AIA – FY23 Annual Results
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
O
u
r
v
a
l
u
e
s
—
W
e
C
a
r
e
—
C
o
l
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a
b
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r
a
t
i
v
e
—
E
x
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p
t
i
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n
a
l
—
I
n
t
e
g
r
i
t
y
—
R
e
s
p
e
c
t
Purpose
Kaupapa
Creating value for our
business, shareholders,
partners, customers
and New Zealand
O
u
r
s
u
s
t
a
i
n
a
b
i
l
i
t
y
p
i
l
l
a
r
s
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
O
u
r
v
a
l
u
e
s
—
W
e
C
a
r
e
—
C
o
l
l
a
b
o
r
a
t
i
v
e
—
E
x
c
e
p
t
i
o
n
a
l
—
I
n
t
e
g
r
i
t
y
—
R
e
s
p
e
c
t
Property
Developing and managing
a successful investment
property portfolio
O
u
r
s
u
s
t
a
i
n
a
b
i
l
i
t
y
p
i
l
l
a
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
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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
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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
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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
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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
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Building a
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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
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performance
Building a
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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]
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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