Auckland International Airport Limited · NZX:AIA
Auckland International Airport — Investor Presentation (June 2012)
23 slides from Auckland International Airport's investor presentation, Jun 7, 2012
Slide 1: Auckland Airport's airline pricing July 2012 – June 2017
Auckland Airport’s airline pricing July 2012 – June 2017 Rewarding growth Investor presentation - 7 June 2012 Investor pricing presentation – 7 June 2012 1
Slide 2: Airport Pricing – Background
Airport Pricing – Background Airport charges are designed to achieve a reasonable return on significant investments in essential long-term national infrastructure All international and domestic airport charges are collected from airlines and form part of their cost of operations Airports set prices
Slide 3: Information Disclosure Regime
Information Disclosure Regime Since 2011, NZ’s three largest airports including Auckland have been subject to Information Disclosure requirements under Part 4 of the Commerce Act Airports disclose certain performance related information (financial, non-financial, historical and forward-looking) Comm
Slide 4: Our Pricing Vision – Rewarding growth
Our Pricing Vision – Rewarding growth For consumers: sharing efficiencies Prudent, timely and and delivering staged capital quality services Rewarding Growth expenditure Containing Costs For investors: fair return on Operating efficiencies investment Volume growth Increasing For airlines: modest pri
Slide 5: New Pricing – Executive Summary
New Pricing – Executive Summary The new pricing structure means: Overall charges on a per-passenger basis held flat in real terms over the pricing period Supports long term strategic objective to grow aeronautical revenues predominately through volume, not price - providing more alignment and sharin
Slide 6: New Pricing – Key Features
New Pricing – Key Features Key features of new pricing structure: Initial decrease in total international aeronautical revenue per pax ($0.58) Initial increase in total domestic aeronautical revenue per pax ($1.32) Landing charges (MCTOW based) for international and domestic jets set to same rates R
Slide 7: New Pricing - Key Changes
New Pricing - Key Changes Pricing element Key changes Landing Charges Maintains MCTOW as basis for landing charges Maintains weight breaks as per 2012 pricing Resets domestic and international MCTOW jet charges to the same rate for the same weight International Incorporates charges previously includ
Slide 8: New Pricing Schedule
New Pricing Schedule Prices in NZD Charge Current Final pricing decision – new pricing period Financial year ending 30 June 2012 2013 2014 2015 2016 2017 Landing Charges – MCTOW Aircraft less than 6 tonnes Per landing 50.00 52.00 53.30 54.63 56.00 57.40 Aircraft greater than 6 tonnes but $ per tonne
Slide 9: Five year pricing path – flat in real terms
Five year pricing path – flat in real terms Aeronautical pricing revenues per passenger Average Revenue Current CAGR CAGR FY13 FY14 FY15 FY16 FY17 FY12-FY13 on Per PAX Basis FY12 FY13 - FY17 FY12 - FY17 Total International $22.13 $21.55 $22.31 $22.68 $23.07 $23.50 (2.6%) 2.2% 1.2% Passenger Total Do
Slide 10: Changes to price structure helps rebalance domestic and international
Changes to price structure helps rebalance domestic and international FY12 Sources of Aeronautical Revenue FY 13 Sources of Aeronautical Revenue MCTOW charges Domestic passenger charge (new) TSC (abolished) International passenger charges (IPC, TPC) Other Note: International passenger charges includ
Slide 11: Pricing assumptions – Volumes
Pricing assumptions – Volumes Final pricing decision – new pricing period Financial year ending 30 June Metric 2013 2014 2015 2016 2017 Aircraft Volumes Aircraft less than 6 tonnes Landings 1,786 1,786 1,786 1,846 1,846 Aircraft greater than 6 tonnes Tonnes (000’s) 487 496 505 515 524 but less than
Slide 12: Pricing assumptions – Asset Base
Pricing assumptions – Asset Base Moratorium on asset revaluations is maintained until 2017 as per previous price consultation commitment to airlines Continuation of moratorium strongly advocated for by airlines Creates inconsistency between Commerce Commission information disclosure monitoring and A
Slide 13: Pricing assumptions – Capital Expenditure
Pricing assumptions – Capital Expenditure Prices in 2011 NZD millions (real $) Final pricing decision – new pricing period Financial year ending 30 June 2013 2014 2015 2016 2017 Total Major Projects Runway concrete slab replacement 5.0 6.0 3.0 5.0 5.0 24.0 programme New aircraft stands - 9.0 10.0 -
Slide 14: Pricing assumptions – Capital Expenditure
Pricing assumptions – Capital Expenditure Prices in 2011 NZD millions (real $) Final pricing decision – new pricing period Financial year ending 30 June 2013 2014 2015 2016 2017 Total Major projects >$5m 35.9 54.5 33.8 18.0 31.0 173.1 Other projects < $5 million 25.6 21.1 15.8 14.8 14.8 91.9 Capital
Slide 15: DTB short-term modification
DTB short-term modification Existing domestic terminal building (DTB) 45+ years old Facilities under pressure due to increased aircraft size and faster passenger processing capabilities delivering higher passenger movements in peak periods Advent of larger aircraft due into service over next few yea
Slide 16: New Terminal Facility – Options
New Terminal Facility – Options Option 1 Existing international terminal Existing Option 2 domestic terminal Investor pricing presentation – 7 June 2012 16
Slide 17: Overview of NTF Options
Overview of NTF Options Features Considerations Option 1 – Centrally located between Taxiing times for domestic North of ITB the future position of two flights parallel runways. An initial ‘step change’ Greenfield site avoids construction of midfield construction complications apron and terminal sta
Slide 18: Northern runway
Northern runway Current demand growth track, combined with initiatives to improve efficiency of existing runway operations, means no immediate need to resume construction Information being gathered for terminal planning on forecast demand growth will help inform timing for northern runway Current de
Slide 19: Pricing assumptions – Operational Expenditure
Pricing assumptions – Operational Expenditure Aeronautical operating expenditure targets efficiencies and operating costs per passenger decrease in real terms Consistent with the exclusion of any new volumes generated on new routes or services, any marketing associated with Auckland Airport’s new ro
Slide 20: Pricing assumptions – WACC
Pricing assumptions – WACC Auckland Airport Risk Free Rate 3.48% Asset Beta 0.65 Leverage 30% Tax adjusted market risk premium (TAMRP) 7.5% Tax rate 28% Debt premium 1.72% Debt issuance costs 0.35% Cost of debt pre-tax 5.55% Cost of equity 9.47% WACC range (75th to 85th percentile) 8.88% - 9.45% WAC
Slide 21: Our international charges will remain competitive / below average
Our international charges will remain competitive / below average Existing charges per passenger each way - B777 (NZ$) $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 New charges will be 58c lower on average Source: LeighFisher, Comparison of published airport charges at principal airports served by
Slide 22: Domestic charges are among the lowest in Aust/NZ and will remain below average
Domestic charges are among the lowest in Aust/NZ and will remain below average $30.00 Existing charges per passenger each way Q300 (NZ$) $25.00 $20.00 Average Turnaround Cost: $11.22 /pax $15.00 $10.00 New charge: $5.80, Auckland Airport direct charge increasing from $2.77 to $4.07 $5.00 $0.00 Q300
Slide 23: Questions?
Questions? Investor pricing presentation – 7 June 2012 23
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