Airport pain: More job losses loom

Auckland International Airport (AIA) expects to report an additional “net adverse impact” of $50 million to $90m in its result to June 30, mostly from write-offs and capital expenditure termination costs arising from the Covid-19 pandemic.

The company, which has seen passenger numbers dwindle to just 5 per cent of the norm, also expected to announce more staff cuts, in addition to the 25 per cent reduction already implemented.

In March AIA suspended its underlying earnings guidance for the current financial year due to the significant uncertainty surrounding the duration and impact of Covid-19 travel restrictions on the business.

Once the threat posted by Covid19 became clear, AIA made a plan to bolster liquidity, cut operating costs and suspended or terminated $2 billion worth of capital expenditure.

AIA then successfully raised $1.2b from the share market.

In its upcoming result, AIA said it would make a $150m gain from investment property revaluations and $4.3m in government wage subsidies.

But capital expenditure write-offs would come to $42m-$52m and capex termination costs were estimated to be $68m to $70m.

Rent abatements for retail were expected to be $62.6m to $67.6m.

Chief executive Adrian Littlewood said the airport continued to respond to the “most disruptive crisis in the history of aviation”.

Airlines have been deeply impacted and the number of carriers operating here has fallen from 29 to 11.

Daily flight numbers have also reduced, falling by 80 per cent to 100 per day made up of domestic, cargo and repatriation services.

Littlewood said AIA had reduced its workforce by 25 per cent, including releasing 90 contractors who were largely connected to the capital programme.

Further staff reductions would mainly affect the company’s infrastructure team and its operations team.

Shares in AIA closed at $6.42 yesterday, having lost 32.3 per cent over the past 12 months. Its result is due for release on August 20.