AUCKLAND INTERNATION

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Auckland Airport : Global Travel Recovery to Take Longer Than 3 Years --Update

08/19/2020 | 05:34pm

By Stephen Wright

WELLINGTON, New Zealand--Auckland International Airport Ltd. said a recovery in international travel from the pandemic will take longer than the three years estimated by the main airline industry group and Standard & Poor's.

The airport, which is New Zealand's key international gateway, on Thursday reported a 63% drop in full-year net profit to 193.9 million New Zealand dollars ($128.0 million) due to the collapse in travel since March.

Auckland Airport said it is "prudent" to adopt more conservative planning assumptions than the International Air Travel Association or ratings agency Standard & Poor's, which are forecasting a recovery in international air travel within three years.

"We think a full recovery could take longer," said Chief Executive Adrian Littlewood. "However, we are hopeful that domestic travel will return to normal comfortably within two years."

International tourism and the airline industry have been flattened by the coronavirus pandemic as governments sealed borders or heavily restricted travel since the first quarter of the year.

In July, Auckland Airport's international passengers numbers were down 97% from a year earlier. Domestic passengers were 39% lower, which was an improvement from a drop of 71% in June.

Mr. Littlewood said the company is "hopeful" that travel to Pacific island nations and to Australia will resume sometime in 2021 and recover before international long-haul travel.

Australia has capped daily arrivals from abroad to very low numbers, to avoid overwhelming its quarantine system, so only a small number of flights are operating from New Zealand to Australian cities.

Auckland Airport said it is not providing earnings guidance for its current financial year, but will review that decision at its annual shareholders meeting in October and at its interim results in February.

It forecast annual capital expenditure of NZ$250 million to NZ$300 million, some of which will be used for runway and apron maintenance and improvements.

The company raised NZ$1.2 billion cash in April by selling new shares so it could weather the collapse in travel.

 

Write to Stephen Wright at stephen.wright@wsj.com

 

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