213.9

Items that will not be reclassified to the income statement

168.4(38.8)

Items that may be reclassified subsequently to the income statement:

Cash flow hedges

Fair value losses/(gains) recognised in the cash flow hedge reserve16(d)19.185.5

Realised gains transferred to the income statement16(d)0.29.1

Tax effect of movements in the cash flow hedge reserve16(d)(5.4)(26.5)

Total cash flow hedge movement13.968.1

Movement in cost of hedging reserve16(e)-(0.8)

Tax effect of movement in cost of hedging reserve16(e)-0.2

Items that may be reclassified subsequently to the income statement

13.967.5

Total other comprehensive income

182.328.7

Total comprehensive income for the year,

net of tax attributable to the owners of the parent

225.5220.3

The notes and accounting policies on pages 31-80 form part of, and are to be read in conjunction with, these financial statements.

Auckland International Airport Limited

27
Financial statements

Consolidated statement of changes in equity

FOR THE YEAR ENDED 30 JUNE 2023

Issued

and

paid-up

capital

Cancelled

share

reserve

Property,

plant

and

equipment

revaluation

reserve

Share-

based

payments

reserve

Cash

flow

hedge

reserve

Cost of

hedging

reserve

Share of

reserves

of

associate

and joint

ventures

Retained

earningsTotal

Notes$M$M$M$M$M$M$M$M$M

For the year ended 30 June 2023

At 1 July 2022

1,680.2(609.2)5,040.22.117.7(1.7)50.91,970.78,150.9

Profit for the year-------43.243.2

Other comprehensive

income--157.2-13.9-11.2-182.3

Total

comprehensive

income

--157.2-13.9-11.243.2225.5

Reclassification to

retained earnings

16(b),

16(c)--(10.1)(0.6)---10.7-

Shares issued150.6-------0.6

Long-term

incentive plan16(c)---0.5----0.5

At 30 June 2023

1,680.8(609.2)5,187.32.031.6(1.7)62.12,024.68,377.5

For the year ended 30 June 2022

At 1 July 2021

1,679.2(609.2)5,099.92.0(50.4)(1.1)37.01,772.17,929.5

Profit for the year-------191.6191.6

Other comprehensive

income--(52.7)-68.1(0.6)13.9-28.7

Total

comprehensive

income

--(52.7)-68.1(0.6)13.9191.6220.3

Reclassification to

retained earnings

16(b),

16(c)--(7.0)----7.0-

Shares issued151.0-------1.0

Long-term

incentive plan16(c)---0.1----0.1

At 30 June 2022

1,680.2(609.2)5,040.22.117.7(1.7)50.91,970.78,150.9

The notes and accounting policies on pages 31-80 form part of, and are to be read in conjunction with, these financial statements.

28
Consolidated statement of financial position

AS AT 30 JUNE 2023

20232022

Notes$M$M

Non-current assets

Property, plant and equipment11(a)7,548.36,986.1

Investment properties122,882.12,897.4

Investment in associate and joint ventures8193.1166.5

Derivative financial instruments1845.028.1

10,668.510,078.1

Current assets

Cash and cash equivalents13106.224.7

Trade and other receivables1451.628.5

Taxation receivable1.421.6

Derivative financial instruments181.6-

160.874.8

Total assets

10,829.310,152.9

The notes and accounting policies on pages 31-80 form part of, and are to be read in conjunction with, these financial statements.

Auckland International Airport Limited

29
Financial statements

20232022

Notes$M$M

Shareholders’ equity

Issued and paid-up capital151,680.81,680.2

Reserves164,672.14,500.0

Retained earnings2,024.61,970.7

8,377.58,150.9

Non-current liabilities

Term borrowings18(a)1,388.3961.0

Derivative financial instruments1825.315.7

Deferred tax liability7(c)438.5411.9

Other term liabilities3.53.3

1,855.61,391.9

Current liabilities

Accounts payable and accruals17159.987.1

Derivative financial instruments18-0.9

Short-term borrowings18(a)428.8515.6

Provisions217.56.5

596.2610.1

Total equity and liabilities

10,829.310,152.9

These financial statements were approved and adopted by the Board on 23 August 2023.

Signed on behalf of the Board by

Patrick Strange

Director, Chair of the Board

Julia Hoare

Director, Chair of the Audit and Financial Risk Committee

The notes and accounting policies on pages 31-80 form part of, and are to be read in conjunction with, these financial statements.

30
Consolidated cash flow statement

FOR THE YEAR ENDED 30 JUNE 2023

20232022

Notes$M$M

Cash flow from operating activities

Cash was provided from:

Receipts from customers593.3287.0

Interest received3.20.3

596.5287.3

Cash was applied to:

Payments to suppliers and employees(213.5)(134.6)

Income tax paid/(received)--

Interest paid(57.9)(51.5)

(271.4)(186.1)

Net cash flow from operating activities

6325.1101.2

Cash flow from investing activities

Cash was provided from:

Proceeds from sale of property, plant and equipment-0.4

Dividends received from associate and joint ventures81.83.0

1.83.4

Cash was applied to:

Property, plant and equipment additions(465.1)(224.8)

Interest paid – capitalised11(a), 12(19.4)(8.0)

Investment property additions(106.8)(39.8)

Investment in joint ventures8(6.1)(14.0)

(597.4)(286.6)

Net cash flow applied to investing activities

(595.6)(283.2)

Cash flow from financing activities

Cash was provided from:

Increase in borrowings18(a)753.0200.6

Settlement of cross-currency interest rate swaps-(1.4)

753.0199.2

Cash was applied to:

Decrease in borrowings18(a)(401.0)(72.0)

(401.0)(72.0)

Net cash flow applied to financing activities

352.0127.2

Net (decrease)/increase in cash held81.5(54.8)

Opening cash brought forward24.779.5

Ending cash carried forward

13106.224.7

The notes and accounting policies on pages 31-80 form part of, and are to be read in conjunction with, these financial statements.

Auckland International Airport Limited

Notes and accounting
policies

FOR THE YEAR ENDED 30 JUNE 2023

31

Financial statements

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

32

1. Corporate information

Auckland International Airport Limited (the company or

Auckland Airport) is a company established under the Auckland

Airport Act 1987 and was incorporated on 20 January

1988 under the Companies Act 1955. The original assets

of Auckland Airport were vested in the company on 1 April

1988 and 13 November 1988 by an Order in Council of the

New Zealand Government. The company commenced trading

on 1 April 1988. The company was re-registered under the

Companies Act 1993 on 6 June 1997. The company is an FMC

reporting entity under Part 7 of the Financial Markets Conduct

Act 2013.

The financial statements presented are for Auckland Airport and

its wholly owned subsidiaries, associate and joint ventures (the

group). There are five active subsidiaries in the group. Auckland

Airport Limited holds the group’s investment in Queenstown

Airport in New Zealand. Auckland Airport Holdings (No. 2)

Limited holds the group’s investment in the Tainui Auckland

Airport Hotel Limited Partnership, which operates the Novotel

hotel at Auckland Airport and the Tainui Auckland Airport Hotel

2 Limited Partnership, which is constructing a new Pullman

hotel at Auckland Airport.

A third subsidiary, Auckland Airport Holdings (No. 3) Limited,

wholly owns Ara Charitable Trustee Limited, which operates

the Ara Charitable Trust (the Auckland Airport Jobs and

Skills Hub). The other two subsidiaries are the Auckland

International Airport Limited Share Purchase Plan and the

Auckland Airport Limited Executive Long-Term Incentive Plan,

which are consolidated because the company has control of

the plans (refer note 23).

All the subsidiaries are incorporated in New Zealand.

Auckland Airport provides airport facilities, supporting

infrastructure and aeronautical services in Auckland, New

Zealand. The group earns revenue from aeronautical activities,

on-airport retail concessions and car parking facilities, stand-

alone investment properties and other charges and rents

associated with operating an airport.

These financial statements were authorised for issue

in accordance with a resolution of the directors on

23 August 2023.

2. Summary of significant accounting policies

(a) Basis of preparation

Statutory base

These financial statements have been prepared in accordance

with the requirements of Part 7 of the Financial Markets

Conduct Act 2013 and the NZX Main Board and Debt Market

Listing Rules.

Measurement base

The financial statements have been prepared on a historical

cost basis, except for investment properties, land, buildings

and services, runway, taxiways and aprons, infrastructural

assets and derivative

financial instruments, which have been

measured at fair value.

When the group applies fair value hedges to borrowings, the

carrying value of the borrowings are adjusted for fair value

changes attributable to the risk being hedged.

Presentation currency

These financial statements are presented in New Zealand

dollars, and all values are rounded to the nearest million dollars

($M) and one decimal point unless otherwise indicated.

(b) Statement of compliance

The financial statements have been prepared in accordance

with generally accepted accounting practice in New Zealand

(NZ GAAP). They comply with New Zealand equivalents to

International Financial Reporting Standards (NZ IFRS) and

other applicable Financial Reporting Standards as appropriate

for profit-oriented entities. These financial statements also

comply with International Financial Reporting Standards (IFRS).

Refer to note 3(e) for disclosure of non-GAAP financial

information presented in these financial statements. These

financial statements are prepared on a going concern basis.

(c) New accounting standards and

interpretations

The accounting policies set out in these financial statements

are consistent for all periods presented except as

identified below.

Climate-related disclosure standard

In 2021, the New Zealand Government passed legislation

to introduce mandatory climate-related disclosures for large

publicly listed companies, insurers, banks, non-bank deposit-

takers and investment managers. This means that for the

reporting periods starting on or after 1 July 2023, Auckland

Airport will be required by law to publish annual disclosures

on the impact of climate change on the business. The New

Zealand External Reporting Board (XRB) has published a suite

of standards in line with the recommendations of the Task

Force on Climate-related Financial Disclosure (TCFD), the global

best-practice benchmark for climate-related reporting. The final

standards were published in December 2022.

Auckland Airport has begun to apply the XRB’s standards

from 1 July 2022, a year before full compliance with the new

standards is required.

There are no other new or amended standards that are issued

but not yet effective that are expected to have a material impact

on the group.

Auckland International Airport Limited

33
Financial statements

(d) Basis of consolidation

The consolidated financial statements incorporate the assets,

liabilities and results of the subsidiaries over which the group

has control. On consolidation, all inter-company balances

and transactions, income and expenses, and profit and

losses resulting from transactions within the group have been

eliminated in full.

(e) Fair value heirachy

The group selects valuation techniques that aim to maximise

the use of relevant observable inputs and minimise the use of

unobservable inputs, provided that sufficient data is available.

All assets and liabilities for which fair value is measured are

assigned to levels within the fair value hierarchy. The different

levels comprise:

•Level 1 – the fair value is calculated using quoted prices for

the asset or liability in active markets;

•Level 2 – the fair value is estimated using inputs other than

quoted prices included in Level 1 that are observable for

the asset or liability, either directly (as prices) or indirectly

(derived from prices); and

•Level 3 – the fair value is estimated using inputs for

the asset or liability that are not based on observable

market data.

To determine the level used to estimate fair value, the group

assesses the lowest level input that is significant to that

fair value.

(f) Investments in associate and joint ventures

The equity method of accounting is used for the investment

over which the group has significant influence but not a

controlling interest, as well as the investments classified as joint

ventures, where the group maintains joint control.

Under the equity method, the investment is carried at cost plus

post-acquisition changes in the group's share of net assets of

the associate less impairment losses. Goodwill relating to the

associate is included in the carrying amount of the investment.

The group's share of the associate and joint ventures’ post-

acquisition profits or losses is recognised in the income

statement, and its share of post-acquisition movements in

reserves and the property, plant and equipment revaluation

reserve is recognised in other comprehensive income and

accumulated as a separate component of equity in the

share of reserves of associate and joint ventures. The post-

acquisition movements are included after adjustments to align

the accounting policies with those of the group.

(g) Property, plant and equipment

Properties held for airport operations purposes are classified as

property, plant and equipment.

Property, plant and equipment are initially recognised at cost.

Vehicles, plant and equipment are carried at cost less

accumulated depreciation and impairment losses.

Land, buildings and services, runway, taxiways and aprons and

infrastructural assets are carried at fair value, as determined

by an independent registered valuer, less accumulated

depreciation and any impairment losses recognised after the

date of any revaluation. Land, buildings and services, runway,

taxiways and aprons and infrastructural assets acquired or

constructed after the date of the latest revaluation are carried

at cost, which approximates fair value. Revaluations are carried

out with sufficient regularity to ensure that the carrying amount

does not differ materially from fair value at the balance date.

Revaluations

Revaluation increases are recognised in other comprehensive

income and accumulated as a separate component of equity in

the property, plant and equipment revaluation reserve, except

to the extent that they reverse a revaluation decrease of the

same asset previously recognised in the income statement, in

which case the increase is recognised in the income statement.

Revaluation decreases are recognised in the income statement,

except to the extent that they offset a previous revaluation

increase for the same asset, in which case the decrease is

recognised in other comprehensive income and accumulated

as a separate component of equity in the property, plant and

equipment revaluation reserve.

Accumulated depreciation as at the revaluation date is

eliminated against the gross carrying amounts of the assets

and the net amounts are restated to the revalued amounts of

the assets.

Revaluation surpluses are transferred from the property, plant

and equipment revaluation reserve to retained earnings on

derecognition of the asset or if the asset is transferred to

investment properties.

Depreciation

Depreciation is calculated on a straight-line basis to allocate the

cost or revalued amount of an asset, less any residual value,

over its estimated useful life.

The estimated useful lives of property, plant and equipment are

as follows:

Land (including reclaimed land)Indefinite

Buildings and services5 – 50 years

Infrastructural assets5 – 80 years

Runway, taxiways and aprons12 – 40 years

Vehicles, plant and equipment3 – 10 years

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

34

Leased assets

Space within the terminals and certain properties used for

aeronautical purposes, where the group acts as a lessor, are

leased to tenants under operating leases with rentals payable

monthly. Lease payments for some contracts include CPI

increases, sales-based concession fees and adjustments to

rentals depending on the passenger numbers.

To manage credit risk exposure where considered necessary,

the group may obtain bank guarantees for the term of

the lease.

Although the group is exposed to changes in the residual value

at the end of the current leases, the group typically enters into

new operating leases and therefore will not immediately realise

any reduction in residual value at the end of these leases.

Expectations about the future residual values are reflected in

the fair value of the properties.

(h) Investment properties

Investment properties are properties held by the group to

earn rental income, for capital appreciation or both (including

property being constructed or developed for future use as

investment property). Land held for a currently undetermined

future use is classified as investment property.

Investment properties are measured initially at cost and

then, subsequent to that initial measurement, are stated

at fair value. To determine fair value, Auckland Airport

commissions investment property valuations at least annually

by independent valuers. Gains or losses arising from changes

in the fair values of investment properties are recognised in the

income statement.

If the fair value of investment property under construction

cannot be reliably determined but it is expected that the

fair value of the property can be reliably determined when

construction is complete, then investment property under

construction will be measured at cost until either its fair value

can be reliably determined or construction is complete.

Transfers are made to investment property when there is a

change in use. This may be evidenced by the ending of owner

occupation, commencement of an operating lease to another

party or commencement of construction or development for

future use as investment property.

A property transfer from investment property to property, plant

and equipment or inventory has a deemed cost for subsequent

accounting at its fair value at the date of change in use.

If an item of property, plant and equipment becomes an

investment property, the group accounts for such property as

an investment property only subsequent to the date of change

in use.

Investment properties where the group acts as a lessor are

leased to tenants under operating leases with rentals payable

monthly. Lease payments for some contracts include CPI

increases, sales-based concession fees and other adjustments

to rentals, with any credit risk being managed in the same way

as described for property, plant and equipment leased assets

(refer to note 2(g)).

Lease incentives are initially recognised at value of the incentive

and amortised over the term of the lease. Other lease

receivables may arise when fixed future retail or rental revenue

increases are recognised on a straight-line basis over the term

of the lease (refer to note 2(m)). The group assesses lease

incentives and receivables for impairment at each reporting

date and recognises impairment losses as prescribed by NZ

IFRS 9.

(i) Impairment of non-financial assets

Property, plant and equipment and investments in associate

and joint ventures are assessed for indicators of impairment at

each reporting date. For further information, refer to note 8 and

note 11(c).

(j) Borrowing costs

Borrowing costs that are directly attributable to the acquisition,

construction or production of a qualifying asset are capitalised

as part of the cost of that asset. Capitalisation is suspended

if active development of the qualifying asset is suspended

for an extended period. Other borrowing costs are expensed

as incurred.

(k) Financial instruments

The group’s financial assets comprise cash and cash

equivalents, accounts receivable and dividends receivable

(classified as financial assets at amortised cost) and derivatives

(classified as financial assets at fair value through profit and loss

or designated as a hedge).

The group's financial liabilities comprise accounts payable and

accruals, borrowings, provisions, other liabilities (classified as

financial liabilities at amortised cost) and derivatives (classified

as financial liabilities at fair value through profit and loss or

designated as a hedge).

Cash

Cash in the statement of financial position and the cash flow

statement comprises cash on hand, on-call deposits held with

banks and short-term highly liquid investments.

Accounts receivable

Accounts receivable are recognised and carried at the original

invoice amount less an allowance for impairment. Auckland

Airport applies the "simplified approach" for including a general

provision for expected credit losses as prescribed by NZ IFRS

9. This approach permits the use of lifetime expected loss

provisions for all trade receivables. In addition, the collectability

of individual debtors is reviewed on an ongoing basis and a

specific provision for expected credit losses is made when

there is evidence that Auckland Airport will not be able to

collect the receivable. Debtors are written off when recovery

is no longer anticipated.

2. Summary of significant accounting policies CONTINUED

Auckland International Airport Limited

35
Financial statements

Accounts payable and accruals

Accounts payable and accruals are not interest bearing and

are initially stated at their fair value and subsequently carried at

amortised cost.

Borrowings

All borrowings are initially recognised at the value of the

consideration received. The carrying value is subsequently

measured at amortised cost using the effective interest

method, except borrowings subject to fair value hedges, which

are adjusted for effective changes in the fair value of the

hedging instrument.

The increase and decrease in borrowings are reported net in

the cash flow statement for bank facilities and commercial

paper where the turnover is frequent and the maturities

are short.

Derivative financial instruments

The group uses derivative financial instruments to hedge

its risks associated with interest rates and foreign currency.

Derivative financial instruments are recognised at fair value.

The group designates as fair value hedges derivative financial

instruments on fixed-coupon debt where the fair value of the

debt changes as a result of changes in market interest rates.

The carrying amounts of the hedged items are adjusted for

gains and losses attributable to the risk being hedged. The

hedging instruments are also remeasured to fair value. Gains

and losses from both are taken to the income statement.

Cash flow hedges are currently applied to future interest

cash flows on variable rate loans. The effective portion of

the gain or loss on the hedging instruments is recognised

directly in other comprehensive income and accumulated as

a separate component of equity in the cash flow hedge

reserve, while the ineffective portion is recognised in the income

statement. Amounts taken to equity are transferred to the

income statement when the hedged transaction affects the

income statement.

Changes in the fair value of the cost to convert foreign currency

to New Zealand dollars (NZD) of cross-currency interest rate

swaps are separately accounted for as a cost of hedging

and recognised within a new reserve within equity (cost of

hedging reserve).

(l) Issued and paid-up capital

Ordinary shares are classified as equity. Incremental costs

directly attributable to the issue of new shares or options are

shown in equity as a deduction, net of tax, from the proceeds.

When the group reacquires its own shares, those treasury

shares are recognised as a reduction in shareholders’ equity.

(m) Revenue recognition

Airfield income

Airfield income consisting of landing charges and aircraft

parking charges is paid by the airlines and recognised as

revenue when the airport facilities are used.

Passenger services charges

Passenger services charges relating to arriving, departing and

transiting passengers are paid by the airlines and recognised as

revenue when the airport facilities are used by the passengers.

Retail and rental income

Retail concession fees are recognised as revenue on an accrual

basis based on the turnover of the concessionaires and in

accordance with the related agreements. Rent abatements are

recognised as an offset to revenue as negative variable lease

payments when the group has an obligation to adjust fixed rent

in response to significant reductions in passenger numbers or

similar material adverse change. Fixed retail and rental income

increases are recognised as revenue on a straight-line basis

over the term of the leases, which may result in lease receivable

balances. The group assesses lease receivable balances for

impairment at each reporting period (refer note

2(h)).

Car park income

Revenue from public car parks is recognised when the car park

utilisation has been completed. Revenue from staff car parks is

recognised as revenue when the airport facilities are used.

Insurance proceeds

Insurance proceeds are recognised as income when the

recovery of incurred damages is virtually certain.

Other income

Other income includes revenue from utilities provided

to our tenants, such as electricity, water and gas.

Revenue from utilities is recognised and billed based on

customer consumption.

Interest income

Interest income is recognised as interest accrues using the

effective interest method.

Dividend income

Dividends are recognised when the group’s right to receive

payment is established.

(n) Employee benefits

Employee benefits, including salaries and wages,

superannuation and leave entitlements are expensed as the

related service is provided.

The group also provides benefits to executives and employees

of the group in the form of share-based payment transactions,

whereby executives and employees render services in

exchange for shares or rights over shares (equity-settled

transactions) and/or cash settlements based on the price of

the group’s shares against performance targets (cash-settled

transactions). The cost of the transactions is spread over the

period in which the employees provide services and become

entitled to the awards.

Equity-settled transactions

The cost of the equity-settled transactions with employees

is measured by reference to the fair value of the equity

instruments at the date at which they are granted. The cost

of equity-settled transactions is recognised in the income

statement, together with a corresponding increase in the share-

based payment reserve in equity.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

36

Cash-settled transactions

The fair value of cash-settled transactions is determined at

each reporting date, and the change in fair value is recognised

in the income statement with a corresponding change in the

employee entitlements liability.

(o) Income tax and other taxes

Income tax

Current tax assets and liabilities are measured at the amount

expected to be recovered from, or paid to, the taxation

authorities based on the current period's taxable income.

Deferred tax

Deferred income tax is provided on all temporary differences at

the balance date between the tax bases of assets and liabilities

and their carrying amounts for financial reporting purposes.

Under NZ IAS 12, the measurement of deferred tax depends

on whether an entity expects to recover an asset through

use or by selling it and includes a rebuttable presumption that

an investment property is recovered entirely through sale. The

group has rebutted that presumption since it retains ownership

in all investment property and recovers the value through use,

being operating leases to tenants.

Income taxes relating to items recognised in other

comprehensive income or directly in equity are recognised in

other comprehensive income or directly in equity and not in the

income statement.

Goods and services tax (GST)

Revenue, expenses, assets and liabilities are stated exclusive

of GST, except for receivables and payables, which are stated

with the amount of GST included.

Cash flows are included in the cash flow statement on a net

basis, and the GST component of cash flows arising from

investing and financing activities, which is recoverable from,

or payable to, the taxation authority, is classified as part of

operating activities.

Commitments and contingencies are disclosed net of the

amount of GST.

3. Significant accounting judgements, estimates and assumptions

In producing the financial statements, the group makes

judgements, estimates and assumptions based on known facts

at a point in time. These accounting judgements, estimates

and assumptions will rarely exactly match the actual outcome.

The judgements that have the most significant effect on the

amounts recognised and the estimates and assumptions that

have a significant risk of causing a material adjustment to the

carrying values of assets and liabilities within the next financial

year are as follows:

(a) Fair value of investment property

Changes to market conditions or to assumptions made in the

estimation of fair value may result in changes to the fair value of

investment property. The carrying value of investment property

and the valuation methodology are disclosed in note

12.

(b) Carrying value of property, plant and

equipment

Judgement is required to determine whether the fair value

of land, buildings and services, runway, taxiways and aprons

and infrastructural assets has changed materially from the

last revaluation. The determination of fair value at the time

of the revaluation requires estimates and assumptions based

on market conditions at that time. Changes to estimates,

assumptions or market conditions subsequent to a revaluation

will result in changes to the fair value of property, plant

and equipment.

Remaining useful lives and residual values are estimated

based on management’s judgement, previous experience and

guidance from registered valuers. Changes in those estimates

affect the carrying value and the depreciation expense in the

income statement.

The carrying value of property, plant and equipment and the

valuation methodologies and assumptions are disclosed in

note 11(c).

(c) Movements in the carrying value of

property, plant and equipment

When revaluations are carried out by independent valuers, the

valuer determines a value for individual assets. This may involve

allocations to individual assets from projects and allocations to

individual assets within a class of assets. The allocations to

individual assets may be different to the allocations performed

at the time a project was completed or different to the

allocations to the individual asset made at the previous asset

revaluation. These differences at an asset level may be material

and can impact the income statement.

(d) COVID-19

The financial position and performance of the group continued

to reflect the ongoing recovery of the aviation industry from the

COVID-19 pandemic. The timing of full traffic recovery to pre-

pandemic levels remains uncertain and constrained by staffing

shortages and return of aircraft to service across the industry.

During February 2022, Auckland Airport renegotiated its bank

facility interest coverage covenants for a transitionary period

until December 2024. The following table sets out the EBITDA-

based interest coverage covenants.

2. Summary of significant accounting policies CONTINUED

Auckland International Airport Limited

37
Financial statements

12 months endingInterest coverage covenant

Jun 20221.25x

Dec 20221.25x

Jun 20232.00x

Dec 20232.00x

Jun 20242.50x

Dec 2024 onwards3.00x

Auckland Airport’s actual interest coverage for the 12 months

ended 30 June 2023 was 6.52x. Given the strong rebound in

the aviation market during the year ended 30 June 2023 and

industry-wide optimism for further recovery, Auckland Airport’s

12-month interest coverage metrics are likely to progressively

strengthen going forward.

The pandemic has continued to impact key estimates and

judgements used in these financial statements, including:

•Recognition of rent abatements as negative variable rent

(see note 2(m) and note 5); and

•Impairment and write-off of capital works in progress (see

note 11 and note 12).

(e) Non-GAAP financial information

In reporting financial information, the group presents the

following non-GAAP performance measures, which are not

defined or specified under the requirements of NZ IFRS:

•EBITDAFI (Earnings before interest expense, taxation,

depreciation, fair value adjustments and investments in

associate and joint ventures);

•EBITDA (Earnings before interest expense, taxation and

depreciation); and

•EBIT (Earnings before interest expense and taxation).

The group believes that these non-GAAP measures, which

are not considered to be a substitute for or superior to NZ

IFRS measures, provide stakeholders with additional helpful

information on the performance of the business. The non-

GAAP measures are consistent with how the group's financial

performance is planned and reported to the Board and

Audit and Financial Risk Committee. However, the non-GAAP

measures may not be comparable to similarly titled amounts

reported by other companies.

(f) Flood-related insurance matters

On 27 January 2023, Auckland experienced widespread flash

flooding caused by record-breaking rainfall. Auckland Airport

experienced flooding across the precinct and particularly

the international terminal building. Both the domestic and

international terminals were closed for short periods starting

that evening, with domestic flights resuming at midday on

28 January 2023 and international flights from the morning of

29 January 2023.

Material damage

Auckland Airport suffered flood damage to assets across its

precinct. The most significant areas of damage were to check-

in, baggage and vertical transportation at the international

terminal building. Auckland Airport has material damage,

business interruption and construction works insurance policies

in place.

The group has engaged independent experts to estimate the

likely extent of damage. The experts do not yet have sufficient

information to complete a full assessment.

As a result, these financial statements include a number

of significant judgements and estimates related to the flood

event. It is possible that the actual financial impacts will differ

from those included in these financial statements and these

differences may be material. Details of the judgements and

estimates made are provided in the following parts of this note.

Asset impairment and write-off

The group has commenced the repair and replacement of

damaged assets. Repairs completed during the year ended

30 June 2023 have been recognised as an expense during

the period. Assets that have been replaced during the period

have been treated as a disposal with the cost of replacement

recognised as capital expenditure.

Impairments are recognised for any assets that remain

damaged at year end. Impairments are recognised in the

consolidated income statement, except to the extent that they

offset a previous revaluation increase for the same asset, in

which case the decrease is recognised in other comprehensive

income and accumulated as a separate component of equity

in the property, plant and equipment revaluation reserve.

The group has engaged independent experts to identify

damaged assets and estimate the extent to which the carrying

value in the financial statements may be impaired. However,

assessments remain incomplete.

Other insurance

In addition to recovery of the expected reconstruction costs,

Auckland Airport is able to seek recovery of additional items,

including the following:

•Business interruption costs and loss of revenue while the

Auckland precinct was closed or affected by the flood;

•Costs of professional advisors assisting the company as a

result of the flood; and

•Additional ongoing operating costs as a result of

the damage.

The additional expenses are recognised when incurred and

any recovery of these items is recognised when recovery is

virtually certain.

Insurance recovery income

The group recognises the expected insurance proceeds when

they can be reliably estimated and the recovery is virtually

certain. The insurers have acknowledged the flood event

damage. However, as described above, assessments of the full

extent and costs to remediate are incomplete.

During the year ended 30 June 2023, the insurers agreed to an

initial payment of $5.0 million, which the group has recognised

as income.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

38

The flood related amounts recognised during the year ended 30 June 2023 in the consolidated income statement and the

consolidated statement of comprehensive income are shown in the table below:

2023

Notes$M

Income

5.0

Material damage5.0

Expenses

(8.4)

Staff(0.2)

Asset management, maintenance and airport operations(7.3)

Marketing and promotions(0.1)

Professional services and levies(0.2)

Other expenses(0.3)

Fixed asset write-offs and impairment

1

(0.3)

Other comprehensive income

(21.0)

Flood-related fixed asset impairments

2

(21.0)

1Flood related expenses include $0.3 million relating to fixed asset impairments.

The group also incurred $21.0 million of flood related fixed asset impairments, through other comprehensive income, which were related to the Aeronautical

segment. Refer to note 3(f) and 11(c) for further information.

2Recognised in Property, plant and equipment revaluation reserve.

4. Segment information

(a) Identification of reportable segments

The group has identified its operating segments based on the

internal reports reviewed and used by the chief executive, as

the chief operating decision-maker, in assessing performance

and in determining the allocation of resources.

The operating segments are identified by management

based on the nature of services provided. Discrete financial

information about each of these operating segments is reported

to the chief executive at least monthly. The chief executive

assesses performance of the operating segments based on

segment EBITDAFI. Interest income and expenditure, taxation

and depreciation, fair value adjustments and share of

profits

of associate and joint ventures are not allocated to operating

segments, as the group manages the cash position and assets

at a group level.

(b) Types of services provided

Aeronautical

The aeronautical business provides services that facilitate the

movement of aircraft, passengers and cargo and provides utility

services that support the airport. The aeronautical business

also earns rental revenue from space leased in facilities, such

as terminals.

From 2 May 2022, New Zealand's international border

progressively reopened, initially to visa waivered countries.

From 1 August 2022, New Zealand's international border

reopened to all passengers. The group did not provide

abatements to aeronautical customers during the year ended

30 June 2023 (2022: $1.3 million). Refer to note 3(d) for

further information.

Retail

The retail business provides services to the retailers within the

terminals and provides car parking facilities for passengers,

visitors and airport staff.

Ongoing COVID-19 impacts continued to affect retailers within

the terminals, and the group provided $57.9 million (2022:

$172.5 million) of abatements to retailers during the year ended

30 June 2023. Refer to note 3(d) for further information.

Property

The property business earns rental revenue from space leased

on airport land outside the terminals, including cargo buildings,

hangars and stand-alone investment properties.

The group provided $0.2 million (2022: $4.9 million) of

rent abatements to property tenants during the year ended

30 June 2023.

(c) Major customers

The group has a number of customers to which it provides

services. The most significant customer in the 2023 financial

year accounted for 27% of external revenue (2022: 30%).

The revenue from this customer is included in all three

operating segments.

3. Significant accounting judgements, estimates and assumptions CONTINUED

Auckland International Airport Limited

39
Financial statements

(d) Geographical areas

Revenue from the reportable segments is derived in New Zealand, it being the location where the sale occurred. Property, plant and

equipment and investment property of the reportable segments are located in New Zealand. The investments in associates are not

part of the reportable segments of the group.

AeronauticalRetailPropertyTotal

$M$M$M$M

Year ended 30 June 2023

Income from external customers

Airfield income86.6--86.6

Passenger services charge132.9--132.9

Retail income-130.9-130.9

Rental income26.71.0142.9170.6

Rates recoveries0.83.58.312.6

Car park income-57.7-57.7

Flood-related income5.0--5.0

Other income8.18.25.121.4

Total segment income

260.1201.3156.3617.7

Expenses

Staff34.84.34.443.5

Asset management, maintenance and airport operations47.320.35.773.3

Rates and insurance7.27.914.229.3

Marketing and promotions2.43.10.86.3

Professional services and levies1.10.51.43.0

Fixed asset write-offs, impairment and termination costs3.81.0-4.8

Reversal of fixed asset impairment and termination costs-(1.0)-(1.0)

Flood-related expenses8.4--8.4

Other expenses4.21.92.78.8

Total segment expenses

109.238.029.2176.4

Segment earnings before interest expense, taxation,

depreciation, fair value adjustments and

investments in associate and joint ventures (EBITDAFI)

1

150.9163.3127.1441.3

1EBITDAFI is a non-GAAP measure. Refer to note 3(e) for more information.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

40

AeronauticalRetailPropertyTotal

$M$M$M$M

Year ended 30 June 2022

Income from external customers

Airfield income60.9--60.9

Passenger services charge33.8--33.8

Retail income-22.7-22.7

Rental income16.00.8112.9129.7

Rates recoveries0.81.76.18.6

Car park income-26.2-26.2

Other income7.32.84.314.4

Total segment income

118.854.2123.3296.3

Expenses

Staff28.93.43.635.9

Asset management, maintenance and airport operations41.77.84.654.1

Rates and insurance5.53.510.019.0

Marketing and promotions0.40.70.11.2

Professional services and levies0.70.10.91.7

Fixed asset write-offs, impairment and termination costs6.8--6.8

Reversal of fixed asset impairment and termination costs----

Other expenses1.90.61.13.6

Total segment expenses

85.916.120.3122.3

Segment earnings before interest expense, taxation,

depreciation, fair value adjustments and

investments in associate and joint ventures (EBITDAFI)

1

32.938.1103.0174.0

1EBITDAFI is a non-GAAP measure. Refer to note 3(e) for more information.

(e) Reconciliation of segment income to income statement

20232022

$M$M

Segment income617.7296.3

Interest income3.20.3

Other revenue5.03.7

Total income

625.9300.3

4. Segment information CONTINUED

Auckland International Airport Limited

41
Financial statements

(f) Reconciliation of segment EBITDAFI to income statement

The income included in unallocated external operating income consists mainly of interest from third-party financial institutions

and income from telecommunication and technology services provided to tenants. The expenses included in unallocated external

operating expenses consist mainly of internal corporate and legal staff expenses and consulting fees.

20232022

$M$M

Segment EBITDAFI

1

441.3174.0

Unallocated external operating income8.24.0

Unallocated external operating expenses(52.4)(33.5)

Total EBITDAFI as per income statement

1

397.1144.5

Investment property fair value (decrease)/increase(139.7)204.4

Property, plant and equipment revaluation(15.6)(1.4)

Derivative fair value increase/(decrease)(0.7)1.7

Share of profit/(loss) of associate and joint ventures11.1(12.8)

Depreciation(145.3)(113.1)

Interest expense and other finance costs(62.7)(53.7)

Profit before taxation

44.2169.6

1EBITDAFI is a non-GAAP measure. Refer to note 3(e) for more information.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

42

5. Profit for the year

20232022

Notes$M$M

Retail and rental income includes:

Variable lease payments86.515.7

Rent abatements(58.1)(178.7)

Staff expenses comprise:

Salaries and wages51.643.6

Employee benefits5.75.8

Share-based payment plans(0.1)0.9

Defined contribution superannuation2.01.7

Government wage subsidy-(4.2)

Other staff costs4.12.2

63.350.0

Fixed asset write-offs, impairment and termination costs comprise:

Write-offs – property, plant and equipment11(a)2.10.8

Impairment – property, plant and equipment11(a)2.76.1

Write-offs – investment properties12--

4.86.9

Flood-related fixed asset write-offs, impairment and termination

costs comprise:

Impairment – flood-related property, plant and equipment11(a)0.3-

0.3-

Reversal of fixed asset impairment and termination costs comprise:

Reversal of impairment – property, plant and equipment11(a)(1.0)-

(1.0)-

Other expenses include:

Directors' fees1.61.5

Bad debts written off2.4-

Loss on foreign currency movements0.1-

Interest expense and other finance costs comprise:

Interest on bonds and related hedging instruments41.929.2

Interest on bank facilities and related hedging instruments18.019.7

Interest on AMTN notes and related hedging instruments14.99.8

Interest on commercial paper and related hedging instruments7.33.0

82.161.7

Less capitalised borrowing costs11(a), 12(19.4)(8.0)

62.753.7

Interest rate for capitalised borrowing costs5.03%4.32%

Auckland International Airport Limited

43
Financial statements

The interest expense amounts disclosed in the table above include the effect of interest rate hedges. The gross interest costs of

bonds, bank facilities, Australian Medium Term Notes ('AMTN') and commercial paper, excluding the impact of interest rate hedges,

was $79.6 million for the year ended 30 June 2023 (2022: $45.2 million).

The group makes contributions to a defined contribution superannuation scheme. The group has no legal or constructive obligation

to make further contributions if the fund does not hold sufficient assets to pay employee benefits.

Auditor's remuneration

20232022

$'000$'000

Audit of financial statements

Audit and review of financial statements

1

510.0450.0

Other services

Regulatory audit work

2

87.585.0

Other services

3

186.049.0

Total fees paid to auditor

783.5584.0

1The audit fee includes fees for both the annual audit of the financial statements and the review of the interim financial statements.

2Regulatory audit work consists of the audit of airport-related regulatory disclosures.

3Other services include $38,000 relating to greenhouse gas inventory assurance and sustainability data quality non-assurance services. The group has also

paid $14,000 to Deloitte for administrative and other advisory services to the Corporate Taxpayers Group, of which the group, alongside a number of other

organisations, is a member. The remaining other services relates to trustee reporting of $5,000 and non-assurance services in relation to the integrity of the

aeronautical pricing model of $129,000.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

44

6. Reconciliation of profit after taxation with cash flow from operating activities

20232022

$M$M

Profit after taxation

43.2191.6

Non-cash items

Depreciation145.3113.1

Deferred taxation expense(19.2)(22.1)

Share-based payments0.1-

Fixed asset write-offs and impairment5.16.9

Reversal of fixed asset impairment(1.0)-

Equity-accounted (earnings)/loss from associate and joint ventures(11.1)12.8

Property, plant and equipment fair value revaluation15.61.4

Investment property fair value decrease/(increase)139.7(204.4)

Derivatives fair value (increase)/decrease0.7(1.7)

Items not classified as operating activities

Gain on asset disposals3.4-

Decrease/(increase) in provisions and property, plant and equipment retentions and payables(39.4)25.5

(Increase)/decrease in investment property retentions and payables(16.4)1.2

Increase in investment property lease incentives and receivables(12.5)(11.4)

Items recognised directly in equity0.50.9

Movement in working capital

(Increase)/decrease in trade and other receivables(23.1)(3.1)

(Increase)/decrease in taxation receivable20.2(0.7)

(Decrease)/increase in accounts payable and provisions73.8(9.3)

Increase in other term liabilities0.20.5

Net cash flow from operating activities

325.1101.2

Auckland International Airport Limited

45
Financial statements

7. Taxation

(a) Income tax expense

20232022

$M$M

The major components of income tax are:

Current income tax

Current income tax charge20.51.2

Income tax over provided in prior year-(1.1)

Deferred income tax

Prior period adjustment(0.3)-

Movement in deferred tax(19.2)(22.1)

Total taxation (benefit)/expense

1.0(22.0)

(b) Reconciliation between prima facie taxation and tax expense

20232022

$M$M

Profit before taxation44.2169.6

Prima facie taxation at 28%12.447.5

Adjustments:

Share of associates' tax paid earnings(1.6)(0.1)

Revaluation with no tax impact(7.6)(75.1)

Income tax over provided in prior year-(1.1)

Re-estimated future tax benefits for buildings(1.6)5.2

Non-deductible asset write-offs, impairment and termination costs0.52.0

Other(1.1)(0.4)

Total taxation (benefit)/expense

1.0(22.0)

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

46

(c) Deferred tax assets and liabilities

Balance

1 July

2022

Movement

in income

Movement

in other

comprehensive

income

Movement

in equity

Offset against

taxable income

Balance

30 June

2023

$M$M$M$M$M$M

Deferred tax liabilities

Property, plant

and equipment303.5(15.2)40.4--328.7

Investment properties131.8(39.2)---92.6

Other1.11.4---2.5

Deferred tax liabilities

436.4(53.0)40.4--423.8

Deferred tax assets

Cash flow hedge(6.3)-(5.4)--(11.7)

Tax losses33.6(33.6)----

Provisions, accruals and

long-term incentive plan(2.8)(0.2)---(3.0)

Deferred tax assets

24.5(33.8)(5.4)--(14.7)

Net deferred tax liability

411.9(19.2)45.8--438.5

Balance

1 July

2021

Movement

in income

Movement

in other

comprehensive

income

Movement

in equity

Offset against

taxable income

Balance

30 June

2022

$M$M$M$M$M$M

Deferred tax liabilities

Property, plant

and equipment176.6(1.6)128.5--303.5

Investment properties144.6(12.8)---131.8

Other3.7(2.6)---1.1

Deferred tax liabilities

324.9(17.0)128.5--436.4

Deferred tax assets

Cash flow hedge20.0-(26.3)--(6.3)

Tax losses26.38.3--(1.0)33.6

Provisions and accruals0.3(3.2)-0.1-(2.8)

Deferred tax assets

46.65.1(26.3)0.1(1.0)24.5

Net deferred tax liability

278.3(22.1)154.8(0.1)1.0411.9

(d) Imputation credits

20232022

$M$M

Imputation credits available for use in subsequent reporting periods at 30 June0.80.8

7. Taxation CONTINUED

Auckland International Airport Limited

47
Financial statements

8. Associate and joint ventures

(a) Tainui Auckland Airport Hotel Limited

Partnership (joint venture)

The partnership between Tainui Group Holdings Limited and

Auckland Airport owns and operates a 4-star plus, 263-room

Novotel hotel adjacent to the international terminal at Auckland

Airport. The group and Tainui Group Holdings each hold a

50% stake in the partnership. The hotel is operated on the

partnership’s behalf by Accor Hospitality. The partnership has

a balance date of 31 March. The financial information for

equity accounting purposes has been extracted from audited

accounts for the period to 31 March 2023 and management

accounts for the balance of the year to

30 June 2023.

The group considers that there are no impairment indicators

of its investment in the joint venture. The hotel reopened to

the public on 1 July 2022 after being contracted to the New

Zealand Government as a Managed Isolation Quarantine (MIQ)

facility in the previous year. A valuation has been performed as

at 30 June 2023 for the Novotel and there is no indication of

impairment (30 June 2022: No impairment of the joint venture).

Two of Auckland Airport’s senior management staff are

directors on the boards of both the Tainui Auckland Airport

Hotel Limited Partnership and the Tainui Auckland Airport Hotel

2 Limited Partnership. No directors’ fees are paid in relation

to these appointments but the skills and experience of these

directors are being utilised to protect and grow Auckland

Airport’s investment.

Other transactions with the partnership are as follows:

20232022

$M$M

Rental income received0.70.7

Future minimum rentals receivable under non-cancellable operating lease12.412.1

(b) Tainui Auckland Airport Hotel 2 Limited

Partnership (joint venture)

The partnership between Tainui Group Holdings Limited and

Auckland Airport was formed in February 2017 to build and

operate a new Pullman Hotel at Auckland Airport. The group

and Tainui Group Holdings each hold a 50% stake in the

partnership. The group has contributed $6.1 million into the

partnership (2022: $51.1 million).

At 30 June 2023, an independent valuation was performed by

JLL for the Pullman Hotel. The fair value of the completed hotel

was determined to be $182.0 million, resulting in a $2.0 million

revaluation gain for the joint venture for the year ended 30 June

2023. The group's share of the gain was $1.0 million. In

the comparative year ended 30 June 2022, the joint venture

recognised a revaluation loss of $41.0 million and the group's

share of the loss was $20.5 million.

The hotel is categorised as Level 3 in the fair value hierarchy

(as described in note 2(e)) and the valuation methodology used

was a direct capitalisation of expected cash flows supported by

a discounted cash flow approach.

The hotel is planned to open in December 2023.

Other transactions with the partnership are as follows:

20232022

$M$M

Rental income received0.70.7

Future minimum rentals receivable under non-cancellable operating lease19.820.5

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

48

(c) Queenstown Airport Corporation Limited (associate)

The group has a 24.99% stake in Queenstown Airport

Corporation Limited (Queenstown Airport). One of Auckland

Airport’s senior management staff is on the board of

Queenstown Airport.

The group considers that there are no impairment indicators of

its investment in its share of Queenstown Airport.

Summary financial information

The information below reflects the full amounts in the financial

statements of the associate and joint ventures (not the group’s

share of those amounts) before adjustments for depreciation

expense and investment property revaluation gains to align the

accounting policies with those of the group.

Tainui Auckland Airport

Hotel Limited Partnership

Tainui Auckland Airport

Hotel 2 Limited Partnership

Queenstown Airport

Corporation Limited

202320222023202220232022

$M$M$M$M$M$M

Revenue24.821.5--59.626.8

EBITDA6.612.3--43.914.0

Profit after taxation1.89.0--22.71.1

Other comprehensive income/(loss)----45.155.5

Total comprehensive income for the year1.89.0--67.856.6

Distributions

Repayment of partner contribution/

dividends received-(6.0)--7.2-

Auckland Airport share of repayment of

partner contribution/dividends received-(3.0)--1.8-

Tainui Auckland Airport

Hotel Limited Partnership

Tainui Auckland Airport

Hotel 2 Limited Partnership

Queenstown Airport

Corporation Limited

202320222023202220232022

$M$M$M$M$M$M

Current assets12.78.22.20.36.56.9

Non-current assets58.059.0182.2101.2516.6466.7

Total assets

70.767.2184.4101.5523.1473.6

Current liabilities5.03.4(0.9)(0.7)39.819.0

Non-current liabilities59.059.670.9-38.269.5

Shareholders’ equity6.64.2114.4102.2445.0385.0

Total equity and liabilities

70.667.2184.4101.5523.0473.5

Auckland Airport ownership50.00%50.00%50.00%50.00%24.99%24.99%

Auckland Airport share of

shareholders' equity

3.32.157.251.1111.296.2

Investment property depreciation and

revaluation adjustment

35.632.4(19.5)(20.5)--

Goodwill6.16.1----

Gain on purchase----(0.9)(0.9)

Carrying value of investment

45.040.637.730.6110.395.3

8. Associate and joint ventures CONTINUED

Auckland International Airport Limited

49
Financial statements

Movement in the group’s carrying amount of investment in associate and joint ventures

20232022

$M$M

Investment in associate and joint ventures at the beginning of the year166.5154.4

Further investment in joint ventures6.114.0

Share of profit/(loss) of associate and joint ventures7.45.7

Revaluation of investment property3.7(18.5)

Share of reserves of associate and joint ventures11.213.9

Share of dividends received or repayment of partner contribution(1.8)(3.0)

Investment in associate and joint ventures at the end of the year

193.1166.5

9. Distribution to shareholders

As part of the changes negotiated to Auckland Airport’s banking covenants in February 2022, Auckland Airport agreed that no

dividends would be paid until after 31 December 2022. No dividends were paid during the year ended 30 June 2023.

10. Earnings per share

The earnings used in calculating basic and diluted earnings per share is net profit attributable to equity holders of $43.2 million

(2022: $191.6 million).

The weighted average number of shares used to calculate basic and diluted earnings per share is as follows:

20232022

SharesShares

For basic earnings per share1,472,279,3411,472,139,301

Effect of dilution of share options176,212302,480

For diluted earnings per share

1,472,455,5531,472,441,781

The 2023 reported basic earnings per share is 2.93 cents (2022: 13.02 cents).

The 2023 reported diluted earnings per share is 2.93 cents (2022: 13.01 cents).

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

50

11. Property, plant and equipment

(a) Reconciliation of carrying amounts at the beginning and end of the year

Land

Buildings and

servicesInfrastructure

Runway,

taxiways and

aprons

Vehicles,

plant and

equipmentTotal

$M$M$M$M$M$M

Year ended 30 June 2023

Balances at 1 July 2022

At fair value4,319.11,361.1615.6366.2-6,662.0

At cost----221.7221.7

Work in progress at cost-192.645.364.556.2358.6

Accumulated depreciation-(0.4)(44.3)(32.2)(179.3)(256.2)

Balances at 1 July 2022

4,319.11,553.3616.6398.598.66,986.1

Additions and transfers within

property, plant and equipment-378.7107.146.2(12.9)519.1

Transfers from/(to)

investment property15.4(1.1)--(0.3)14.0

Disposals-(3.5)---(3.5)

Fair value change recognised in the

revaluation reserve53.0-101.863.8-218.6

Fair value change recognised in the

income statement0.3-(9.7)(6.2)-(15.6)

Impairment-(2.7)---(2.7)

Impairment through revaluation

reserve – flood-related-(21.0)---(21.0)

Impairment through the income

statement – flood-related-(0.2)--(0.1)(0.3)

Reversal of impairment---1.0-1.0

Write-offs-(1.0)(0.1)(1.0)-(2.1)

Depreciation-(72.7)(34.6)(16.3)(21.7)(145.3)

Movement to 30 June 202368.7276.5164.587.5(35.0)562.2

Balances at 30 June 2023

At fair value4,387.81,401.5735.4416.9-6,941.6

At cost----246.0246.0

Work in progress at cost-500.873.571.118.2663.6

Accumulated depreciation-(72.5)(27.8)(2.0)(200.6)(302.9)

Balances at 30 June 2023

4,387.81,829.8781.1486.063.67,548.3

Additions for the year ended 30 June 2023 include capitalised

interest of $16.7 million (2022: $7.2 million).

Impairments and write-offs for the year ended 30 June 2023

include write-downs related to the flood damage. Refer to

note 3(f).

The group includes leased properties within property, plant and

equipment when the properties are held for the purpose of

airport operations. The following categories of property, plant

and equipment are leased to tenants:

•Aeronautical land, including land associated with aircraft,

freight and terminal use carried at $344.7 million (30 June

2022: $319.8 million);

•Land associated with retail facilities within terminal

buildings carried at $1,661.0 million (30 June 2022:

$1,452.4 million); and

•Terminal building premises (within buildings and services),

being 15% of total floor area and carried at $224.0 million

(30 June 2022: 14% of total floor area or $183.0 million).

Auckland International Airport Limited

51
Financial statements

Land

Buildings and

servicesInfrastructure

Runway,

taxiways and

aprons

Vehicles,

plant and

equipmentTotal

$M$M$M$M$M$M

Year ended 30 June 2022

Balances at 1 July 2021

At fair value4,705.71,055.2409.6339.7-6,510.2

At cost----208.0208.0

Work in progress at cost-138.8159.066.149.8413.7

Accumulated depreciation-(114.1)(16.9)(16.7)(157.7)(305.4)

Balances at 1 July 2021

4,705.71,079.9551.7389.1100.16,826.5

Additions and transfers within

property, plant and equipment-61.393.331.320.1206.0

Transfers from/(to)

investment property(0.4)(0.2)--(0.1)(0.7)

Disposals----(0.1)(0.1)

Revaluation recognised in

property, plant and equipment

revaluation reserve

(383.7)459.5---75.8

Revaluation recognised in the

income statement(2.5)1.1---(1.4)

Impairment---(6.1)-(6.1)

Reversal of impairment------

Write-offs--(0.6)(0.2)-(0.8)

Depreciation-(48.3)(27.8)(15.6)(21.4)(113.1)

Movement to 30 June 2022(386.6)473.464.99.4(1.5)159.6

Balances at 1 July 2022

At fair value4,319.11,361.1615.6366.2-6,662.0

At cost----221.7221.7

Work in progress at cost-192.645.364.556.2358.6

Accumulated depreciation-(0.4)(44.3)(32.2)(179.3)(256.2)

Balances at 1 July 2022

4,319.11,553.3616.6398.598.66,986.1

(b) Carrying amounts measured at historical cost less accumulated depreciation

Land

Buildings and

servicesInfrastructure

Runway,

taxiways and

aprons

Vehicles,

plant and

equipmentTotal

$M$M$M$M$M$M

Year ended 30 June 2023

At historical cost154.11,394.5688.7431.4246.02,914.7

Work in progress at cost-500.873.571.118.2663.6

Accumulated depreciation-(682.0)(206.0)(241.0)(200.6)(1,329.6)

Net carrying amount

154.11,213.3556.2261.563.62,248.7

Year ended 30 June 2022

At historical cost154.01,368.5592.2392.0221.72,728.4

Work in progress at cost-192.645.364.556.2358.6

Accumulated depreciation-(655.4)(184.6)(231.2)(179.3)(1,250.5)

Net carrying amount

154.0905.7452.9225.398.61,836.5

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

52

(c) Revaluation of land, buildings and services, infrastructure, runway, taxiways and aprons

At the end of each reporting period, the group makes an

assessment of whether the carrying amounts differ materially

from fair value and whether a revaluation is required. The

assessment considers movements in the capital goods price

index since the previous valuation, mid-year desktop reviews by

the previous valuers and changes in valuations of investment

property as an indicator of property, plant and equipment

valuation movement.

Valuations are completed in accordance with the company’s

asset valuation handbook, which is prepared in accordance

with financial reporting and valuation standards. Management

reviews the key inputs, assesses valuation movements and

holds discussions with the valuers as part of the process.

Discussions about the valuation processes and results are held

between the group’s management and the Board.

Land assets were independently valued at 30 June 2023 by

Savills Limited (Savills), Jones LangLaSalle Limited (JLL), CBRE

Limited (CBRE) and Aon Risk Solutions (AON). Infrastructure

and runway, taxiways and aprons assets were independently

valued by Beca Projects NZ Limited (Beca) at 30 June 2023.

Buildings and services assets were not revalued at 30 June

2023 but were impaired for damage caused by the January

2023 flood event as described below. The revaluation

assessment is that, following the impairments, there is

not a material difference between the carrying value and

the fair value of this asset class at 30 June 2023. The

revaluation assessment was supported by an initial review of

replacement costs by Beca at 31 March 2023, to determine

whether a revaluation was likely to be required, followed by

management's review of subsequent evidence at 30 June

2023. Both the Beca review and management's assessment

were based on movements in relevant subcategories of the

capital goods price index. The valuation approach is the

optimised depreciated replacement cost. Movements in the

relevant capital goods price index subcategories provide a

strong indication of movements in the cost of replacing these

assets as at 30 June 2023. The impairment assessment is

described below.

Impairment and write-offs – flood damage

The group assessed that certain assets in the following asset

classes were impaired due to damage from the January 2023

flood event:

•Buildings and services; and

•Vehicles, plant and equipment.

The most significant areas of damage were to check-in,

baggage and vertical transportation at the international terminal

building. The group engaged independent experts to estimate

the costs to repair or replace damaged assets and has

recognised the following impairments:

•Buildings and services, $21.0 million recognised as a

reduction in revaluation reserve and $0.2 million through

profit or loss; and

•Vehicles, plant and equipment, $0.1 million recognised as an

expense in the income statement.

The group has assessed that there were no indicators of

impairment to land, infrastructure or runways, taxiways and

aprons assets that are carried at fair value.

Impairment and write-offs – capital work in progress

In response to reduced aeronautical activity during the

COVID-19 pandemic, Auckland Airport suspended some

capital expenditure projects and impaired its capital work in

progress portfolio. The group has reassessed the capital work

in progress portfolio and, for the year ended 30 June 2023,

has reported additional impairments of $1.7 million (30 June

2022: $6.1 million). The impairment assessment methodology

was consistent with the prior year and the group considered

the following factors, including the extent to which projects:

•Are designed, consented, currently active and intended to

be completed;

•Are still contemplated by the airport masterplan or are a

strategic priority; and

•For aeronautical-related projects, whether or not they are still

expected to be included in the regulated asset base.

Projects that did not satisfy the relevant above factors were

written off. The group recognised $2.1 million of write-offs

during the year (2022: $0.8 million). Where projects satisfied

the relevant above factors, the group further categorised

them according to the likelihood of being completed to the

original scope and design. If a project is not completed to

the original design, a portion of the work already performed

may be abandoned in the future. Such projects were grouped

according to the assessed likelihood of material future scope

changes and impaired by between 25% and 75%.

Following the revaluations, and impairments of flood-damaged

assets and capital work in progress, the group has also

considered whether there is any further indication of impairment

at the cash-generating unit level. The group has assessed that

it has a single core cash-generating unit, which comprises

all assets other than investment property. The group has

considered its enterprise market valuation and the long-term

nature of its assets and concluded that there is no further

impairment at the cash-generating unit level.

11. Property, plant and equipment CONTINUED

Auckland International Airport Limited

53
Financial statements

Fair value measurement

The valuers use different approaches for valuing different

asset groups. Where the fair value of an asset is able to be

determined by reference to market-based evidence, such as

sales of comparable assets, the fair value is determined using

this information. Where fair value of the asset is not able to be

reliably determined using market-based evidence, discounted

cash

flows or optimised depreciated replacement cost is used

to determine fair value. Assets acquired or constructed after

the date of the latest revaluation are carried at cost, which

approximates fair value.

The group’s land, buildings and services, infrastructure, runway,

taxiways and aprons are all categorised as Level 3 in the fair

value hierarchy as described in note 2(e). During the year, there

were no transfers between the levels of the fair value hierarchy.

Land valuations

The valuers applied significant judgement in the valuation of

land associated with car park facilities and retail facilities within

terminal buildings at 30 June 2023. The major inputs and

assumptions that required judgement included

•Forecasts of the recovery of domestic and international air

travel; and

•Expected passenger flows and their expected car parking

and retail expenditure.

The valuers reviewed management's internal forecasts and

compared them with external evidence including forecasts by

the International Air Transport Association (IATA), published on

their website www.iata.org/.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

54

The table below summarises the valuation approach and the principal assumptions used in establishing the fair values:

20232022

Asset valuation approach

Inputs used to measure

fair value

Range of

significant

inputs

Weighted

average

Range of

significant

inputs

Weighted

average

Land

Airfield land, including

land for runway, taxiways,

aprons and approaches

Rate per sqm prior to holding costs

(excluding approaches)

$105 – 182$138$125 - 227$169

Market value alternative use

valuation plus development

and holding costs to achieve

land suitable for airport use

and direct sales comparison

Holding costs per sqm

(excluding approaches)

$53 – 98$72$48 - 93$67

Holding period

(excluding approaches)

5.0 yearsN/A5.0 yearsN/A

Airfield land discount rate12.00%N/A12.00%N/A

Rate per sqm (approaches)$20 – 127$38$21 - 127$38

Reclaimed land seawalls

Unit costs of seawall construction

per m

$5,279 – 11,361$8,533$4,672 - 10,055$7,552

Optimised depreciated

replacement cost

Unit costs of reclamation per sqm$208 – 208$208$173 - 173$173

Aeronautical land,

including land associated

with aircraft, freight and

terminal uses

Rate per sqm (excluding

commercially leased assets)

$160 – 1,083$306$181 - 1,212$300

Discounted cash flow

cross-referenced to a

market capitalisation of

net revenues as indicated

by market activity from

comparable transactions

and direct sales comparison

Market rent (per sqm) – average$52 – 1691$209$50 - 342$146

Market capitalisation rate – average5.00 – 6.50%5.76%4.00 - 6.17%4.87%

Terminal capitalisation rate4.75 – 6.75%6.10%4.00 - 6.25%5.38%

Discount rate5.00 – 8.50%7.60%6.00 - 8.00%6.64%

Rental growth rate (per annum)2.68 – 3.05%2.98%2.52 - 2.99%2.66%

Land associated with car

park facilities

Discount rate9.25 – 13.50%11.23%8.00 - 12.50%10.35%

Discounted cash flow

cross-referenced to a

market capitalisation of

net revenues as indicated

by market activity from

comparable transactions

Terminal capitalisation rate6.75 – 8.75%7.49%6.50 - 8.75%7.28%

Revenue growth rate (per annum)0.83 – 12.96%7.02%5.64 - 24.13%14.21%

Land associated with

retail facilities within

terminal buildings

Discount rate9.50 – 10.38%10.35%8.00 - 8.75%8.72%

Discounted cash flow

cross-referenced to a

market capitalisation of

net revenues as indicated

by market activity from

comparable transactions

Terminal capitalisation rate8.25 – 8.25%8.25%8.00 - 10.25%8.10%

Revenue growth rate (per annum)-9.08 – 2.96%2.62%2.93 - 3.92%3.87%

Market capitalisation rate7.00 – 12.50%7.15%5.75 - 6.00%5.99%

Other land

Direct sales comparisonRate per sqm$100 – 226$131$100 - 226$131

11. Property, plant and equipment CONTINUED

Auckland International Airport Limited

55
Financial statements

20232022

Asset valuation approachInputs used to measure fair value

Range of

significant

inputs

Weighted

average

Range of

significant

inputs

Weighted

average

Buildings and services

Terminal buildings

Optimised depreciated

replacement cost

Unit costs of construction per sqm

$1,686 –

19,536

$11,186

$1,686-

19,536

$11,186

Other buildings

Optimised depreciated

replacement cost

Unit costs of construction per sqm

$997 –

9,064

$1,993

$997 -

9,064

$1,993

Infrastructure

Water and drainage

Optimised depreciated

replacement cost

Unit costs of pipe construction per m

$180 –

13,600

$580

$158 -

5,832

$898

Electricity

Optimised depreciated

replacement cost

Unit costs of electrical cabling

construction per m

$174 – 556$411$141 - 450$409

Roads

Optimised depreciated

replacement cost

Unit costs of road and footpaths

construction per sqm

$52 – 273$105$58 - 185$111

Other infrastructure assets

Optimised depreciated

replacement cost

Unit costs of navigation aids and lights

$4,345 –

11,296

$7,645

$323 -

95,559

$12,635

Unit costs of fuel pipe construction

per m

$4,049 –

43,387

$4,735

$3,047 -

4,352

$4,180

Runway, taxiways and aprons

Optimised depreciated

replacement cost

Unit costs of concrete pavement

construction per sqm

$436 –

1,288

$643$340 - 532$527

Unit costs of asphalt pavement

construction per sqm

$181 –

1,244

$343$155 - 340$337

The valuation inputs for land are from the 2023 valuation, while the prior year's comparatives are from the 2022 valuation of these

assets. The valuation inputs for infrastructure and runway, taxiways and aprons are from the 2023 valuation, while the prior year's

comparatives are from the 2020 valuation of these assets.The valuation inputs for buildings and services are unchanged from the

2022 valuation. This asset class was not revalued in 2023 as the carrying value was not assessed to be materially different from

fair value.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

56

The table below includes descriptions of different valuation approaches:

VALUATION APPROACHDESCRIPTION

Income capitalisation approachA valuation methodology that determines fair value by capitalising a property’s sustainable

net income at an appropriate market-derived capitalisation rate, with subsequent capital

adjustments for near-term events, typically including letting-up allowances for vacancies

and pending expiries, expected short-term capital expenditure and the present value of

any difference between contract and market rentals.

Discounted cash flow analysisA valuation methodology that requires the application of financial modelling techniques.

Discounted cash flow analysis requires explicit assumptions to be made regarding

the prospective income and expenses of a property, such assumptions pertaining to

the quantity, quality, variability, timing and duration of inflows and outflows over an

assumed holding period. The assessed cash flows are discounted to present value at

an appropriate market-derived discount rate to determine fair value.

Direct sales comparison approachA valuation methodology whereby the subject property is compared to recently sold

properties of a similar nature with fair value determined through the application of positive

and negative adjustments for their differing attributes.

Residual value approachA valuation technique used primarily for property that is undergoing, or is expected to

undergo, redevelopment. Fair value is determined through the estimation of a gross

realisation on completion of the redevelopment, with deductions made for all costs

associated with converting the property to its end use, including finance costs and a

typical profit margin for risks assumed by the developer.

Market value alternative use (MVAU)A valuation methodology whereby fair value is determined as the estimated amount for

which a property should exchange on the date of valuation between a willing buyer and a

willing seller in an arm’s-length transaction after proper marketing, wherein the parties

had each acted knowledgeably, prudently and without compulsion, with the explicit

assumption that the existing use of the asset is ignored.

Optimised depreciated replacement

cost (ODRC)

A valuation methodology whereby fair value is determined by calculating the cost

of constructing a modern equivalent asset at current market-based input cost rates,

adjusted for the remaining useful lives of the assets (depreciation) and any sub-

optimal usage of the assets in their current application (optimisation). These inputs are

deemed unobservable.

11. Property, plant and equipment CONTINUED

Auckland International Airport Limited

57
Financial statements

The table below summarises each registered valuer’s valuation of property, plant and equipment:

30 June 202330 June 2022

Asset classification

Valuer$MValuer$M

Airfield land, including land for runway, taxiways, aprons

and approaches

1

Savills1,065.2Savills1,165.0

Reclaimed land seawalls

1

AON / Savills348.1AON / Savills296.2

Aeronautical land, including land associated with aircraft,

freight and terminal uses

1

JLL / Savills531.2JLL / Savills645.8

Land associated with car park facilities

1

CBRE / Savills510.2CBRE611.1

Land associated with retail facilities within terminal buildings

1

CBRE / Savills1,664.5CBRE1,452.4

Other land

1

CBRE / Savills268.6JLL / Savills148.6

Terminal buildings

2

Beca1,447.8Beca1,324.6

Other buildings

3

Beca382.0Beca228.7

Water and drainage

4

Beca225.3Beca158.7

Electricity

4

Beca84.9Beca48.5

Roads

4

Beca286.0Beca246.4

Other infrastructure assets

4

Beca184.9Beca163.0

Runway, taxiways and aprons

5

Beca486.0Beca398.5

Assets carried at fair value7,484.76,887.5

Vehicles, plant and equipment (carried at cost less

accumulated depreciation)N/A63.6N/A98.6

Balance at 30 June

7,548.36,986.1

1Land assets were revalued at 30 June 2023. This class was previously revalued at 30 June 2022.

2At 30 June 2023, the assessment is that there is no material change in the fair value of terminal buildings assets compared with carrying values. This class

was last revalued at 30 June 2022.

3At 30 June 2023, the assessment is that there is no material change in the fair value of building and services assets compared with carrying values. This class

was last revalued at 30 June 2022.

4Infrastructure assets were revalued at 30 June 2023. This class was last revalued at 30 June 2020.

5Runways,taxiways and aprons were revalued at 30 June 2023. This class was last revalued at 30 June 2020.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

58

The following table shows the impact on the fair value due to a change in a significant unobservable input:

Fair value measurement

sensitivity to significant:

Increase in

input

Decrease in

input

Unobservable inputs within the income capitalisation approach

Market rentThe valuer’s assessment of the net market income

attributable to the property

IncreaseDecrease

Market capitalisation rateThe rate of return, determined through analysis of

comparable market-related sales transactions, that is

applied to the market rent to assess a property’s value

DecreaseIncrease

Unobservable inputs within the discounted cash flow analysis

Discount rateThe rate, determined through analysis of comparable

market-related sales transactions, that is applied to a

property’s future net cash flows to convert those cash

flows into a present value

DecreaseIncrease

Terminal capitalisation rateThe rate that is applied to a property’s sustainable net

income at the end of an assumed holding period to derive

an estimated future market value

DecreaseIncrease

Rental growth rateThe annual growth rate applied to the market rent over an

assumed holding period

IncreaseDecrease

Unobservable inputs within the residual value approach

Gross development valueThe estimated market value once the redevelopment

is completed

IncreaseDecrease

Cost of developmentAn estimate of the costs associated with converting the

property to its end use, including finance costs and a

typical profit margin for risks assumed by the developer

DecreaseIncrease

Discount rateThe rate, determined through analysis of comparable

market-related sales transactions, that is applied to a

property’s future net cash flows to convert those cash

flows into a present value

DecreaseIncrease

Market capitalisation rateThe rate of return, determined through analysis of

comparable market-related sales transactions, that is

applied to the market rent to assess a property’s value

DecreaseIncrease

Unobservable inputs within the direct sales comparison approach

Rate per sqmThe rate per square metre of recently sold properties of a

similar nature

IncreaseDecrease

Unobservable inputs within market value alternative use (MVAU) plus holding costs

Rate per sqm prior to holding costsThe assumed rate per square metre, based on recently

sold properties, for which the group would acquire land,

assuming it had not been designated for its existing use

IncreaseDecrease

Holding costs per sqmThe costs of holding land while being developed to achieve

land suitable for airport use

IncreaseDecrease

Holding periodThe expected holding period to achieve land suitable for

airport use

IncreaseDecrease

Unobservable inputs within optimised depreciated replacement cost (ODRC)

Unit costs of constructionThe costs of constructing various asset types based on

a variety of sources, including recent local competitively

tendered construction works, published cost information,

the valuer’s database of costing information and

experience of typical industry rates and indexed historical

cost information

IncreaseDecrease

11. Property, plant and equipment CONTINUED

Auckland International Airport Limited

59
Financial statements

12. Investment properties

The table below summarises the movements in fair value of investment properties:

Retail and

serviceIndustrial

Vacant

landOtherTotal

$M$M$M$M$M

Year ended 30 June 2023

Balance at the beginning of the year328.81,879.8466.9221.92,897.4

Additions45.278.12.20.4125.9

Transfers from/(to) property, plant and

equipment (note 11)(10.3)1.4(5.1)-(14.0)

Transfers within investment property47.520.0(39.5)(28.0)-

Investment property fair value change(5.2)(122.7)11.3(23.1)(139.7)

Lease incentives capitalised-0.5-1.21.7

Lease incentives amortised-(0.6)-(0.1)(0.7)

Spreading of fixed rental increases0.49.6-1.511.5

Net carrying amount

406.41,866.1435.8173.82,882.1

Year ended 30 June 2022

Balance at the beginning of the year301.51,709.4414.3216.22,641.4

Additions8.131.3-0.139.5

Transfers from/(to) property, plant and

equipment (note 11)(2.1)7.0(4.2)-0.7

Transfers within investment property-2.1(2.2)0.1-

Write-offs-----

Investment property fair value change20.8119.059.05.6204.4

Lease incentives capitalised0.47.8--8.2

Lease incentives amortised-(2.3)-(0.1)(2.4)

Spreading of fixed rental increases0.15.5--5.6

Net carrying amount

328.81,879.8466.9221.92,897.4

Additions for the year ended 30 June 2023 include capitalised interest of $2.7 million (2022: $0.8 million).

The group’s investment properties are all categorised as Level 3 in the fair value hierarchy, as described in note 2(e). During the year,

there were no transfers of investment property between levels of the fair value hierarchy.

The basis of valuation is market value, based on each property’s highest and best use. The valuation methodologies used were a

direct sales comparison or a direct capitalisation of rental income, using market comparisons of capitalisation rates, supported by

a discounted cash flow approach. Further details of the valuation methodologies and sensitivities are included in note 11(c). The

valuation methodologies are consistent with prior years.

All valuations have been reviewed by the group's property management team, which have determined the valuations to be

appropriate as at 30 June 2023.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

60

The principal assumptions used in establishing the valuations were as follows:

20232022

Asset classification and

valuation approach

Inputs used to measure fair value

Range of

significant

inputs

Weighted

average

Range of

significant

inputs

Weighted

average

Retail and service

Discounted cash flow cross-

referenced to a market

capitalisation of net revenues as

indicated by market activity from

comparable transactions

Market rent (per sqm)$55 – $773$277

$145 –

$588

$277

Market capitalisation rate

3.34 –

7.80%

5.84%

4.25 –

7.00%

5.33%

Terminal capitalisation rate

4.75 –

8.00%

6.19%

4.50 –

7.25%

5.65%

Discount rate

6.75 –

8.50%

7.60%

6.00 –

7.75%

6.80%

Rental growth rate (per annum)

2.03 –

3.05%

2.82%

2.02 –

2.99%

2.76%

Industrial

Discounted cash flow cross-

referenced to a market

capitalisation of net revenues as

indicated by market activity from

comparable transactions

Market rent (per sqm)

$159 –

$344

$189

$130 –

$310

$162

Market capitalisation rate

4.18 –

6.59%

5.25%

3.58 –

6.00%

4.32%

Terminal capitalisation rate

4.38 –

7.00%

5.56%

3.68 –

6.25%

4.65%

Discount rate

6.50 –

8.75%

7.40%

5.75 –

7.75%

6.33%

Rental growth rate (per annum)

2.50 –

3.05%

3.01%

2.50 –

2.99%

2.94%

Vacant land

Direct sales comparison and

residual value

Rate per sqm$7 – 1,153$194$7 – 1,153$200

Other

Discounted cash flow cross-

referenced to a market

capitalisation of net revenues as

indicated by market activity from

comparable transactions

Market rent (per sqm)$59 – $424$305$35 – $424$287

Market capitalisation rate

4.32 –

7.04%

5.70%

3.94 –

6.50%

5.04%

Terminal capitalisation rate

4.63 –

7.37%

6.11%

4.25 –

6.75%

4.90%

Discount rate

6.50 –

8.50%

7.53%

6.00 –

8.00%

6.26%

Rental growth rate (per annum)

0.45 –

3.05%

2.56%

2.50 –

2.93%

2.34%

12. Investment properties CONTINUED

Auckland International Airport Limited

61
Financial statements

The fair value of investment properties valued by each independent registered valuer is outlined below:

20232022

$M$M

Colliers International846.9898.0

Savills Limited817.91,022.4

Jones Lang LaSalle Limited1,047.4905.4

Investment property carried at cost169.971.6

Total fair value of investment properties

2,882.12,897.4

The investment properties assigned to valuers are rotated across the portfolio every three years, with the most recent

rotation occurring in June 2022. All valuers are registered valuers and industry specialists in valuing the above types of

investment properties.

The table below summarises income and expenses related to investment properties:

20232022

$M$M

Rental income for investment properties114.095.3

Recoverable cost income10.67.9

Direct operating expenses for investment properties that derived rental income(12.6)(9.6)

Direct operating expenses for investment properties that did not derive rental income(3.8)(2.3)

The following categories of investment property are leased to tenants:

•Retail and service carried at $406.4 million (30 June 2022: $328.8 million);

•Industrial carried at $1,866.1 million (30 June 2022: $1,879.8 million); and

•Other investment property carried at $173.8 million (30 June 2022: $221.9 million).

The above values include the land associated with these properties.

13. Cash and cash equivalents

20232022

$M$M

Short-term deposits99.622.9

Cash and bank balances6.61.8

Total cash and cash equivalents

106.224.7

Cash and bank balances earn interest at daily bank deposit rates. During the year, surplus funds were deposited on the overnight

money market at a rate of 1.85% to 6.00% (2022: at a rate of 0.25% to 2.00%).

At 30 June 2023, Auckland Airport held total cash and cash equivalents of $106.2 million (2022: $24.7 million). The short-term

deposits at 30 June 2023 ranged from $15.0 million to $35.0 million and were spread across four financial institutions to minimise

credit risk, with those being ASB Bank, Bank of China, Bank of New Zealand and Westpac (2022: $10.0 million to $13.0 million

across two financial institutions). These financial institutions had a credit rating of 'A' or above from Standard & Poor's. The level of

deposits at each financial institution recognises a balance between returns and credit risk.

Further details of Auckland Airport's credit risk objectives and policies is available in note 18(d).

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

62

14. Trade and other receivables

20232022

$M$M

Trade receivables16.65.1

Less: Expected credit losses(0.4)(2.8)

Net trade receivables16.22.3

Prepayments8.77.0

GST receivable4.40.4

Revenue accruals and other receivables22.318.8

Total trade and other receivables

51.628.5

Allowance for impairment

Trade receivables have general payment terms of the 1st or the 20th of the month following invoice. The group has assessed

its expected credit losses including a general provision based on lifetime expected losses combined with specific provisions for

individual debtors where there is evidence that the group will not be able to collect the receivable (refer note 2(k)).

15. Issued and paid-up capital

2023202220232022

$M$MSharesShares

Opening number issued and paid-up capital at 1 July1,680.21,679.21,472,195,1311,472,034,637

Shares fully paid and allocated to employees by employee

share scheme0.60.684,210102,300

Shares vested for employees participating in long-term

incentive plans-0.4-58,194

Closing issued and paid-up capital at 30 June

1,680.81,680.21,472,279,3411,472,195,131

All issued shares are fully paid and have no par value. The company does not limit the amount of authorised capital.

Each ordinary share confers on the holder one vote at any shareholder meeting of the company and carries the right to dividends.

Dividend reinvestment plan

The company has a dividend reinvestment plan. Under the plan, shareholders can elect to receive the value of their dividends in

additional shares. The company considers whether the plan will apply to a dividend at each dividend announcement. Shares issued

in lieu of dividends are excluded from dividends paid in the statement of cash flows. As mentioned in note 9, no dividends were paid

during the year ended 30 June 2023.

Share-based payment plans

As members of the group, the shares held by the Employee Share Purchase Plan and the Executive Long-Term Incentive Plan

are eliminated from the group’s issued and paid-up capital. When those shares are transferred out of the plans and vested to

employees, they are recognised as an increase in issued and paid-up capital. Refer to note 23 – Share-based payment plans.

Auckland International Airport Limited

63
Financial statements

16. Reserves

(a) Cancelled share reserve

20232022

$M$M

Balance at 30 June

(609.2)(609.2)

The cancelled share reserve records the premium above paid-up share capital incurred on the return of capital to shareholders and

on-market buy-backs of ordinary shares.

(b) Property, plant and equipment revaluation reserve

20232022

$M$M

Balance at 1 July5,040.25,099.9

Reclassification to retained earnings(10.1)(7.0)

Revaluation218.675.8

Flood-related fixed asset impairments(21.0)-

Movement in deferred tax(40.4)(128.5)

Balance at 30 June

5,187.35,040.2

The property, plant and equipment revaluation reserve records the revaluation of land, buildings and services, infrastructure,

runway, taxiways and aprons. The $197.6 million increase in revaluation reserve, during the year ended 30 June 2023, includes a

$165.6 million increase in infrastructure, runways, taxiways and aprons less $21.0 million of flood-related impairments to buildings

and services, all of which are subject to deferred tax. Land increased by $53.0 million with no tax impact (2022: $383.7 million

increase in land with no tax impact).

(c) Share-based payments reserve

20232022

$M$M

Balance at 1 July2.12.0

Long-term incentive plan expense0.5(0.1)

Reclassification to retained earnings on LTI not vested(0.6)-

Movement in deferred tax-0.2

Balance at 30 June

2.02.1

The share-based payments reserve records the value of historical equity-settled share-based payments provided to employees,

including key management personnel, as part of their remuneration.

(d) Cash flow hedge reserve

20232022

$M$M

Balance at 1 July17.7(50.4)

Fair value change in hedging instrument19.185.5

Transfers to the income statement relating to:

Hedged transactions in the income statement0.29.1

Movement in deferred tax(5.4)(26.5)

Balance at 30 June

31.617.7

The cash flow hedge reserve records the effective portion of the fair value of interest rate swaps that are designated as cash flow

hedges. Amounts transferred to the income statement are included in interest expense and other finance costs.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

64

(e) Cost of hedging reserve

20232022

$M$M

Balance at 1 July(1.7)(1.1)

Change in currency basis spreads (when excluded from designated hedges)-(0.8)

Movement in deferred tax-0.2

Balance at 30 June

(1.7)(1.7)

The cost of hedging reserve captures changes in the fair value of the cost to convert foreign currency to NZD of Auckland Airport’s

cross-currency interest rate swaps.

(f) Share of reserves of associate and joint ventures

20232022

$M$M

Balance at 1 July50.937.0

Share of reserves of associate and joint ventures11.213.9

Balance at 30 June

62.150.9

The share of reserves of associate and joint ventures records the group’s share of movements in the cash flow hedge reserve

and the property, plant and equipment revaluation reserve of the associate and joint ventures. The cash flow hedge reserve of the

associate and joint ventures records the effective portion of the fair value of interest rate swaps that are designated as cash flow

hedges. Amounts transferred to the income statement of the associate and joint ventures are included in the share of profit of the

associate and joint ventures.

17. Accounts payable and accruals

20232022

$M$M

Employee entitlements10.39.5

Property, plant and equipment retentions and payables64.224.8

Investment property retentions and payables23.36.9

Trade payables12.510.4

Interest payables15.29.6

Other payables and accruals34.425.9

Total accounts payable and accruals

159.987.1

The amount owing to the related parties at 30 June 2023 is $2.6 million (2022: $7.7 million), refer note 22.

16. Reserves CONTINUED

Auckland International Airport Limited

65
Financial statements

18. Financial assets and liabilities

20232022

Notes$M$M

Current financial assets

Financial assets at amortised cost

Cash and cash equivalents13106.224.7

Trade and other receivables38.521.1

144.745.8

Derivative financial instruments

Interest rate swaps - cash flow hedges1.5-

Forward exchange contracts0.1-

Total current financial assets146.345.8

Non-current financial assets

Derivative financial instruments

Interest rate swaps – cash flow hedges45.028.1

45.028.1

Total non-current financial assets45.028.1

Total financial assets191.373.9

Current financial liabilities

Financial liabilities at amortised cost

Accounts payable and accruals17159.987.1

Short-term borrowings18(a)428.8515.6

Provisions217.56.5

596.2609.2

Derivative financial instruments

Interest rate swaps – cash flow hedges-0.9

Total current financial liabilities596.2610.1

Non-current liabilities

Financial liabilities at amortised cost

Term borrowings18(a)1,388.3961.0

Other term liabilities3.53.3

1,391.8964.3

Derivative financial instruments

Interest rate swaps – cash flow hedges-2.4

Interest rate swaps – fair value hedges11.68.3

Cross-currency interest rate swaps13.75.0

Total non-current financial liabilities1,417.1980.0

Total financial liabilities2,013.31,590.1

The cross-currency interest rate swaps consist of both a fair value hedge component and a cash flow hedge component.

Amounts subject to potential offset

The group’s derivative financial instruments are subject to enforceable master netting arrangements. Each agreement allows the

parties to elect net settlement of the relevant financial assets and liabilities in the event of default of the other party. The group's

financial statements do not offset assets and liabilities with the same counterparties. Instead, it reports each derivative as either

an asset or liability. However, if offsets were enforced by either party, the potential net amounts (assets less liabilities) would be

derivative financial assets of $21.3 million (2022: derivative financial assets of $11.5 million).

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

66

(a) Borrowings

At the balance date, the following borrowings were in place for the group:

20232022

MaturityCoupon

1

$M$M

Current

Commercial paper< 3 monthsFloating166.8142.6

Bank facility20-11-2022Floating-73.0

Bank facility1-10-2023Floating37.0-

Bonds11-10-2022Floating-100.0

Bonds9-11-20224.28%-100.0

Bonds17-04-20233.64%-100.0

Bonds2-11-20233.97%225.0-

Total short-term borrowings

428.8515.6

Non-current

Bank facility31-07-2023Floating-28.0

Bank facility1-10-2023Floating-37.0

Bank facility16-08-2024Floating100.0100.0

Bank facility3-11-2025Floating103.0-

Bonds2-11-20233.97%-225.0

Bonds10-10-20243.51%150.0150.0

Bonds13-10-2025Floating150.0-

Bonds17-04-2026Floating100.0-

Bonds9-05-20285.67%225.1-

Bonds17-11-20263.29%139.1141.2

Bonds17-11-20285.29%150.0-

AMTN notes

2

23-09-20274.50%271.1279.8

Total term borrowings

1,388.3961.0

Total

Commercial paper166.8142.6

Bank facilities240.0238.0

Bonds1,139.2816.2

AMTN notes271.1279.8

Total borrowings

1,817.11,476.6

1The coupon interest rate is the interest rate received by the group's lenders and does not reflect the group’s total cost of borrowing. The group's total cost of

borrowing may be higher or lower than the coupon, reflecting the impacts of hedging and amortised transaction costs.

2The AMTN notes are denominated in Australian dollars.

18. Financial assets and liabilities CONTINUED

Auckland International Airport Limited

67
Financial statements

Movement in borrowings

20232022

$M$M

Total borrowings at the beginning of the year

1,476.61,392.8

Decrease in borrowings during the year(401.0)(72.0)

Increase in borrowings during the year752.2200.6

Amortisation of premium received for issue at non-market rates(0.5)(0.7)

Revaluation of foreign denominated debt for changes in FX rate(4.6)8.4

Revaluation of debt in fair value hedge relationship(5.6)(52.5)

Total borrowings at the end of the year

1,817.11,476.6

Bank facilities

Borrowings under the drawn bank facilities and standby bank

facilities are supported by a negative pledge deed.

In the year ended 30 June 2023, the group undertook the

following bank finance activity:

•In November 2022 the company entered into the following

new bank facilities:

◦A $125 million three-year facility with Commonweath

Bank of Australia;

◦A $125 million four-year facility with Commonweath Bank

of Australia;

◦A $125 million four-year facility with China Construction

Bank Corporation; and

◦A $50 million three-year facility with MUFG Bank, Ltd.

•The following facilities either matured or were cancelled:

◦The AU$90 million facility with Commonweath Bank of

Australia matured in November 2022.

◦The $95 million facility with China Construction Bank

Corporation matured in November 2022.

◦The $50 million facility with MUFG Bank, Ltd set to

mature in February 2023 was cancelled.

•The two $195 million bank facilities with MUFG Bank, Ltd

and Westpac New Zealand Limited were both reduced to

$110 million.

The net effect of the above bank refinancing activity was an

increase in total available facilities of $10 million.

Bonds and notes

Borrowings under the bond programme are supported by a

master trust deed. They are unsecured and unsubordinated.

In the year ended 30 June 2023, the group undertook the

following bond financing:

•The issuance of $150.0 million of three-year floating rate

notes in October 2022 which was used to refinance

the maturing $100 million floating rate notes and provide

additional liquidity;

•The issuance of $225.0 million of 5.5-year, 5.67% fixed rate

bonds in November 2022, which was used to refinance

the maturing $100 million fixed rate bonds and provide

additional liquidity;

•The issuance of $100.0 million of three-year floating rate

notes in April 2023 which was used to refinance the

maturing $100 million fixed rate bonds; and

•The issuance of $150.0 million of 5.5-year, 5.29% in May

2023 which was used to provide additional liquidity.

The carrying amount of AMTN notes has reduced due to

interest rate movements. The foreign currency exposure is fully

hedged by cross-currency interest rate swaps, which have

similarly reduced in value.

During the current and prior periods, there were no defaults

or breaches on any of the borrowing facilities. The group has

negotiated modified interest coverage covenants applying from

calendar year 2022 onwards. The EBITDA-based measures

step up progressively, broadly in line with the anticipated

COVID-19 recovery. The interest coverage covenants are

summarised in note 3(d).

(b) Hedging activity and derivatives

Cash flow hedges

At 30 June 2023, the group held interest rate swaps where

it pays a fixed rate of interest and receives a variable rate

on the notional amount (in NZD). The notional amount of the

interest rate swaps in a cash flow hedge at 30 June 2023

is $1,065.0 million (2022: $1,145.0 million). These interest

rate swaps are designated as cash flow hedges of the

future variable interest rate cash flows on existing and future

bank facilities, commercial paper and floating rate bonds. The

interest payment frequency on these borrowings is quarterly.

For cash flow hedges, the effective part of the changes

in fair value of the hedging derivative are deferred in other

comprehensive income and are transferred to the income

statement when the hedged item affects the income statement.

Any gain or loss relating to the ineffective portion of the hedging

instrument in cash flow hedge relationships are recognised in

the income statement.

During the year, the group assessed the remaining cash flow

hedges to be highly effective and therefore it continues to

qualify for hedge accounting.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

68

Cross-currency swaps

The cross-currency interest rate swaps transform a series of

known fixed interest rate cash flows in a foreign currency to

floating rate NZD cash flows, mitigating exposure to fair value

changes in the AMTN notes.

For hedge accounting purposes, these swaps are aggregated

and designated as two cash flow hedges and a fair value

hedge. The fair value component transforms Australian fixed

interest rates to Australian floating interest rates, respectively.

The change in the fair value of the hedged risk is attributed

to the carrying value of the AMTN debt. This debt revaluation

is recognised in the income statement to offset the mark-to-

market revaluation of the hedging derivative.

The cross-currency basis element of the cross-currency interest

rate swaps are excluded from the hedge designation and are

separately recognised in other comprehensive income in a

cost of hedging reserve. Additional detail on the treatment of

the basis component can be found in note 16(e) – Cost of

hedging reserve.

The cash flow components are hedge accounted as described

above under Cash flow hedges.

At inception, each hedge relationship is formalised in hedge

documentation. Hedge accounting is discontinued when the

hedge instrument expires or is sold, terminated, exercised or

no longer qualifies for hedge accounting. Auckland Airport

determines the existence of an economic relationship between

the hedging instrument and the hedged item based on the

currency, amount and timing of respective cash flows, reference

interest rates, tenors, repricing dates, maturities and notional

amounts. Auckland Airport assesses whether the derivative

designated in each hedging relationship is expected to be, and

has been, effective in offsetting the changes in cash flows of

the hedged item using the hypothetical derivative method.

Derivatives in hedge relationships are designated based on a

hedge ratio of 1:1. In these hedge relationships the main source

of ineffectiveness is the effect of the counterparty and Auckland

Airport’s own credit risk on the fair value of the derivatives,

which is not reflected in the change in the fair value of the

hedged item attributable to changes in foreign exchange and

interest rates.

Gains or losses on the fixed interest bonds, derivatives and

AMTN notes in a hedging relationship with fair value hedges

recognised in the income statement in interest expense during

the period were:

20232022

$M$M

Gains/(losses) on the AMTN notes8.135.4

Gains/(losses) on the bonds2.18.7

Gains/(losses) on the derivatives(10.7)(42.6)

Gains or losses on the ineffective hedging component of the swaps recognised in the income statement relating to counterparty risk

during the period were:

20232022

$M$M

Credit valuation adjustments on hedges qualifying for hedge accounting(0.7)1.7

Derivative fair value change

(0.7)1.7

18. Financial assets and liabilities CONTINUED

Auckland International Airport Limited

69
Financial statements

The details of the hedging instruments as at 30 June 2023 and 30 June 2022 are as follows:

Currency

Average

rate

Maturity

(years)

Notional amount

of hedging

instrument

Statement of

financial position

line item

Carrying amount of the

hedging instrument

Change in value

used for calculating

hedge effectiveness

AssetsLiabilities

As at 30 June 2023M$M$M$M

Cash

flow hedges

Interest rate swapsNZD3.41%1 – 6NZ$1,065.0

Derivative

financial

instruments

46.5-45.2

Fair value and

cash flow hedges

Interest rate swapsNZDFloating3 – 5NZ$375.0

Derivative

financial

instruments

-11.6(10.9)

Cross-currency

swaps

NZD:AUDFloating4AU$260.0

Derivative

financial

instruments

-13.7(13.1)

Net hedging

instruments

46.525.321.2

Currency

Average

rate

Maturity

(years)

Notional amount

of hedging

instrument

Statement of

financial position

line item

Carrying amount of the

hedging instrument

Change in value

used for calculating

hedge effectiveness

AssetsLiabilities

As at 30 June 2022M$M$M$M

Cash

flow hedges

Interest rate swapsNZD3.47%1 – 7NZ$1,145.0

Derivative

financial

instruments

28.13.226.9

Fair value and

cash flow hedges

Interest rate swapsNZDFloating4NZ$150.0

Derivative

financial

instruments

-8.4(8.4)

Cross-currency

swaps

NZD:AUDFloating5AU$260.0

Derivative

financial

instruments

-5.0(4.7)

Net hedging

instruments

28.116.613.8

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

70

All hedging instruments can be found in the derivative financial

instrument’s assets and liabilities in the statement of financial

position. Items taken to the income statement have been

recognised in the derivative fair value (decrease)/increase.

The details of hedged items as at 30 June 2023 and 30 June

2022 are as follows:

Statement of

financial

position line

item

Carrying amount of

the hedged item

Accumulated amount of fair value

hedge adjustments on the hedged

item included in the carrying amount

of the hedged item

Change in value

used for

calculating

hedge

effectivenessAssetsLiabilitiesAssetsLiabilities

As at 30 June 2023$M$M$M$M$M

Cash flow hedges

Aggregated variable interest

rate exposure

Short-term/

Term

borrowings

-640.0--(30.7)

Highly probable forecast variable

rate debt

-----(15.7)

Fair value hedges

Aggregated variable interest

rate exposure

Term

borrowings

-364.2-(10.8)11.0

Fair value and cash

flow hedges

AMTN notes (AU$260 million)

Term

borrowings

-271.1-(15.7)11.9

Net hedged items

-1,275.3-(26.5)(23.5)

Statement of

financial

position line

item

Carrying amount of

the hedged item

Accumulated amount of fair value

hedge adjustments on the hedged

item included in the carrying amount

of the hedged item

Change in value

used for

calculating

hedge

effectiveness

AssetsLiabilitiesAssetsLiabilities

As at 30 June 2022$M$M$M$M$M

Cash flow hedges

Aggregated variable interest

rate exposure

Short-term/

Term

borrowings

-900.0--(7.1)

Highly probable forecast variable

rate debt

-----(21.1)

Fair value hedges

Aggregated variable interest

rate exposure

Term

borrowings

-141.3-(8.7)8.6

Fair value and cash

flow hedges

AMTN notes (AU$260 million)

Term

borrowings

-279.8-(7.6)3.5

Net hedged items

-1,321.1-(16.3)(16.1)

18. Financial assets and liabilities CONTINUED

Auckland International Airport Limited

71
Financial statements

(c) Fair value

There have been no transfers between levels of the fair value

hierarchy as described in note 2(e) in the year ended 30 June

2023 (2022: nil).

The carrying value closely approximates the fair value of cash,

accounts receivable, dividend receivable, other non-current

assets, accounts payable and accruals, provisions and other

term liabilities. The carrying amount of the group’s current

and non-current borrowings issued at floating rates closely

approximates their fair value.

The group’s bonds are classified as Level 1 as described

in note 2(e). The fair value of the bonds is based on the

quoted market prices for these instruments at balance date.

The group’s AMTN notes are classified as Level 2. The fair

value of the AMTN notes has been determined at balance date

on a discounted cash flow basis using the AUD Bloomberg

curve and applying discount factors to the future AUD interest

payment and principal payment cash flows.

20232022

Carrying

amount

Fair

value

Carrying

amount

Fair

value

$M$M$M$M

Bonds1,139.21,145.2816.2816.5

AMTN notes271.1277.7279.8285.0

The group’s derivative financial instruments are interest rate

swaps and cross-currency interest rate swaps. They arise

directly from raising finance for the group’s operations. All

the derivative financial instruments are hedging instruments for

financial reporting purposes.

The group’s derivative financial instruments are classified as

Level 2. The future cash flows are estimated using the key

inputs presented in the table alongside. The cash flows

are discounted at a rate that reflects the credit risk of

various counterparties.

InstrumentValuation key inputs

Interest rate

swaps

Forward interest rates (from observable

yield curves) and contract interest rates

Basis swapsObservable forward basis swap pricing

and contract basis rates

Cross-currency

interest rate

swaps

Forward interest and foreign exchange

rates (from observable yield curves

and forward exchange rates) and

contract rates

(d) Financial risk management objectives and

policies

(i) Credit risk

The group’s maximum exposure to credit risk at 30 June 2023

is equal to the carrying value of cash, accounts receivable,

dividends receivable and derivative financial instruments.

Credit risk is managed by restricting the amount of cash

and marketable securities that can be placed with any one

institution, which will be either the New Zealand Government

or a New Zealand registered bank with an appropriate

international credit rating. The group minimises its credit risk

by spreading such exposures across a range of institutions,

with Standard & Poor's credit ratings of 'A' or above (2022: 'A'

or above).

The group’s credit risk is also attributable to accounts

receivable, which principally comprise amounts due from

airlines, tenants and retail licensees. At 30 June 2023, the

group identified $0.4 million of accounts receivable relating to

customers who are at risk of not being able to meet their

payment obligations (2022: $2.8 million), refer to note 14.

The group has a policy that manages exposure to credit risk

by way of requiring a performance bond for material lease

contracts or other customers whose credit rating or history

indicates that this would be prudent. The value of performance

bonds for the group is $3.5 million (2022: $3.3 million).

(ii) Liquidity risk

The group’s objective is to maintain a balance between

continuity of funding and flexibility through the use of

borrowings on the money market, bank loans, commercial

paper, AMTN notes and bonds.

To manage the liquidity risk, the group’s policy is to maintain

sufficient available funding by way of committed, but undrawn,

debt facilities. As at 30 June 2023, this undrawn facility

headroom was $963.0 million (2022: $954.5 million). The

group’s policy also requires the spreading of debt maturities.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

72

Bank facilities

During the year ended 30 June 2023, the group extended the maturity dates for a number of bank facilities as illustrated in the table

below. All bank facilities are multi-currency facilities.

20232022

Type : Multi-currency facilityMaturityFacilityAvailableDrawnUndrawnAvailableDrawnUndrawn

Bank(June 2023)currencyNZ $MNZ $MNZ $MNZ $MNZ $MNZ $M

ANZ Bank New Zealand31-07-2023NZD100.0-100.0100.0-100.0

Bank of China (New

Zealand) Ltd31-07-2023

NZD28.0--28.028.0-

Bank of New Zealand24-04-2025NZD150.0-150.0150.0-150.0

China Construction Bank

Corporation Ltd16-11-2022

NZD---95.073.022.0

China Construction Bank

Corporation Ltd3-04-2024

NZD30.0-30.030.0-30.0

China Construction Bank

Corporation Ltd

15-11-2026

NZD125.0-125.0---

Commonwealth Bank

of Australia30-11-2022

AUD---99.5-99.5

Commonwealth Bank

of Australia3-11-2025

NZD125.0103.050.0---

Commonwealth Bank

of Australia3-11-2026

NZD125.0-125.0---

Mizuho Bank, Ltd. Sydney

Branch OBU1-10-2023

NZD70.037.033.070.037.033.0

Mizuho Bank, Ltd. Sydney

Branch OBU26-07-2024

NZD100.0100.0-100.0100.0-

MUFG Bank, Ltd.28-02-2023NZD---50.0-50.0

MUFG Bank, Ltd.31-10-2023NZD110.0-110.0195.0-195.0

MUFG Bank, Ltd.2-11-2025NZD50.0-50.0---

Westpac New Zealand Limited31-07-2023NZD80.0-80.080.0-80.0

Westpac New Zealand Limited31-10-2023NZD110.0-110.0195.0-195.0

Total

NZD

equivalent

1,203.0240.0963.01,192.5238.0954.5

The following liquidity risk disclosures reflect all undiscounted

principal repayments and interest payments resulting from

recognised financial liabilities and financial assets as at 30 June

2023. The timing of cash flows for liabilities is based on

the contractual terms of the underlying contract. Liquid

non-derivative assets comprising cash and receivables are

considered in the group’s overall liquidity risk. The group

ensures that sufficient liquid assets or committed funding

facilities are available to meet all the required short-term cash

payments and expects borrowings to roll over.

18. Financial assets and liabilities CONTINUED

Auckland International Airport Limited

73
Financial statements

Undiscounted cash flows on financial assets and liabilities

Carrying

amount

Contractual

cash flows< 1 year1 to 3 years3 to 5 years> 5 years

$M$M$M$M$M$M

Year ended 30 June 2023

Financial assets

Cash and cash equivalents106.2106.2106.2---

Accounts receivable38.538.538.5---

Derivative financial assets46.651.913.525.112.01.4

Total financial assets

191.3196.6158.225.112.01.4

Financial liabilities

Accounts payable, accruals

and other term liabilities(170.9)(170.9)(170.9)---

Commercial paper(166.8)(168.0)(165.6)---

Bank facilities(240.0)(272.8)(37.0)(203.0)--

Bonds(1,139.2)(1,328.0)(225.0)(400.0)(375.0)(150.0)

AMTN notes(271.1)(341.3)--(283.0)-

Derivative financial liabilities(25.3)(33.0)(13.2)(16.9)(2.8)-

Interest payable--(84.9)(118.9)(63.8)(4.0)

Total financial liabilities

(2,013.3)(2,314.0)(696.6)(738.8)(724.6)(154.0)

Year ended 30 June 2022

Financial assets

Cash and cash equivalents24.724.724.7---

Accounts receivable21.121.121.1---

Derivative financial assets28.132.32.113.212.44.6

Total financial assets

73.978.147.913.212.44.6

Financial liabilities

Accounts payable, accruals

and other term liabilities(96.9)(96.9)(96.9)---

Commercial paper(142.6)(143.0)(142.2)---

Bank facilities(238.0)(253.5)(73.0)(165.0)--

Bonds(816.3)(881.1)(300.0)(375.0)(150.0)-

AMTN notes(279.8)(358.6)---(287.5)

Derivative financial liabilities(16.6)(22.6)(6.8)(12.4)(8.9)5.4

Interest payable--(48.5)(55.4)(33.2)(6.5)

Total financial liabilities

(1,590.2)(1,755.7)(667.4)(607.8)(192.1)(288.6)

(iii) Interest rate risk

The group’s exposure to market risk from changes in interest

rates relates primarily to the group’s borrowings. Borrowings

issued at variable interest rates expose the group to changes

in interest rates. Borrowings issued at fixed rates expose the

group to changes in the fair value of the borrowings.

The group’s policy is to manage its interest rate exposure

using a mix of fixed and variable rate debt and interest rate

derivatives that are accounted for as cash flow hedges or fair

value hedges. The group’s policy is to keep its exposure to

borrowings at fixed rates of interest between parameters set

out in the group’s treasury policy. At year end, 63.2% (2022:

71.5%) of the borrowings (including the effects of the derivative

financial instruments and cash and funds on deposit) were

subject to fixed interest rates, which are defined as borrowings

with an interest reset date greater than one year. The hedged

forecast future interest payments are expected to occur at

various dates between one month and six years from 30 June

2023 (2022: one month and seven years).

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

74

At balance date, the company had the following mix of financial assets and liabilities exposed to New Zealand variable interest rate

risk after considering hedging instruments:

20232022

$M$M

Financial assets

Cash and cash equivalents106.224.7

106.224.7

Financial liabilities

Bonds swapped to floating225.0150.0

Bank facilities56.058.0

Commercial paper97.057.6

AMTN notes159.5159.5

537.5425.1

Net exposure

431.3400.4

Interest rate sensitivity

The following table demonstrates the sensitivity to a change in

floating interest rates of plus and minus 10 basis points, with all

other variables held constant, of the company’s profit before tax

and equity:

20232022

$M$M

Increase in interest rates of 10 basis points

Effect on profit before taxation(0.4)(0.4)

Effect on equity before taxation4.03.3

Decrease in interest rates of 10 basis points

Effect on profit before taxation0.40.4

Effect on equity before taxation(4.0)(3.4)

Significant assumptions used in the interest rate sensitivity

analysis include the following:

•Effect on profit before tax and effect on equity is based

on net floating rate debt and funds on deposit as at

30 June 2023 of $431.3 million (2022: $400.4 million).

Interest rate movements of plus and minus 10 basis points

have been applied to this floating rate debt to demonstrate

the sensitivity to interest rate risk; and

•Effect on equity is the movement in the valuation of

derivatives that are designated as cash flow hedges due

to an increase or decrease in interest rates. All derivatives

that are effective as at 30 June 2023 are assumed to

remain effective until maturity. Therefore, any movements

in these derivative valuations are taken to the cash flow

hedge reserve within equity and they will reverse entirely by

maturity date.

(iv) Foreign currency risk

During the years ended 30 June 2023 and 30 June 2022,

the group was exposed to foreign currency risk with respect

to the Australian dollar arising from Australian Medium Term

Notes ('AMTN'). This exposure has been fully hedged by way

of cross-currency interest rate swaps hedging both principal

and interest.

The cross-currency interest rate swaps correspond in amount

and maturity to the relevant borrowings with no residual foreign

currency risk exposure.

The cross-currency interest rate swaps consist of a fair value

hedge component and a cash flow hedge component. The

effective movements on the fair value hedge component are

taken to the income statement along with all movements of the

hedged risk on the AMTN notes. The effective movements of

the cash flow hedge components are all taken to the cash flow

hedge reserve.

The net exposure at balance date is representative of what the

group was and is expecting to be exposed to in the next 12

months from balance date.

The following sensitivity analysis is based on the foreign

currency risk exposure to the Australian dollar in existence at

30 June 2023. Had the New Zealand dollar moved either up

or down by 10%, with all other variables held constant, profit

before taxation and equity before taxation would have been

affected as follows:

18. Financial assets and liabilities CONTINUED

Auckland International Airport Limited

75
Financial statements

20232022

$M$M

Increase in value of NZ dollar of 10%

Impact on profit before taxation--

Impact on equity before taxation(0.2)(0.5)

Decrease in value of NZ dollar of 10%

Impact on profit before taxation--

Impact on equity before taxation0.30.6

Significant assumptions used in the foreign currency exposure

sensitivity analysis include the following:

•Reasonably possible movements in foreign exchange rates

were determined based on a review of the last two years'

historical movements. A movement of plus or minus 10%

has been applied to the exchange rates to demonstrate the

sensitivity to foreign currency risk of the company’s debt and

associated derivative

financial instruments; and

•The sensitivity was calculated by taking the spot rate

as at balance date of 0.91885 for AUD (2022: 0.90445)

and moving this spot rate by the reasonably possible

movements of plus or minus 10% and then reconverting

the foreign currency into NZD with the new spot rate.

This methodology

reflects the translation methodology

undertaken by the group.

(v) Capital risk management

The group’s objective is to maintain a capital structure mix

of shareholders’ equity and debt that achieves a balance

between ensuring the group can continue as a going concern

and providing a capital structure that maximises returns for

shareholders and reduces the cost of capital to the group.

The appropriate capital structure of the group is determined

from consideration of our target credit rating, comparison

to peers, sources of finance, borrowing costs, general

shareholder expectations, the ability to distribute surplus funds

efficiently, future business strategies and the ability to withstand

business shocks.

The group can maintain or adjust the capital structure

by adjusting the level of dividends, changing the level of

capital expenditure, issuing new shares, returning capital to

shareholders or selling assets to reduce debt. The group

monitors the capital structure on the basis of the gearing ratio

and by considering the credit rating of the company. In the year

to 30 June 2023, Auckland Airport continued with key capital

management initiatives including the cancellation of dividends

(note 9) to maintain the financial position of the group.

The gearing ratio is calculated as borrowings divided by

borrowings plus the market value of shareholders’ equity. The

gearing ratio as at 30 June 2023 is 12.0% (2022: 12.1%). The

current long-term credit rating of Auckland Airport by Standard

& Poor’s at 30 June 2023 is 'A- Stable Outlook' (2022: 'A-

Stable Outlook').

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

76

19. Commitments

(a) Property, plant and equipment

The group had contractual obligations to purchase or develop

property, plant and equipment for $560.3 million at 30 June

2023 (2022: $198.8 million). These include the development

of a new Transport Hub opposite the international terminal,

aeronautical works, and enabling works associated with the

integration of the domestic and international terminals.

(b) Investment property

The group had contractual obligations to either purchase,

develop, repair or maintain investment property for

$215.4 million at 30 June 2023 (2022: $34.3 million). These

include the development of the new premier outlet centre,

Mānawa Bay, alongside industrial developments.

(c) Joint ventures

During the year ended 30 June 2023, the Tainui Auckland

Airport Hotel 2 Limited Partnership (joint venture) tendered

a contract for the second and final phase of development

of a new Pullman Hotel. At 30 June 2023, the joint

venture's contractual obligations for the hotel development

were $12.7 million (30 June 2022: $82.0 million). The group's

share of those commitments was $6.4 million at 30 June 2023

(30 June 2022: $41.0 million).

(d) Operating lease receivable – group as

lessor

The group has commercial properties owned by the company

that produce rental income and retail concession agreements

that produce retail income.

These non-cancellable leases have remaining terms of between

one month and 28 years (2022: one month and 29 years). Most

leases with an initial period over three years include a clause to

enable upward revision of the rental charge on contractual rent

review dates according to prevailing market conditions.

A very small minority can be revised downwards under normal

trading conditions.

Future minimum rental and retail income receivable under non-

cancellable operating leases as at 30 June are as follows:

20232022

$M$M

Within one year244.3116.4

Between one and two years211.8103.9

Between two and three years105.495.6

Between three and four years97.487.6

Between four and five years79.678.7

After more than five years663.6740.0

Total minimum lease payments receivable

1,402.11,222.2

20. Contingent liabilities

Noise mitigation

Auckland Airport Designation 1100, contained in the Auckland

Unitary Plan, sets out the requirements for noise mitigation for

properties affected by aircraft noise. The conditions include

obligations on the company to mitigate the impact of aircraft

noise through the installation of noise mitigation packages to

existing dwellings and schools. The noise mitigation packages

provide treatment of dwellings to achieve an internal noise

environment of no more than 40dB. The company is required

to subsidise 100% of treatment costs for properties in the high

aircraft noise area and 75% in the medium aircraft noise area.

The aircraft noise contours included in Designation 1100 reflect

the long-term predicted aircraft noise levels generated by

aircraft operations from the existing runway and proposed

northern runway. Annually, the company projects the level of

noise that will be generated from aircraft operations for the

following 12 months. These annual projections confirm which

dwellings and schools are eligible for noise mitigation each year

and offers are sent out to those affected properties. It is at the

discretion of the individual landowner whether they accept a

noise mitigation package.

Projections are undertaken annually to determine eligibility, and

the rate of acceptance of offers of treatment by landowners is

variable. However, it is estimated that further costs on noise

mitigation should not exceed $7.6 million (2022: $7.8 million),

refer note 21.

Contractor claims

A contingent liability of $4.6 million (2022: $7.3 million) has

been recognised for contractor claims in respect of capital

works which are under ongoing independent assessment of

both entitlement and value. The group has taken a conservative

view and recognised as a contingent liability the total uncertified

contractor claims.

Auckland International Airport Limited

77
Financial statements

21. Provisions

Firefighting foam contaminated water and soil clean-up

Per and PolyFluoroalkyl Substances (PFAS) containing

firefighting foam has been widely used in the airport sector,

globally and throughout New Zealand. There is evidence

of varying levels of PFAS contaminated surface water and

sediment derived from historical firefighting foams used at

Auckland Airport. The group has provided for anticipated

remediation costs of $7.1 million (2022: $6.0 million).

Noise mitigation

Annual projections of aircraft noise levels determine

requirements for Auckland Airport to fund noise mitigation

packages for dwellings and schools affected by aircraft noise.

The company makes an annual offer to affected landowners

and, on acceptance of an offer, the group records a provision

for the estimated cost of installing that year’s mitigation

packages. The annual cost varies depending on the extent

of properties affected and the number of offers accepted. As

disclosed in note 20, it is estimated that further costs on noise

mitigation should not exceed $7.6 million (2022: $7.8 million).

Foam

disposal

Noise

mitigationTotal

$M$M$M

Year ended 30 June 2023

Opening balance6.00.56.5

Provisions made during the year1.20.11.3

Expenditure for the year(0.1)(0.2)(0.3)

Total provisions at year end

7.10.47.5

Year ended 30 June 2022

Opening balance0.20.50.7

Provisions made during the year5.90.26.1

Expenditure for the year(0.1)(0.2)(0.3)

Total provisions at year end

6.00.56.5

22. Related party disclosures

(a) Transactions with related parties

All trading with related parties, including and not limited to rentals and other sundry charges, has been made on an arm's-length

commercial basis, without special privileges, except for the provision of accounting and advisory services to Auckland International

Airport Marae Limited at no charge.

No guarantees have been given or received.

Auckland Council

Auckland Council is a significant shareholder of the company, with a shareholding in excess of 18% (2022: in excess of 18%).

On 28 October 2010, Auckland Airport and Manukau City Council came to an agreement where Auckland Airport agreed to

vest approximately 24 hectares of land in the north of the airport to the Council as public open space for the consideration of

$4.1 million. The vesting of the land will be triggered when building development in that precinct achieves certain levels.

The obligations and benefits of the agreement relating to Manukau City Council now rest with Auckland Council.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

78

Transactions with Auckland Council and its subsidiaries are as follows:

20232022

$M$M

Rates24.313.6

Building consent costs and other local government regulatory obligations1.81.5

Water, wastewater and compliance services2.71.8

Grounds maintenance-1.4

There was no amount owing to Auckland Council at 30 June 2023 (2022: $0.1 million).

Interest of directors in certain transactions

A number of the company’s directors are also directors of other companies, and a number of these companies transacted with

the group on normal commercial terms during the reporting period. Any transactions undertaken with these entities have been

entered into on an arm’s-length commercial basis, without special privileges. Material related party relationships are reported in the

tables below.

These transactions include the following:

20232022

$M$M

Fulton Hogan31.917.2

Hawkins41.52.9

Downer New Zealand Limited1.633.3

Amounts owing to related parties are as follows:

20232022

$M$M

Fulton Hogan2.52.6

Hawkins--

Downer New Zealand Limited0.15.0

The group's common director relationship with Downer New Zealand Limited and its subsidiary Hawkins ended on

31 January 2023.

Associate and joint ventures

Related party transactions with the following associate entities and joint ventures are disclosed at note 8:

•Tainui Auckland Airport Hotel Limited Partnership;

•Tainui Auckland Airport Hotel 2 Limited Partnership; and

•Queenstown Airport Corporation Limited.

One of the company's directors is also a director of Tainui Group Holdings, the joint venture partner in the above hotel partnerships.

22. Related party disclosures CONTINUED

Auckland International Airport Limited

79
Financial statements

(b) Key management personnel compensation

The table below includes the remuneration of directors and the senior management team:

20232022

Note$M$M

Directors' fees1.61.5

Senior management's salary and other short-term benefits6.46.2

Senior management's share-based payments23(b)-0.7

Senior management's termination benefits0.30.6

Total remuneration

8.39.0

23. Share-based payment plans

(a) Employee share purchase plan

The purchase plan is open to all full-time and part-time

employees (not directors) at an offer date. The company

advances to the purchase plan all the monies necessary to

purchase the shares under the purchase plan. The advances

are repayable by way of deduction from the employee's regular

remuneration. These advances are interest free.

The shares allocated under the purchase plan are held in trust

for the employees by the trustees of the purchase plan during

the restrictive period, which is the longer of three years or the

period of repayment by the employee of the loan made by the

trust to the employee in relation to the acquisition of shares.

Movement in ordinary shares allocated to employees under the purchase plan is as follows:

20232022

SharesShares

Shares held on behalf of employees

Opening balance255,730343,300

Shares issued during the year135,10038,410

Shares reallocated to employees-29,300

Shares fully paid and allocated to employees(84,210)(102,300)

Shares forfeited during the year(33,365)(52,980)

Total shares held on behalf of employees

273,255255,730

Unallocated shares held by the purchase plan78,84545,480

Total shares held by the purchase plan

352,100301,210

On 9 November 2022, no shares were allocated from a surplus

of shares held by the Trustees of the Auckland International

Airport Limited Share Purchase Plan and 135,100 new shares

were issued at a price of $6.0, being a 20% discount on the

weighted average market selling price at which ordinary shares

were sold on the NZX Main Board on 9 November 2022.

On 8 November 2021, 29,300 shares were allocated from

a surplus of shares held by the Trustees of the Auckland

International Airport Limited Share Purchase Plan and 38,410

new shares were issued at nil consideration, up to a value of

$1,500 per employee. No repayments are required in respect

of this offer, but the shares remain subject to a three-year

restrictive period. The offer was both as an acknowledgement

of employees' hard work and also the critical role they will play

as aviation recovers.

(b) Long-term incentive plan (LTI plan)

Under the LTI plan, share rights are granted to participating

executives with a three-year vesting period.

Share rights, once vested and exercised, entitle the

participating executives to receive shares in Auckland Airport.

The receipt of the shares, or vesting, is at nil cost to executives

and subject to remaining employed by Auckland Airport during

the vesting period and achievement of total shareholder return

(TSR) performance hurdles.

For 50% of the shares granted under the plans, all shares will

vest if the TSR equals or exceeds the company’s cost of equity

plus 1% compounding annually (independently calculated by

Jarden and PricewaterhouseCoopers). For the other 50% of

shares granted, the proportion of shares that vest depends

on Auckland Airport’s TSR relative to a peer group. The peer

group comprises the members of the Dow Jones Brookfield

Airports Infrastructure Index (excluding Auckland Airport) at

each grant date.

To the extent that performance hurdles are not met or

executives leave Auckland Airport prior to vesting, the shares

or share rights are forfeited.

Notes and accounting policies CONTINUED
FOR THE YEAR ENDED 30 JUNE 2023

80

Share rights LTI plan

Number of share rights

Grant dateVesting date

Balance

at the

beginning

of the year

Granted

during the

year

Vested

during the

year

Forfeited

during the

year

Lapsed

during the

year

Balance at

the end of

the year

27 September 201930 September 2022161,776---161,776-

4 December 20201 October 202386,561--32,528-54,033

30 September 202130 September 202489,572--32,986-56,586

08 April 202230 September 202461,374----61,374

01 October 202230 September 2025-149,548-32,780-116,768

07 November 202230 September 2025-10,962---10,962

01 May 202330 September 2025-2,888---2,888

Total share rights

399,283163,398-98,294161,776302,611

Fair value of share rights granted

The LTI plans are valued as nil-price in-substance options at

the date at which they are granted using a probability weighted

pay-off valuation model independently prepared by Jarden. The

following table lists the key inputs to the valuation. Volatility

estimates were derived using historical data over the past two

years. The cost is recognised in the income statement over the

vesting period, together with a corresponding increase in the

share-based payment reserve in equity.

Grant dateVesting dateGrant price

Risk-free

interest rate

range

Expected

volatility of

share price

Estimated

fair value per

share right

Share price at

exercise

24 September 2018

24 September

2021$7.131.80 – 2.00%18.2%$3.08$7.36

27 September 2019

30 September

2022$9.250.79 – 0.81%19.8%$4.01N/A

04 December 2020

01 October

2023$7.030.04 – 0.18%36.8%$3.41N/A

30 September 2021

30 September

2024$7.261.00 – 1.55%26.2%$3.56N/A

08 April 2022

30 September

2024$7.331.00 – 1.55%26.2%$3.60N/A

01 October 2022

30 September

2025$7.641.18 – 4.18%22.0%$3.46N/A

07 November 2022

30 September

2025$7.541.18 – 4.18%22.0%$3.41N/A

01 May 2023

30 September

2025

$8.741.18 – 4.18%22.0%$4.08N/A

It has been assumed that participants will remain employed

with the company until the vesting date.

The share-based payment expense relating to the LTI plan for

the year ended 30 June 2023 is $0.5 million (2022: $0.1 million)

with a corresponding increase in the share-based payments

reserve (refer note 16(c)).

24. Events subsequent to balance date

On 17 August 2023, the directors of Queenstown Airport declared a final dividend of $9.6 million for the year ended 30 June 2023.

The group’s share of the dividend is $2.4 million.

On 23 August 2023, the directors of Auckland Airport declared a final dividend of $58.9 million for the year ended 30 June 2023.

23. Share-based payment plans CONTINUED

Auckland International Airport Limited

Audit Report
INDEPENDENT AUDITOR’S REPORT

TO THE SHAREHOLDERS OF AUCKLAND INTERNATIONAL AIRPORT LIMITED

Opinion

We have audited the consolidated financial statements of Auckland International Airport Limited (the ‘Company’) and its subsidiaries

(the ‘Group’), which comprise the consolidated statement of financial position as at 30 June 2023, and the consolidated income

statement, statement of comprehensive income, statement of changes in equity and cash flow statement for the year then ended,

and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements, on pages 25 to 80, present fairly, in all material respects, the

consolidated financial position of the Group as at 30 June 2023, and its consolidated financial performance and cash flows for the

year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards (‘NZ IFRS’) and

International Financial Reporting Standards (‘IFRS’).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (‘ISAs’) and International Standards on Auditing

(New Zealand) (‘ISAs (NZ)’). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the

Audit of the Consolidated Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of Ethics for Assurance

Practitioners (including International Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance

Standards Board and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional

Accountants (including International Independence Standards), and we have fulfilled our other ethical responsibilities in accordance

with these requirements.

Our firm carries out other assignments for the Group in the area of greenhouse gas inventory assurance reporting, trustee reporting

and assurance reporting for regulatory reporting, and non-assurance services in relation to the integrity of the aeronautical pricing

model as well as non-assurance services provided to the Corporate Taxpayers Group of which the Company is a member. These

services have not impaired our independence as auditor of the Company and Group. In addition to this, partners and employees of

our firm deal with the Company and its subsidiaries on normal terms within the ordinary course of trading activities of the business of

the Company and its subsidiaries. The firm has no other relationship with, or interest in, the Company or any of its subsidiaries.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated

financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial

statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

81

Financial statements

Key audit matterHow our audit addressed the key audit matter
Fair Value of Revalued Property,

Plant and Equipment

Land, buildings and services, runway, taxiways, aprons and

infrastructure property, plant and equipment (‘Revalued

PPE’) are recorded on the consolidated statement of

financial position at their fair value at the date of revaluation

less any subsequent accumulated depreciation and

impairment losses (if any). The Group revalues these assets

at regular intervals that are sufficient to ensure that the

carrying values are not materially different to their fair values.

The carrying value of these assets as at 30 June 2023 is

$7,484.7 million.

Land assets were revalued at 30 June 2023. A revaluation

gain of $53.0 million is recognised in other comprehensive

income (revaluation reserve), and a revaluation gain of

$0.3 million is recognised in the income statement.

Runway, taxiways and aprons were revalued at 30 June 2023.

A revaluation gain of $63.8 million is recognised in other

comprehensive income (revaluation reserve), and a

revaluation loss of $6.2 million is recognised in the income

statement.

Infrastructure assets were revalued at 30 June 2023. A

revaluation gain of $101.8 million is recognised in other

comprehensive income (revaluation reserve), and a

revaluation loss of $9.7 million is recognised in the income

statement.

Buildings and services assets were last revalued at 30 June

2022. The Group did not carry out revaluations in 2023 on

these assets as it assessed there has been no material

change in fair values.

The Group’s assessment considered movements in the

relevant capital goods price indices and other relevant

market indicators.

Note 11 to the financial statements provides summary

information about each class of Revalued PPE, including

descriptions of the valuation methodologies used in the

latest valuations.

We consider the fair value of Revalued PPE to be a key audit

matter due to the materiality of the carrying amounts to the

financial statements and the judgement involved in

determining their fair values.

In relation to the land, runway, taxiways and aprons, and

infrastructure assets revalued in the current year, our audit

procedures focused on the valuation process, methodologies and

key inputs.

We evaluated the Group’s processes in respect of the independent

valuations including the selected valuation methodologies, the

internal data provided to the valuers where relevant, and the

reconciliation of the valuations to the asset register.

We evaluated the competence, objectivity and independence of the

external valuers. This included assessing their professional

qualifications and experience and obtaining representation from

them regarding their independence and the scope of their work. We

also met with the independent valuers to discuss and challenge key

aspects of their valuations.

Our procedures included:

• Reading the valuation reports for all properties, considering

whether the methodology applied was appropriate for the asset

being valued;

• Assessing the methodology for consistency with prior valuations

and considering whether any changes to the methodology were

required;

• Testing the key inputs to the valuations across a sample of

properties by agreeing information to underlying records and

comparing assumptions against market data where available;

and

• Reviewing the valuations for any limitations of scope that would

impact the reliability of the valuations.

For all other PPE carried at fair value, our audit procedures focused

on the appropriateness of the Group’s assessment that the carrying

value is not materially different to fair value. Our procedures

included:

• Assessing whether the capital goods price indices used by the

Group are appropriate;

• Comparing the capital goods price indices and other relevant

inputs to observable market data and testing the accuracy of the

Group’s calculation of changes; and

• Considering the appropriateness of the Group’s assessment

that carrying values are not materially different to fair value.

82

Auckland International Airport Limited

Key audit matterHow our audit addressed the key audit matter
Valuation of Investment Properties

Investment properties of $2,882.1 million are recorded at fair

value in the consolidated statement of financial position at 30

June 2023. A revaluation loss of $139.7 million is recognised

in the consolidated income statement.

Revaluations are carried out at least annually by independent

registered valuers. Estimating the fair values requires

judgement and the models used include both observable

and non-observable inputs.

Vacant land ($435.8 million) is valued using a direct sales

comparison and residual value approach.

Retail and service, industrial, and other investment

properties ($2,446.3 million) are valued using discounted

cash flow models. The significant inputs to the discounted

cash flow models are market rental rates, rental growth rates

and discount rates.

Note 12 to the financial statements provides summary

information about the investment properties held by the Group

and quantitative information about the key inputs to the

valuation models. Note 11 (c) describes the methodologies

used and provides qualitative information about the sensitivity

of the models to changes in the key inputs.

We consider the valuation of investment properties to be a

key audit matter due to the materiality of revaluation gains

(losses) and carrying amounts to the financial statements

and the judgement involved in determining their fair values.

Our audit procedures focused on the appropriateness of the

valuation methodologies and key inputs applied in the models.

We evaluated the competence, objectivity and independence of the

external valuers. This included assessing their professional

qualifications and experience and obtaining representation from

them regarding their independence and the scope of their work. We

also met with the independent valuers to discuss and challenge key

aspects of their valuations, as well as the impact the current

macroeconomic conditions are having on the general market.

We read the valuation reports for all properties and considered

whether the methodology applied was appropriate for the property

being valued. We assessed the methodology for consistency with

the prior period and considered whether any changes to the

methodology were appropriate.

We performed testing on a sample of the valuation reports. Our

procedures included:

• Testing the key inputs to the valuations by agreeing information

to underlying records and comparing assumptions against

market data where available; and

• Reviewing the valuations for any limitations of scope that would

impact the reliability of the valuations.

Other information

The directors are responsible on behalf of the Group for the other information. The other information comprises the information in the

Annual Report that accompanies the consolidated financial statements and the audit report.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of

assurance conclusion thereon.

Our responsibility is to read the other information and consider whether it is materially inconsistent with the consolidated financial

statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If so, we are required to report

that fact. We have nothing to report in this regard.

Directors’ responsibilities for the consolidated financial statements

The directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated financial statements

in accordance with NZ IFRS and IFRS, and for such internal control as the directors determine is necessary to enable the preparation

of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible on behalf of the Group for assessing the Group’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to

do so.

83

Financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable

assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and ISAs (NZ) will

always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,

individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis

of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located on the External Reporting

Board’s website at:

https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-report-1

This description forms part of our auditor’s report.

Restriction on use

This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so that we might state to the

Company’s shareholders those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume responsibility to anyone other than the Company’s shareholders as a body, for

our audit work, for this report, or for the opinions we have formed.

Andrew Dick, Partner

for Deloitte Limited

Auckland, New Zealand

23 August 2023

84

Auckland International Airport Limited

Five-year summary
85

Five-year summary

FOR THE YEAR ENDED 30 JUNE 2023

202320222021

1

202020192018

Group income statement$M$M$M$M$M$M

Income

Airfield income86.660.964.0100.6127.6122.1

Passenger services charge132.933.824.2133.0185.1179.1

Retail income130.922.717.8141.5225.8190.6

Rental income170.6129.7115.2109.2107.897.6

Rates recoveries12.78.67.87.76.76.0

Car park income57.726.228.750.364.261.0

Interest income3.20.34.91.71.82.2

Flood-related income5.0-----

Other income26.318.118.523.024.425.3

Total income

625.9300.3281.1567.0743.4683.9

Expenses

Staff63.350.045.662.959.157.9

Asset management, maintenance and airport operations89.866.753.477.581.169.5

Rates and insurance31.821.020.818.016.113.7

Marketing and promotions6.71.41.08.312.713.8

Professional services and levies8.24.34.06.28.611.1

Fixed asset write-offs, impairment and termination costs4.86.92.5117.5--

Reversal of fixed asset impairment and termination costs(1.0)-(19.4)---

Flood-related expense8.4-----

Other expenses19.26.16.36.111.011.5

Expected credit losses/(release)(2.4)(0.6)(4.2)(0.6)--

Total expenses

228.8155.8110.0306.6188.6177.5

Earnings before interest expense, taxation,

depreciation, fair value adjustments and

investments in associate and joint

ventures (EBITDAFI)

2

397.1144.5171.1260.4554.8506.4

Investment property fair value change(139.7)204.4527.3168.6254.0152.2

Property, plant and equipment fair value change(15.6)(1.4)(7.5)(45.9)(3.8)-

Derivative fair value change(0.7)1.7(0.5)(1.9)(0.6)(0.7)

Share of profit/(loss) of associate and joint ventures11.1(12.8)21.18.48.216.7

Impairment of investment in joint venture---(7.7)--

Earnings before interest, taxation and

depreciation (EBITDA)

2

252.2336.4711.5381.9812.6972.0

Depreciation145.3113.1120.9112.7102.288.9

Earnings before interest and taxation (EBIT)

2

106.9223.3590.6269.2710.4883.1

Interest expense and other finance costs62.753.794.071.878.577.2

Profit before taxation

44.2169.6496.6197.4631.9805.9

Taxation expense/(benefit)1.0(22.0)30.03.5108.4155.8

Profit after taxation attributable to the owners of

the parent

43.2191.6466.6193.9523.5650.1

1The financial year 2021 has been restated following the IFRIC decision on cloud computing. Refer to note 2 of the financial statements.

2EBITDAFI, EBITDA and EBIT are non-GAAP measures. Refer to note 3(e) for more information.

Five-year summary CONTINUED
86

202320222021

1

202020192018

Group statement of comprehensive Income$M$M$M$M$M$M

Profit for the period

43.2191.6466.6193.9523.5650.1

Other comprehensive income

Items that will not be reclassified to the

income statement

Property, plant and equipment net

revaluation movements

218.675.8769.9(599.8)87.61,189.6

Tax on the property, plant and equipment

revaluation reserve

(40.4)(128.5)-(32.5)(24.6)-

Movement in share of reserves of associate and

joint ventures

11.213.98.2--8.0

Items that will not be reclassified to the

income statement

189.4(38.8)778.1(632.3)63.01,197.6

Items that may be reclassified subsequently

to the income statement

Cash flow hedges

Fair value gains/(losses) recognised in the cash

flow hedge reserve

19.185.557.7(44.5)(47.1)(9.5)

Realised (gains)/losses transferred to the

income statement

0.29.112.1(2.2)1.62.9

Tax effect of movements in the cash flow

hedge reserve

(5.4)(26.5)(19.5)13.113.30.3

Total cash flow hedge movement13.968.150.3(33.6)(32.2)(6.3)

Movement in cost of hedging reserve-(0.8)3.92.7(4.8)-

Tax effect of movements in the cash flow

hedge reserve

-0.2(1.1)(0.8)2.3-

Items that may be reclassified subsequently

to the income statement

13.967.553.1(31.7)(34.7)(5.1)

Total other comprehensive income/(loss)

203.328.7831.2(664.0)28.31,192.5

Total comprehensive income for the period,

net of tax attributable to the owners of

the parent

246.5220.31,297.8(470.1)551.81,842.6

1The financial year 2021 has been restated following the IFRIC decision on cloud computing. Refer to note 2 of the financial statements.

202320222021

1

202020192018

Group statement of changes in equity$M$M$M$M$M$M

At 1 July

8,150.97,929.56,630.76,032.95,682.14,029.0

Profit for the period43.2191.6466.6193.9523.5650.1

Other comprehensive income/(loss)203.328.7831.2(664.0)28.31,192.5

Total comprehensive income

246.5220.31,297.8(470.1)551.81,842.6

Shares issued0.61.00.61,210.464.055.9

Long-term incentive plan0.50.10.40.20.10.2

Dividend paid---(136.3)(265.1)(254.1)

At 30 June

8,398.58,150.97,929.56,637.16,032.95,682.1

1The financial year 2021 has been restated following the IFRIC decision on cloud computing. Refer to note 2 of the financial statements.

Auckland International Airport Limited

87
Five-year summary

202320222021

1

202020192018

Group balance sheet$M$M$M$M$M$M

Non-current assets

Property, plant and equipment

Land4,387.84,319.14,705.73,931.14,645.44,625.3

Buildings and services1,829.81,553.31,079.91,140.71,056.7961.8

Infrastructure781.1616.6551.7487.5403.1356.2

Runways, taxiways and aprons486.0398.5389.1378.3346.5351.5

Vehicles, plant and equipment63.698.6100.1123.2125.483.2

7,548.36,986.16,826.56,060.86,577.16,378.0

Investment properties2,882.12,897.42,641.42,897.41,745.41,425.6

Investment in associate and joint ventures193.1166.5154.4114.7105.7104.4

Derivative financial instruments45.028.129.2230.5162.6110.4

10,668.510,078.19,651.59,303.48,590.88,018.4

Current assets

Cash106.224.779.5765.337.3106.7

Trade and other receivables51.628.525.428.569.071.5

Taxation receivable1.421.620.921.6--

Derivative financial instruments1.6--15.4--

160.874.8125.8830.8106.3178.4

Total assets

10,829.310,152.99,777.39,297.28,697.18,196.8

Shareholders' equity

Issued and paid-up capital1,680.81,680.21,679.21,678.6468.2404.2

Cancelled share reserve(609.2)(609.2)(609.2)(609.2)(609.2)(609.2)

Property, plant and equipment revaluation reserve5,187.35,040.25,099.94,333.74,968.84,913.9

Share-based payments reserve2.02.12.01.61.41.3

Cash flow hedge reserve31.618.3(50.4)(100.7)(67.1)(38.2)

Cost of hedging reserve(1.7)(1.7)(1.1)(3.9)(5.8)-

Share of reserves of associate and joint ventures62.150.937.028.828.828.8

Retained earnings2,024.61,970.71,772.11,308.21,247.8981.3

8,377.58,151.57,929.56,637.16,032.95,682.1

Non-current liabilities

Term borrowings1,388.3961.01,172.81,824.41,748.61,893.5

Derivative financial instruments25.315.767.9134.688.438.9

Deferred tax liability438.5411.9278.3231.7265.3251.4

Other term liabilities3.53.32.82.11.91.8

1,855.61,391.91,521.82,192.82,104.22,185.6

Current liabilities

Accounts payable159.987.1103.4106.3102.4148.0

Taxation payable----15.312.9

Derivative financial instruments-0.91.93.0-1.3

Short-term borrowings428.8515.6220.0320.8441.8166.8

Provisions7.56.50.737.20.50.1

596.2610.1326.0467.3560.0329.1

Total equity and liabilities

10,829.310,153.59,777.39,297.28,697.18,196.8

1The financial year 2021 has been restated following the IFRIC decision on cloud computing. Refer to note 2 of the financial statements.

Five-year summary CONTINUED
88

202320222021202020192018

Group statement of cash flows$M$M$M$M$M$M

Cash flow from operating activities

Cash was provided from:

Receipts from customers593.3287.0271.2586.0756.0674.0

Interest received3.20.34.91.62.02.0

596.5287.3276.1587.6758.0676.0

Cash was applied to:

Payments to suppliers and employees(213.5)(134.6)(116.5)(242.5)(203.6)(180.5)

Income tax paid--(0.6)(94.2)(101.1)(96.4)

Interest paid(57.9)(51.5)(98.0)(75.1)(77.4)(77.9)

(271.4)(186.1)(215.1)(411.8)(382.1)(354.8)

Net cash flow from operating activities

325.1101.261.0175.8375.9321.2

Cash flow from investing activities

Cash was provided from:

Proceeds from sale of property, plant

and equipment

-0.40.40.1--

Proceeds from sale of investment property----1.5-

Dividends from associate and joint ventures1.83.05.014.99.215.4

1.83.45.415.010.7372.8

Cash was applied to:

Purchase of property, plant and equipment(465.1)(224.8)(141.9)(240.5)(239.1)(310.3)

Interest paid − capitalised(19.4)(8.0)(6.5)(11.8)(7.0)(8.8)

Expenditure on investment properties(106.8)(39.8)(58.1)(136.1)(81.0)(77.1)

Investments in associates and joint ventures(6.1)(14.0)(15.4)(23.2)(2.3)-

Costs relating to sale of investment of associate-----(10.1)

(597.4)(286.6)(221.9)(411.6)(329.4)(406.3)

Net cash applied to investing activities

(595.6)(283.2)(216.5)(396.6)(318.7)(33.5)

Cash flow from financing activities

Cash was provided from:

Increase in share capital---1,178.1--

Increase in borrowings753.0200.6105.0125.0150.0301.1

Settlement of cross-currency interest rate swaps-(1.4)79.6---

753.0199.2184.61,303.1150.0301.1

Cash was applied to:

Decrease in borrowings(401.0)(72.0)(714.9)(250.0)(75.0)(329.0)

Dividends paid---(104.3)(201.6)(198.2)

(401.0)(72.0)(714.9)(354.3)(276.6)(527.2)

Net cash flow applied to financing activities

352.0127.2(530.3)948.8(126.6)(226.1)

Net increase/(decrease) in cash held81.5(54.8)(685.8)728.0(69.4)61.6

Opening cash brought forward24.779.5765.337.3106.745.1

Ending cash carried forward

106.224.779.5765.337.3106.7

Auckland International Airport Limited

89
Five-year summary

202320222021202020192018

Capital expenditure$M$M$M$M$M$M

Aeronautical325.1125.648.1205.0106.0280.6

Retail0.30.40.114.019.012.5

Property development133.354.872.6146.687.880.2

Infrastructure and other53.467.775.152.746.020.8

Car parking135.011.51.214.725.311.1

Total

647.1260.0197.1433.0284.1405.2

Passenger, aircraft and MCTOW (maximum

certificated take-off weight)

202320222021202020192018

Passenger movements

International7,773,5551,340,875602,1258,473,94611,517,98811,266,382

Domestic8,087,7094,261,2715,841,5147,047,1089,593,6259,263,666

Aircraft movements

International42,42318,31515,10644,96257,08255,693

Domestic101,99867,74883,58394,175121,689118,583

MCTOW (tonnes)

International4,043,7172,115,1271,771,0144,669,9295,894,1125,798,018

Domestic2,028,2011,343,1501,637,8671,830,7112,372,4122,341,699

---

30 June 2023
$m

30 June 2022

$m

Movement

%

Financial Results

Income 625.9 300.3 108%

Operating expenses 228.8 155.8 47%

Earnings before interest, taxation, depreciation, fair value

adjustments and investments in associate and joint ventures

(EBITDAFI) 397.1 144.5 175%

Share of profit / (loss) of associate and joint ventures 11.1 (12.8)187%

Investment property fair value change (139.7) 204.4 (168)%

Property, plant and equipment fair value change (15.6) (1.4)(1,014)%

Derivative fair value change (0.7) 1.7 (141)%

Depreciation 145.3 113.1 28%

Interest expense and other finance costs 62.7 53.7 17%

Taxation expense / (benefit) 1.0 (22.0)105%

Reported profit after taxation 43.2 191.6 (77)%

Earnings per share2.9 c13.0 c(78)%

Underlying profit / (loss) after taxation

1

148.1 (11.6)1,377%

Underlying earnings / (loss) per share10.1 c (0.8 c)1,363%

Dividends

Total proposed dividend for the year (cents per share)4.00 c–n/a

Total value of distributions for the year ($ million) 58.9 – n/a

Financial Position

Shareholders' equity 8,377.5 8,150.9 3%

Total assets 10,829.3 10,152.9 7%

Debt to debt plus equity18.2%15.6%

Debt to enterprise value

2

12.7%12.3%

Net debt to enterprise value

2

12.0%12.1%

Capital expenditure

3

647.1 253.1 156%

Passenger and aircraft statistics – Auckland Airport

International passenger movements including transits 7,773,555 1,340,875 480%

Domestic passenger movements 8,087,709 4,261,271 90%

Maximum certificated take-off weight (tonnes) 6,071,918 3,458,278 76%

Aircraft movements 144,421 86,063 68%

Queenstown Airport performance

4

International passenger movements 736,861 37,8891,845%

Domestic passenger movements 1,633,459 1,096,65549%

Revenue59.626.8122%

EBITDAFI43.914.0214%

Profit after taxation22.71.11,964%

The above information is provided for general information purposes only and contains both audited and unaudited

information, information from third parties and both GAAP and non-GAAP financial measures. No representations

or warranties are made as to the accuracy or completeness of the above information and therefore it should be

read in conjunction with, and is subject to, Auckland Airport’s audited Financial Report for the year ended 30 June

2023, prior annual and interim financial reports and Auckland Airport’s market releases on the NZX and ASX.

Note:

1. Excluding investment property fair value increases, property, plant and equipment and derivative revaluations in the company and its associates, fixed asset write-offs,

impairments and termination costs and the tax effect of these adjustments

2. Based on the share price as at 30 June 2023 of $8.55 (30 June 2022 of $7.18)

3. Net capital expenditure additions after capex write-offs and impairments of $3.8 million in 2023 and $6.9 million in 2022

4. From non-audited management accounts of Queenstown Airport, which have not been apportioned for Auckland Airport’s 24.99% minority interest in Queenstown Airport

Results at a glance | 2023

Results

at a glance

June 2023

Income up to $625.9m

108%

Domestic up 90% and

International up 480%

PASSENGERS

15.9m

Appendix A
Reconciliation between reported profit after tax and underlying

profit after tax for the years ended 30 June 2023 and 2022:

aucklandairpor t.co.nz

Results

at a glance

continued

20232022

Reported

profit

$M

Adjustments

$M

Underlying

profit

$M

Reported

profit

$M

Adjustments

$M

Underlying

profit

$M

EBITDAFI per Income

Statement

1

397.1 – 397.1 144.5 – 144.5

Investment property

fair value change (139.7) 139.7 – 204.4 (204.4) –

Property, plant and

equipment fair value change (15.6) 15.6 – (1.4) 1.4 –

Fixed asset write-offs,

impairments and

termination costs

1

– 2.8 2.8 – 6.9 6.9

Derivative fair value change (0.7) 0.7 – 1.7 (1.7) –

Share of profit / (loss) of

associate and joint ventures11.1 (3.6) 7.5 (12.8) 17.2 4.4

Depreciation (145.3) – (145.3) (113.1) – (113.1)

Interest expense and

other finance costs (62.7) – (62.7) (53.7) – (53.7)

Taxation (expense) / benefit (1.0) (50.3) (51.3) 22.0 (22.6) (0.6)

Profit / (loss) after tax 43.2 104.9 148.1 191.6 (203.2) (11.6)

Notes:

1. 2023 EBITDAFI included fixed asset write-offs, impairments and termination costs of $3.8 million. 2022 included $6.9 million.

Underlying profit in the year, an

improvement on the underlying

loss of $11.6 million in 2022

$14 8 .1m

Reported profit after tax

down 77%


$43.2m

Results at a glance | 2023

We have made the following adjustments to show underlying profit after tax for the years ended 30 June 2023

and 2022:

• we have reversed out the impact of revaluations of investment property in 2023 and 2022. An investor should

monitor changes in investment property over time as a measure of growing value. However, a change in one

particular year is too short to measure long-term performance. Changes between years can be volatile and,

consequently, will impact comparisons. Finally, the revaluation is unrealised and, therefore, is not considered

when determining dividends in accordance with the dividend policy;

• consistent with the approach to revaluations of investment property, we have also reversed out the revaluations

of the land, runways, taxi ways, aprons and infrastructure assets within property, plant and equipment in 2023

and land and building classes of assets within property, plant and equipment in 2022;

• we have reversed out the impact of capital expenditure write-offs, impairments and termination cost expenses

and reversals in 2023 and 2022. These fixed asset write-off costs, impairments and termination costs are not

considered to be an element of the group’s normal business activities and on this basis have been excluded

from underlying profit;

• we have also reversed out the impact of derivative fair value movements. These are unrealised and relate to

basis swaps that do not qualify for hedge accounting on foreign exchange hedges, as well as any ineffective

valuation movements in other financial derivatives. The group holds its derivatives to maturity, so any fair value

movements are expected to reverse out over their remaining lives. Further information is included in note 18(b)

of the financial statements;

• in addition, we have adjusted the share of profit of associates and joint ventures in both 2023 and 2022 to

reverse out the impacts on those profits from revaluations of investment property and financial derivatives; and

• we have also reversed out the taxation impacts of the above movements in both the 2023 and 2022

financial years.

---

Annual Results
Presentation

Prepared by:

Strategy, Planning & Performance

24 August 2023

Carrie Hurihanganui

Chief Executive

Philip Neutze

Chief Financial Officer

Annual results
Important notice

Disclaimer

This presentation is given on behalf of Auckland International Airport Limited (NZX: AIA; ASX: AIA; ADR: AUKNY). Information in this presentation:

•is provided for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in Auckland International Airport Limited (Auckland Airport);

•should be read in conjunction with, and is subject to, Auckland Airport’s audited financial statements for the year ended 30 June 2023, prior annual and interim reports, and Auckland Airport's market releases on the NZX

and ASX;

•may include forward-looking statements about Auckland Airport and the environment in which it operates which are subject to uncertainties and contingencies outside of Auckland Airport's control. Auckland Airport's

actual results or performance may differ materially from these statements;

•includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and

•may contain information from third parties believed to be reliable; however, no representations or warranties are made as to the accuracy or completeness of such information.

All information in this presentation is current at the date of this presentation unless otherwise stated. Auckland Airport is not under any obligation to update this presentation at any time after its release, whether as a result of

new information, future events, or otherwise.

All currency amounts are expressed in New Zealand dollars unless otherwise stated and figures, including percentage movements, are subject to rounding.

Refer to page 38 for a glossary of the key terms used in this presentation.

Non-GAAP measures

This presentation contains references to non-GAAP measures including EBITDAFI, EBITDA and underlying profit or loss. A reconciliation between reported profit after tax and the non-GAAP measure of underlying profit or

loss is included in the Appendix.

The directors and management of Auckland Airport understand the importance of reported profits meeting accounting standards. Because we comply with accounting standards, investors know that comparisons can be made

with confidence between different companies and that there is integrity in our reporting approach. However, we believe that an underlying profit or loss measurement can also assist investors to understand what is happening

in a business such as Auckland Airport, where revaluation changes can distort financial results or where one-off transactions, both positive and negative, can make it difficult to compare profits between years.

For several years Auckland Airport has referred to underlying profit or loss alongside reported results. We do so when we reportour results, but also when we give our market guidance (where we exclude fair value changes

and other one-off items) or when we consider dividends and our policy to pay 70% to 90% of underlying profit after tax (excluding unrealisedgains and losses arising from revaluation of property or treasury instruments and

other one-off items).

In referring to underlying profits or losses, we acknowledge our obligation to show investors how we have derived this result.

Highlights

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 4

FY23 highlights

1.Auckland Airport recognises EBITDAFI and underlying profit or loss are non-GAAP measures. A reconciliation between reported profit after tax and underlying loss after tax is included in the appendix

2.Net capital expenditure additions after $3.8 million of capital expenditure impairments

A year of transformative change at Auckland Airport

Improved financial

performance across all

passenger driven lines of

business combined with

continued growth in

commercial property

EBITDAFI

1

of $397.1m, up

175% on the prior year

Net profit after tax up to

$43.2m with an underlying

profit

1

returning to profitability

at $148.1m

Record year of capital

investment right across the

airport precinct with $378m

on aeronautical projects and

$269m on commercial

activities

Major project milestones

achieved

Concluded consultation on

aeronautical pricing for PSE4

with new charges taking

effect from 1 July 2023

Circa $5 billion of

aeronautical capital

investment planned over

PSE4 ($3.1 billion

commissioned)

8.73% PSE4 Target Return

Aeronautical price freeze in

the year to June 2023

FY23 distribution of 4.0cps

represents a payout of 73%

of underlying profit in the

second half of the 2023

financial year

Dividend reinvestment plan

reinstated for participating

shareholders offering a

discount of 2.5%

Passenger

movements

15.9m

Domestic PAX up 90%

International PAX up 480%

Transit PAX up 580%

Aircraft movements 144,000,

up 68%

25 airlines connecting AKL to

40 international destinations

Capital

investment

Price setting

event 4

Revenue

Payment of a

dividend

$5.0bn

of investment

$625.9m

up 108% on the prior yearup 183% on the prior year

$647.1m

up 156% on the prior year

2

4.0cps

First dividend to

shareholders since 2019

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 5

Financial results at a glance

3.Auckland Airport recognises EBITDAFI and underlying profit or loss are non-GAAP measures. A reconciliation between reported profit after tax and underlying profit after tax is included in the appendix

4.Net capital expenditure additions after $3.8 million of capital expenditure write offs and impairments

108%

84% of FY19

Revenue

$625.9m

175%

EBITDAFI

$397.1m

Reported profit

after tax

$43.2m

77%

Final

dividend

4.0cps

Capital

investment

$647.1m

156%

2023 earnings per share of

2.93cps

Underlying

profit after tax

$148.1m

1,377%

Underlying profit per share of

10.06cps

4

EBITDAFI margin of 62.9%

3

3

Aeronautical

revenue

$219.5m

132%

Retail

revenue

$130.9m

477%

Parking

revenue

$57.7m

120%

Commercial

property

$142.9m

27%

$2.9bn portfolio valuation

54% of FY19

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 6

Strong recovery in passenger numbers...

International passengers continued to recover strongly throughout the year with the greater number of international carriers serving Auckland improving

connectivity and choice for travellers

Monthly passenger numbers as a % of FY19

Eight international airlines added in the year

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

Jul-19

Oct-19

Jan-20

Apr-20

Jul-20

Oct-20

Jan-21

Apr-21

Jul-21

Oct-21

Jan-22

Apr-22

Jul-22

Oct-22

Jan-23

Apr-23

FY20FY21FY22FY23

International (incl transits)Domestic

Aircraft movements

2022

25

Airlines

17

Airlines

2023

67,748

101,998

18,315

42,423

86,063

144,421

20222023

DomesticInternationalTotal

+51%

+132%

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 7

$376

...coupled with strong recovery in commercial performance

The recovery in passenger movements during the year has driven improved performance across the commercial elements of the business

5.Income per PAX calculated as total retail income divided by total PAX, excluding

half of the transit PAX movements

Retail income per PAX

5

in June 2023 up 57% on

the same month in 2022

Retail

$5.25

$8.22

Car parking average revenue per space in June

2023 up 52% on the same month in 2022

Car parking

$8.22$572

27%

90%

90%

Hotel occupancy in June 2023 up 63 percentage

points on the same month in 2022

Hotels

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 8

We are ‘building a better future’

Supported the recovery in travel

through increased connectivity

Reopened our commercial

businesses to cater for increased

passenger demand

Focused on improving operating

efficiency and effectiveness to

enhance the passenger experience

Continued our disciplined

approach to investment in

infrastructure

New international servicesReopening of Bistro Box in the international terminalTrialling dedicated lanes to deliver improved efficiency

Enabling works for the integrated terminal

Financial
performance

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 10

Total passenger movements well up on FY22

For the year ended 30 June20232022Change

Pre-COVID

2019

6

% of pre-

COVID 2019

International arrivals

3,635,079596,104510%5,284,32569%

International departures

3,539,392656,657439%5,222,33568%

International passengers excluding transits

7,174,4711,252,761473%10,506,66068%

Transit passengers

599,08488,114580%1,011,32859%

Total international passengers

7,773,5551,340,875480%11,517,98867%

Domestic passengers

8,087,7094,261,27190%9,593,62584%

Total passengers

15,861,2645,602,146183%21,111,61375%

6.Comparative information for the year to June 2019 has been included to compare the 2023 performance against the last financial year that immediately preceded the COVID-19 pandemic

•Total PAX volumes increased 183% on prior year

reflecting the strong recovery in international

travel and a full year of domestic travel without

any travel restrictions

•International PAX recovered to 67% of the pre-

COVID equivalent in FY23, peaking at 86% in

June 2023

•With a full year of no travel restrictions, domestic

PAX volumes increased 90% on 2022

•Against pre-COVID levels, domestic volumes

plateaued at 84% owing to continued airline

capacity constraints

•Airline capacity is still not back at pre-pandemic

levels, with both international and domestic air

fares well above pre-COVID prices

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 11

Aircraft movements and MCTOW

•International aircraft movements and MCTOW

increased by 132% and 91% respectively

following a strong recovery of the international

airline network connecting into Auckland

•Domestic aircraft movements and MCTOW both

increased by 51% reflecting no domestic travel

restrictions this financial year

•International and domestic seat capacity

recovered to 68% and 83% respectively of the

pre-COVID equivalents

7.Comparative information for the year to June 2019 has been included to compare the 2023 performance against the last financial year that immediately preceded the COVID-19 pandemic

For the year ended 30 June20232022Change

Pre-COVID

2019

7

% of pre-

COVID

2019

Aircraft movements

International aircraft movements

42,42318,315132%57,08474%

Domestic aircraft movements

101,99867,74851%121,70384%

Total aircraft movements

144,42186,06368%178,78781%

MCTOW (tonnes)

International MCTOW

4,043,717

2,115,128

91%

5,894,113

69%

Domestic MCTOW

2,028,201

1,343,150

51%

2,372,412

85%

Total MCTOW

6,071,918

3,458,278

76%

8,266,525

73%

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 12

Return to underlying profit

•Revenue up significantly in the year reflecting

strong passenger-related and investment

property growth

•Operating costs increased 47% reflecting the

scaling up of the business including staff

numbers to support the recovery in travel plus

very strong inflation pressures, particularly rates

and insurance

•EBITDAFI margin improved from 48% to 63%

•Strong performance was also seen in

Queenstown Airport with a $5.6 million share of

underlying profit (FY22: $0.3 million) driven by a

recovery from international services in the year

•Depreciation expense increased 28% in the year

to $145.3 million, reflecting the increase in the

book value of depreciable assets following last

year’s PP&E buildings revaluations plus new

assets commissioned

•Net interest expense rose to $62.7 million in the

year reflecting increased borrowings and higher

interest rates

•Underlying earnings returned to profit for the first

time since FY20 when COVID-19 had just begun

to bite

For the year ended 30 June ($m)20232022Change

Revenue

625.9 300.3 108%

Expenses

228.8 155.8 47%

Earnings before interest, taxation, depreciation,

fair value adjustments and investments in associates (EBITDAFI)

8

397.1 144.5 175%

Share of profit / (loss) from associate and joint ventures

11.1 (12.8)187%

Derivative fair value change

(0.7)1.7 (141)%

Property, plant and equipment fair value change

(15.6)(1.4)(1,014)%

Investment property fair value change

(139.7)204.4 (168)%

Depreciation expense

145.3 113.1 28%

Interest expense and otherfinance costs

62.7 53.7 17%

Taxation expense / (benefit)

1.0 (22.0)105%

Reported profit after tax

43.2 191.6 (77)%

Underlying profit / (loss) after tax

8

148.1 (11.6)1,377%

8.Auckland Airport recognisesEBITDAFIand underlying profit or loss are non-GAAP measures. A reconciliation between reported profit after tax and underlying profit/(loss)

after tax is included in the appendix

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 13

Return of passengers driving revenue uplift across the business

•Despite aeronautical prices held at FY22 levels

for the first year of PSE4, revenue from Airfield

and the Passenger Services Charge grew a

combined 132% reflecting strong growth in

aircraft movements and passengers

•With passengers returning, the progressive

reopening of retail stores in the international

terminal drove a significant increase in retail

income

•Car parking income increased significantly

reflecting the stronger than pre-COVID

propensity to park, the reopening of all parking

products and passenger growth

•Investment property rental income increased by

27% on the prior period driven by rental growth in

the existing portfolio, part period new leases in

FY22 and new leases in FY23 and an $8.4

million ‘straight-lining effect’ from leases with

fixed rental increments over the lease period

For the year ended 30 June($m)20232022Change

Airfield income

86.6

60.9

42%

Passenger services charge

132.9

33.8

293%

Retail income

130.9

22.7

477%

Car park income

57.7

26.2

120%

Investment property rental income

142.9

112.9

27%

Other rental income

27.7

16.8

65%

Other income

47.2

27.0

75%

Total revenue

625.9

300.3

108%

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 14

Operating costs

•The recovery in aviation necessitated higher staff

numbers and outsourced operations for bussing,

cleaning and parking (within asset management,

maintenance and airport operations) to service

increased aircraft and passenger throughput

•Normalisingfor the $4.3 million government wage

subsidy received only in the prior period, staff

costs rose 17% or $9.0 million in the period

•In January 2023, Auckland Airport experienced

flash flooding caused by record breaking rainfall,

particularly in the international terminal. $8.4

million of flood related expenses were suffered in

the financial year

•Cost inflation was very strong, especially in non-

tradable categories with rates and insurance

costs rising significantly

•Other expenses rose in the year reflecting a $3.4

million write down of decommissioned assets,

increased SaaS costs and higher operating costs

from increased hotel activity

For the year ended 30 June ($m)20232022Change

Staff63.3 50.0 27%

Asset management, maintenance and airport operations89.8 66.7 35%

Rates and insurance31.8 21.0 51%

Marketing and promotions6.7 1.4 379%

Professional services and levies8.2 4.3 91%

Fixed asset write-offs, impairments and termination costs

9

3.8 6.9 (45)%

Flood related expense 8.4 -

Other expenses19.2 6.1 215%

Expected credit losses(2.4)(0.6)(300)%

Total operating expenses228.8 155.8 47%

Depreciation145.3 113.1 28%

Interest62.7 53.7 17%

9.$3.8 million in 2023 is net of $1.0 million benefit in related to the reversal of fixed asset impairment and termination costs

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 15

Significant lift in capital expenditure

Capital expenditure in the year of circa $647million, a record year spanning both aeronautical and

commercial assets

Capital expenditure

0

100

200

300

400

500

600

700

2023202220212020201920182017201620152014

$m

AeronauticalProperty development

Infrastructure and otherRetail

Car parking

Terminal Integration ($215 million):

•Construction underway on several elements

including the Eastern Bag Hall, West Terminal

Enabling and other civils-related enabling projects.

Completed new Operations Control Centre and

east airfield relocations

Transport including car parking ($149 million)

•Construction progressing well on new Transport

Hub and Park & Ride South facilities as well as

two roading projects, Te Ara Korako Drive and

upgrades to Lawrence Stevens Drive

Airfield ($66 million)

•Renewal and upgrade works for the airfield, aprons

and fuel network. In addition, Auckland Airport

purchased airfield ground lighting assets from

Airways NZ that required significant R&M

Property ($133 million)

•Completed the preleased development at 6-8 Te

Kapua Drive and an expansion of Kerry Logistics

•Eight pre-leased warehouse and office

developments underway, with completions

expected through FY24 to FY25 alongside

construction of Mānawa Bay

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 16

Balance sheet remains strong

As at30 June 2023 ($m)

20232022Change

Non-current assets

10,668.5 10,078.1 6%

Property, plant and equipment

7,548.3 6,986.1 8%

Investment property

2,882.1 2,897.4 (1)%

Other non-current assets

238.1 194.6 22%

Current assets

160.8 74.8 115%

Cash

106.2 24.7 330%

Other current assets

54.6 50.1 9%

Non-current liabilities

1,855.6 1,391.9 33%

Term borrowings

1,388.3 961.0 44%

Other non-current liabilities

467.3 430.9 8%

Current liabilities

596.2 610.1 (2)%

Equity

8,377.5 8,150.9 3%

•Non currentassets increased reflecting the net

$203 million upwards revaluations of land,

infrastructure, and runways, taxi ways & aprons

classes of assets within property, plant and

equipment, the $140 million downwards

revaluation of Investment Property and the $647

million capital expenditure in FY23

•The balance sheet remains strong with gearing at

18.2% versus the 60% borrowing covenant and

book value of equity at $8.4 billion versus market

capitalisationof approximately $12 billion

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 17

168

37

100

103

250

225

150

150

225

150

284

0

50

100

150

200

250

300

350

400

450

500

550

Jun-24Jun-25Jun-26Jun-27Jun-28Jun-29

$m

Commercial paperBank facilitiesFloating bonds

Fixed bondsAMTN

Strong liquidity position and robust credit metrics

Strong financial metrics with strong covenant headroom and liquidity to support the planned capex

•Total drawn debt of $1,817 million at 30 June

2023, an increase of 23% or $340 million on

June 2022

•Committed undrawn bank facility headroom of

circa $963 million (Jun-22: $955 million), and

$106 million in available cash (Jun-22: $25

million)

•Raised $625 million of new borrowings through

four NZDCM issues in the period comprising:

‒a $150 million and$100 million wholesale

floating rate note issues; and

‒a $225 million and $150 million listed fixed

rate bond issues

•A-credit rating maintained

Drawn debt maturity profile by financial year

TestJun-23Jun-22

Gearing covenant

10

≤ 60%18.2%15.6%

Interest coverage covenant

11

≥ 2.0x6.57x2.58x

Debt to enterprise value12.7%12.3%

Net debt to enterprise value12.0%12.1%

FFO interest cover

12

≥ 2.5x5.0x2.6x

FFO to net debt

12

≥ 11.0%18.5%6.4%

Weighted average interest cost5.03%4.32%

Average debt maturity profile (yrs)2.652.29

Percentage of fixed borrowings63.2%71.5%

Key credit metrics

10.Gearing defined as nominal value of debt plus derivative liabilities divided by nominal value of debt plus derivative liabilities plus the book value of equity

11.Interest coverage defined as reported NPAT plus taxation, interest expense, depreciation, revaluations and derivative changes (broadly EBITDA) divided by interest

12.Test is S&P’s A- rating threshold for Auckland Airport

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 18

Dividend

Final dividend for FY23 of 4.0 cents per share

•In June 2023, Auckland Airport revised its dividend policy to:

‒pay 70% to 90% of underlying net profit after tax (excluding

unrealisedgains and losses arising from a revaluation of

property or treasury instruments and other one-off items),

noting that, in special circumstances, the directors may

consider the payment of ordinary dividends above or below

this range, subject to the company’s cash flow

requirements, forecast credit metrics and outlook at the time

•A final dividend of 4.0 cents per share has been declared for

FY23 and is imputed to 100% for qualifying shareholders,

representing a pay-out of 73% of second half underlying profit

Dividend reinvestment plan

•Shareholders can once again participate in Auckland Airport’s

dividend reinvestment plan (in full or in part) at a discount of

2.5%

•Any shareholder that elects to participate will remain in the plan

at the same participation level until they elect to terminate or

amend their participation level

•Dividend reinvestment plan application forms must be received

by 27 September 2023 to confirm participation in the plan with

the trading period for setting the DRP strike price from 27

September 2023 to 3 October 2023. The DRP strike price will

be announced on 5 October 2023

11.00

11.25

4.00

0

5

10

15

20

25

20192020202120222023

Dividend per share (cents)

InterimFinal

NilNilNil

Auckland Airport dividends per share

Building a better
future

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 20

Passenger markets are recovering

Note:

Each percentage outlined above represents the bi-directional recovery of international passenger movements between New Zealand and that specific international market for the year to 30 June 2023 compared to the year ended 30 June 2019. Source: Stats NZ.

New Zealand domestic at 84% shows recovery of the domestic travel market within New Zealand for the year ending 30 June 2023 compared to the year ended 30 June 2022. Source: Auckland Airport

North America

74%

Australia

75%

Europe

82%

Pacific Islands

81%

North Asia

52%

China

23%

Southeast Asia

62%

After over two years of lockdowns and travel restrictions, passenger numbers recovered quickly in 2023 with strong demand forboth domestic and

international travel

India

120%

New Zealand

domestic

84%

Latin America

71%

Africa

100%

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 21

New Zealand is reconnecting to the world

With the restart of services and the launch of new routes, during 2023, 25 airlines connected Auckland Airport with 40 destinations across the Middle East,

Asia, the Americas and the Pacific Islands versuscompared to 29 airlines and 43 destinations pre-COVID

Perth

Adelaide

Hobart

Sydney

Melbourne

Gold Coast

Brisbane

Norfolk Island

Noumea

Port Vila

Nadi

Papeete

Rarotonga

Niue

Apia

Nuku’

alofa

Honolulu

Santiago

Vancouver

San Francisco

Los Angeles

Chicago

Dallas Fort Worth

Houston

New York

Doha

Dubai

Kuala Lumpur

Singapore

Hong Kong

Guangzhou

Taipei

Shanghai

Seoul

Tokyo

Bali

1

Cairns

Sunshine Coast

Beijing

Shenzhen

New routes announced but yet to commence

AKL - LAX

AKL - PER - KUL

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 22

The recovery in travel remains broad based

Strong recovery in aviation markets across both Kiwi outbound travellersand international visitors, with a diverse mix of reasons for travel, despite

COVID-19 related airline capacity shortages leading to very high air fares

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

27 Feb 22

20 Mar 22

10 Apr 22

01 May 2222 May 22

12 Jun 22

03 Jul 2224 Jul 22

14 Aug 2204 Sep 2225 Sep 22

16 Oct 22

06 Nov 2227 Nov 2218 Dec 22

08 Jan 2329 Jan 23

19 Feb 23

12 Mar 23

02 Apr 2323 Apr 23

14 May 23

BusinessHolidayVFROthers

0

20

40

60

80

100

120

Jul 22

Aug 22Sep 22

Oct 22

Nov 22Dec 22

Jan 23

Feb 23

Mar 23

Apr 23

May 23

Jun 23

% vs 2019

Non-NZNZTotal

38%

33%

15%

New Zealand arrivalsWeekly visitor arrivals’ purpose of travelInternational load factors (PLF) at Auckland

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jul 22

Aug 22Sep 22

Oct 22

Nov 22Dec 22

Jan 23

Feb 23

Mar 23

Apr 23

May 23

Jun 23

2019 PLF%2023 PLF%

Note: VFR purpose of travel is visiting friends and relatives

Source: Stats NZSource: Auckland AirportSource: Stats NZ

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 23

•The rebound of passenger numbers, combined

with staff shortages across the aviation industry

(e.g.airport, baggage handlers, security and

biosecurity screening) put pressure on arrival

processing and the customer experience has not

been acceptable

•Airport rosters are typically based on airline

schedules, so the closer airline performance is to

schedule, the more efficiently the system is able

toprocess customers

•Recent on-time arrival performance has

adversely impacted customer experience

•On time departure performance for both

domestic and international services remains

below historical averages, impacting customers

and the environment from additional fuel burn

•A taskforce with representatives from across the

airport community has identified a number of

initiatives to improve customer experience, such

as dedicated biosecurity lanes for New Zealand

and Australian passport holders, as well as

improved use and sharing of data with joint

border agencies to aid passenger processing

•We are also working collaboratively with airlines

to improve on-time performance and the airport

community to flex and adapt when things don’t

go to plan

•To improve operational efficiency, we are building

data and machine learning capabilities.

•This will better predict aircraft push backs and

taxi times to help airlines reduce their carbon

emissions and cut unnecessary taxiway wait

times for aircraft and the passengers onboard

We remain focused on improving efficiency and customer experience

Observation

Action

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 24

24

Transforming the aviation system at Auckland

Page 24

Ten-year roadmap

Projects are subject to change and may be replaced, deferred or cancelled

Airline consultation on the 10-year capital programmeconcluded in the year with circa $6.7 billion of investment planned for

Auckland Airport over PSE4 and PSE5 that will transform the aviation system

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 25

Significant progress continues towards terminal integration

•Detailed consultation with airline

stakeholders concluded

•Detailed design of the integrated facility

now underway with expectation of the

completion of detailed design in calendar

2024

•Construction on key enabling works

projects progressing well including:

‒completed the relocation of the airport

operations centreto a new purpose-

built facility that enables closer

collaboration between airport

stakeholders;

‒construction of the new Eastern Bag

Hall including increased capacity; and

‒relocation of eastern airfield

operations including livestock, ULDs,

airside waste disposal facility and

Checkpoint Charlie

Substantial enabling works continue onthe new domestic terminal that is planned to be tightly integrated with the existing

international terminal building

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 26

Airfield expansion providing important capacity for growth

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 27

Transport Hub that will transform the guest experience is taking shape

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 28

of Retail income

in the year

of Retail income

per PAX

Retail tenancies across the domestic &

international terminals

of retail stores open

in the terminals

Retail recovery is underway

$130.9 million

•By 30 June 2023, all stores inboth the domestic and international retail

concessions were open to the public, up from 90% and 45% respectively at30

June 2022

•With a greater number of stores open and with increased trading hours, strong

rental car salesand increased passenger flows, Retail income of $130.9 million

was up materially on the $22.7 millionin the prior year.As a result of these

factorsincomeper passenger

13

lifted105% to $8.41 (FY19: $10.96)

•Auckland Airport ran a competitive re-licencingprocess and

subsequentlyselected global duty-free operator LagardèreAWPLas its duty-free

partner and transitioned to a single operator in June 2023

•Initialduty freesingle operator observations have been positive with average

transaction values higher than pre-COVID equivalent.

•Reflecting the progressive renegotiation of expiring retailer licences, retail rent

abatements declined to$58 million for the year, or 34% of FY22

•The omni-channel offering has resonated strongly with customers with the ease

of pre-purchasingduty and tax-freegoods in advance and collecting on the day

of travel

•The off-airport duty and tax-free service via the Collection Point is recovering

well leveraging the addition of new luxury stores from Auckland’s premium retail

districts.Income is up 5 times on the prioryear

2023 has been a transformative year for retail at Auckland Airport. With the recovery in travel,

the international retail precinct has reopened driving a significant lift in retail income

Newly opened Bistro Box at the International Terminal

$8.41

115

100%

13.Income per PAX calculated as total retail income divided by total PAX, excluding half of the transit PAX movements

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 29

Parking services continue to resonate with travellers

With a full suite of products open for the year and ongoing strong demand for self-drive and

premium products, Parking income outpaced the passenger recovery

Number of public carparks

Number of exits

Average revenue per car park

7,214

Construction of the Transport Hub

1.9 million

$5,761

•Parking revenue is up two-foldfrom the prior year to $57.7 million reflecting the combined effects

of the recovery in international passenger numbers, rise in the average period of stay and

customers trading up in the period to higher-value parking products

•Domestic parking revenue recovered to be in-line with pre-COVID level, but International

terminal parking was constrained with reduced spaces due to the Transport Hub construction.

Travellerswere however able to utiliseValet and Park and Ride products as an alternative

•New products opening in the year including a short-stay car park with designated accessible

parking spaces and a mobility Valet product, providing ease of access at the front door of the

internationalterminal

Development activity

•Construction of the TransportHub continues to progress well with the ground floordrop off pick

up due to open in 2H24 and the above ground parking levels by the end of calendar

2024.When finished, the Transport Hub will provide improved passenger amenity, connectivity

and capacity for the terminal precinct

•$90 million of new transport projects announced in the year to support passenger journeys

including:

‒a new Park & Ride facility to connect southern travellers and due to open later in calendar

2024;

‒a new priority lane on Laurence Stevens Drive for public transport and high-occupancy

vehicles to provide easier access into the airport; and

‒a new road, TeAra KōrakoDrive, connecting George Bolt Memorial Drive and Nixon Road

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 30

Investment property continues strong growth

Development momentum underpinning strong growth

Portfolio value

Net lettable area

Rent roll

Portfolio occupancy

Weighted average

lease term

of land available for property

development

Annual hotel occupancy

Average hotel daily

room rate

$147 million

151ha

99.5%

8.6 years

75%

•Rental income up 27% to $143 million reflecting

a combination of lease renewals, new tenancies

and $8.4 millionof ‘straight-lined’ future revenue

recognition

•Rent roll in the year to June 2023 increased 15%

to $147 million

•Completed developments in the year include

Healthcare Logistics and Kerry Logistics adding

23,600sqm of net lettable area

•Quality pipeline of nine new developments under

construction which will add a further $40 million

in rental income once completed

Hotels

•Significant improvement in hotel occupancy

during the year, reaching 75% for the year

•Fit out of the TeĀrikinuiPullman continues with

opening planned before the end of this calendar

year

$2.9 billion

Projects currently under development

535,058m

2

$216.35

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 31

Sustainability remains central to our activities

Sustainability is a key priority for us –our planned investments will help us move towards climate change goals and create a more

sustainable airport

Purpose

Kaupapa

Place

Kaitiakitanga

People

Whānau

Community

Hapori

Material issues:

•Customer experience

•Wider economic contribution

Material issues:

•Climate change risk and adaptation

•Minimising our environmental

footprint

Material issues:

•Health, safety, wellbeing and

security

•Responsible employer

Material issues:

•Aircraft noise

•Community and mana whenua

involvement

Activities:

•Established centralised customer

functions (including Insights,

Customer Care and Contact Centre)

to improve customer experience at

Auckland Airport

•Participated in government business

delegations to promote New

Zealand offshore to help rebuild our

tourism and export industries

Activities:

•Undertook a coastal cleanup

•27% reduction in scope 1 and

Scope 2 emissions against a 2019

baseline

•Commenced programme to phase

out gas from the terminals

•Relocated 227 native eels

•Introduced organic waste separation

in the terminals

•Installed 24 EV chargers on the

airfield

Activities:

•Safety & Risk Executive appointment.

•‘People First’ HS&W strategy adopted

•40:40:20 target achieved for

Board/Executive/Tier 3 levels of

leadership

•10% of our employees identify as Māori

or Pasifika, with 50 different ethnicities

across our workforce.

•Implemented enhanced parentalleave

policy

•12% of all permanent employees

undertake paid volunteer leave

Activities:

•$384,000 granted to community

projects to support learning, literacy

and life skills in South Auckland

•Celebrated Matarikiwith tereo

Māori in the terminals

•Continued to work with alongside

local iwi on the design of projects

across the precinct

•Held a job fair to create employment

opportunities for local people and

connect them to jobs

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 32

Outlook

Guidance

•As we look to the 2024 financial year, we continue to see positive signs in the

recovery of the aviation industry with increased connectivity continuing to

facilitate a recovery in travel

•Reflecting this, Auckland Airport is providing the following guidance for FY24 of:

‒underlying earnings of between $260 million and $280 million based on

anticipated domestic and international passenger numbers of 8.5 million and

10.6 million respectively; and

‒capital expenditure of between $1,000 million and $1,400 million in the year

reflecting the significant investment across the airport precinct

•This guidance is subject to any material adverse events, significant one-off

expenses, non-cash fair value changes to property and any deterioration due to

global market conditions or other unforeseeable circumstances

Welcome sign for the FIFA Women's’ World Cup

Regulatory

2023
Highlights

Financial

performance

Building a

better future

Outlook

Annual Results

Page 34

Regulatory

On 8 June 2023, Auckland Airport reset aeronautical prices covering the five year

pricing period to 30 June 2027

•Airline charges will rise following the current price freeze, with the increases driven by a

combination of:

‒$2.5 billion of priced commissioned assets to be delivered during PSE4;

‒catch-up of the more than $100 million revenue shortfall in FY23 (year one of PSE4)

owing to the price freeze to support airlines during the early stages of the COVID-19

recovery; and

‒a higher target return reflecting updating all the data inputs of the Commission’s in-

force 2016 cost of capital Input Methodology at the start of PSE4 and discontinuing the

unwarranted 5bps downwards adjustment to asset beta for aeronautical activities

•No claw-back of the $500 million plus aeronautical revenue losses in PSE3 caused by

COVID-19

•Commerce Commission review of Auckland Airport’s PSE4 charges expected before the

end of the 2024 financial year

Other regulation

•The Civil Aviation Bill has been passed. Act due to come into effect 5 April 2025

•The Commerce Commission’s draft WACC IM determination has been released, to be

finalised in December 2023. The Draft decision includes a dramatic shift in

methodology.The three regulated airports (supported by New Zealand Airports) have

submitted strong evidence that the changes are ad hoc, unpredictable for future IM

reviews, not evidenced and do not meet the Commission’s own clearly-stated decision-

making framework

International airlines operating at Auckland Airport

202220232024

Domestic Passenger Charge$3.10$3.10$5.05

Regional Passenger Charge$2.64$2.64$4.53

International Passenger Charge$15.49$15.49$21.20

MCTOW >40 tonneslanding charge per tonne$14.20$14.20$20.72

Key aeronautical charges

Note:

Refer to Auckland Airport’s schedule of standard charges for a full breakdown of aeronautical charges for PSE4

Appendix

2023
Annual Results

Page 36

Appendix: Associates’ performance

For the year ended 30 June ($m)20232022Change

Queenstown Airport (24.99% ownership)

Total Revenue59.626.8

122%

EBITDA43.914.0

214%

Underlying Earnings (Auckland Airport share)

5.70.3 1,325%

Domestic Passengers

1,633,4591,096,655 49%

International Passengers

736,86137,889 1,845%

Aircraft movements

16,2359,69168%

Novotel Tainui Holdings (50.00% ownership)

Total Revenue

24.821.5 (14)%

EBITDA

6.612.3 (7)%

Underlying Earnings (Auckland Airport share)

1.84.1 (18)%

Average occupancy

71%20%

2023
Annual Results

Page 37

20232022

For the year ended 30 June ($m)

Reported

profit

AdjustmentsUnderlying

profit

Reported

profit

AdjustmentsUnderlying

profit

EBITDAFI per Income Statement

397.1 - 397.1 144.5 - 144.5

Investment property fair value change

(139.7)139.7 - 204.4 (204.4)-

Property, plant and equipment fair value change

(15.6)15.6 - (1.4)1.4 -

Fixed asset write-offs, impairments and termination costs

14

- 2.8 2.8 - 6.9 6.9

Derivative fair value change

(0.7)0.7 - 1.7 (1.7)-

Share of profit / (loss) of associate and joint ventures

11.1 (3.6)7.5 (12.8)17.2 4.4

Depreciation

(145.3)- (145.3)(113.1)- (113.1)

Interest expense and otherfinance costs

(62.7)- (62.7)(53.7)- (53.7)

Taxation expense / (benefit)

(1.0)(50.3)(51.3)22.0 (22.6)(0.6)

Profit after tax

43.2 104.9 148.1 191.6 (203.2)(11.6)

Appendix: Underlying profit reconciliation

We have made the following adjustments to show underlying profit after tax for the years ended 30 June 2023 and 2022:

•we have reversed out the impact of revaluations of investment property in 2023 and 2022. An investor should monitor changes in investment property over time as a measure of growing value. However, a change in

one particular year is too short to measure long-term performance. Changes between years can be volatile and, consequently, will impact comparisons. Finally, the revaluation is unrealisedand, therefore, is not

considered when determining dividends in accordance with the dividend policy;

•consistent with the approach to revaluations of investment property, we have also reversed out the revaluations of the land, runways, taxi ways, aprons and infrastructure and building classes of assets within

property, plant and equipment in 2023 and land and building classes of assets within property, plant and equipment in 2022;

•we have reversed out the impact of capital expenditure write-offs, impairments and termination cost expenses and reversals in 2023 and 2022. These fixed asset write-off costs, impairments and termination costs

are not considered to be an element of the group’s normal business activities and on this basis have been excluded from underlying profit;

•we have also reversed out the impact of derivative fair value movements. These are unrealisedand relate to basis swaps that do not qualify for hedge accounting on foreign exchange hedges, as well as any

ineffective valuation movements in other financial derivatives. The group holds its derivatives to maturity, so any fair value movements are expected to reverse out over their remaining lives. Further information is

included in note 18(b) of the financial statements;

•in addition, we have adjusted the share of profit of associates and joint ventures in both 2023 and 2022 to reverse out the impacts on those profits from revaluations of investment property and financial derivatives;

and

•we have also reversed out the taxation impacts of the above movements in both the 2023 and 2022 financial years.

14.2023 EBITDAFI included fixed asset write-offs, impairments and termination costs of $3.8 million. 2022 included $6.9 million

Annual results
Glossary

38

AMTN Australian medium-term notes

BPS Basis points

CPS Cents per share

DRP Dividend reinvestment plan

EBITDAFI Earnings before interest, taxation, depreciation, fair value adjustments and investments in associates

EV Electric vehicle

FFO Funds from operations

FY Financial year to 30 June

GAAP Generally accepted accounting principles

IM New Zealand Commerce Commission Input Methodologies

MCTOW Maximum certified take-off weight

NPAT Net profit after tax

NZDCM New Zealand debt capital markets

PAX Passenger

PLF Passenger load factor

PSE4 Regulatory price setting event 4

ULD Unit load device

VFR Visiting friends and relatives

WACC Weighted average cost of capital

---

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)

Name of issuer

Reporting Period

Previous Reporting Period

Currency

Amount (millions)

Revenue from continuing

operations

$625.9

Total Revenue$625.9

Net profit/(loss) from

continuing operations

$43.2

Total net profit/(loss) $43.2

Amount per Quoted Equity

Security

Imputed amount per Quoted

Equity Security

Record Date

Dividend Payment Date

Current period

Net tangible assets per Quoted

Equity Security

$5.69

A brief explanation of any of

the figures above necessary to

enable the figures to be

understood

Name of person authorised to

make this announcement

Contact person for this

announcement

Contact phone number

Contact email address

Date of release through MAP

Audited financial statements accompany this announcement.

24 August 2023

$0.01555556

26 September 2023

06 October 2023

Prior comparable period

$5.54

Refer to attached media release, Annual Report, audited Financial Statements

and Results Presentation

Authority for this announcement

Ian Beaumont, General Counsel

Stewart Reynolds

027 511 9632

stewart.reynolds@aucklandairport.co.nz

$0.04000000

Results for announcement to the market

Auckland International Airport Limited

12 months to 30 June 2023

12 months to 30 June 2022

NZD

Percentage change

108%

108%

-77%

-77%

Final Dividend

---

Template
Distribution Notice




Section 1: Issuer information

Name of issuer Auckland International Airport Limited

Financial product name/description Ordinary shares

NZX ticker code AIA

ISIN (If unknown, check on NZX

website)

NZAIAE0002S6

Type of distribution

(Please mark with an X in the

relevant box/es)

Full Year X Quarterly

Half Year Special

DRP applies X

Record date Close of trading on 26 September 2023

Ex-Date (one business day before the

Record Date)

25 September 2023

Payment date (and allotment date for

DRP)

6 October 2023

Total monies associated with the

distribution

1


$92,015,673

Source of distribution (for example,

retained earnings)

Retained earnings

Currency NZD – New Zealand Dollar

Section 2: Distribution amounts per financial product

Gross distribution

2

$ 0.05555556

Gross taxable amount

3

$ 0.05555556

Total cash distribution

4

$ 0.04000000

Excluded amount (applicable to listed

PIEs)

$ N/A

Supplementary distribution amount $0.00705882

Section 3: Imputation credits and Resident Withholding Tax

5


Is the distribution imputed


Fully imputed

Partial imputation

No imputation


1

Continuous issuers should indicate that this is based on the number of units on issue at the date of the form

2

“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of Resident

Withholding Tax (RWT).

3

“Gross taxable amount” is the gross distribution min

[TRUNCATED]

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