Auckland Airport retail outlook gloomier

Thursday 21st May 2009

Auckland International Airport’s retail outlook is gloomier after it was forced to open up its terminals to a dual duty free operation, while international visitor numbers dwindled with the global economic slump.

The share price dropped 4.2%. The nation’s largest gateway predicts retail revenue will be between $90 million and $93 million this year, below the market consensus around $104 million. Retail accounted for $51.8 million, or 28%, of the company’s sales in the first-half. The shares sank seven cents to $1.60 on the NZX 50 index, trimming their gain this year to 2.5%.

The airport said it would miss out on the savings a single duty free concession would have offered, while falling international passenger numbers and ongoing construction in the departure areas were also cited as reasons for the downgrade.

Chief financial officer Jason Dale said the return to two duty free operators “sacrificed the benefits of scale, penetration and range” of a single vendor.

The airport tendered a single duty free contract in 2007, but reversed its decision last August after the Commerce Commission warned it could breach the Commerce Act.

International passenger numbers dropped 6.9% in February, mirroring a decline in the number of people flying with Air New Zealand.

Offshore arrivals tumbled 10% to 226,500 in March compared to the same period last year, according to government statistics.

The company said there was no change to its previous full-year guidance, although it previously indicated profit would probably be in the lower end of a $100-110 million range.

Businesswire.co.nz

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