Airport works on fuel options
Shareholders told pipeline losses minimal
Auckland Airport says it suffered only minor losses from the fuel pipeline crisis but is working with airlines and oil companies on new storage options.
The company’s chairman Sir Henry van der Heyden told shareholders losses would be in the “low hundreds of thousands of dollars” and would be covered by business interruption insurance.
Jet fuel supplies from the Marsden Point to Wiri pipeline were cut for 12 days last month after the pipeline ruptured, forcing airlines to refuel at other airports and cancel a number of flights.
The airport lost revenue from reduced aircraft movements and the costs of helping look after stranded passengers.
Chief executive Adrian Littlewood said the airport had a study under way into storage before the crisis and would continue this work as part of major redevelopment of the airport.
“We don’t have a direct relationship with the fuel companies around fuel supply. [But] we still are impacted by these outages and we’re still interested in understanding and knowing in detail their long-term plans.”
Fuel storage of up to 35 million litres — similar in size to the main Auckland jet fuel storage at Wiri — was planned for the new development south of the airport.
At the annual meeting yesterday van der Heyden said the company expected underlying profit after tax in the current financial year would be between $248 million and $257m.
This guidance would deliver underlying earnings per share growth of up to 3.7 per cent compared with the past financial year and reflected the impact of new aeronautical prices commencing in the 2018 financial year.
The airport is embarking on $2 billion in aeronautical infrastructure spending through to 2022 and had reinstated its dividend reinvestment plan.
It enabled shareholders to elect to buy shares at a 2.5 per cent discount to market price, instead of receiving the dividend as cash.
“The plan provides funding flexibility to support our investment in new infrastructure and growth oppor- tunities,” said van der Heyden.
Littlewood said growth had been spectacular.
“If there is a mark of the recent growth, it is that it took us 48 years from 1966 to reach 15 million passengers, however it only took us three years — to 2017 — to increase that by a further 27 per cent to 19 million passengers. Moreover, we now have 30 international airlines operating at the airport, up almost 70 per cent since just 2014.”
That growth had caused problems at the airport at times for those driving there last summer.
He said it should be better this summer with new traffic lights to the north and south controlling vehicle flow into the airport area, new bus lanes by Christmas and a new lane for buses and valet traffic in front of the domestic terminal.
“When we had that event in December we were [subject to] and unprotected from events on the network so traffic lights give us some control.”
Littlewood said the company was three-quarters of the way through its major international departures upgrade, with a brand new Customs and security screening area with a “recompose” space and half the new duty free stores already open.
Work was almost finished on a major international pier extension with two new multi-use aircraft gates capable of supporting two A380s or four A320 planes.