Infratil Limited · NZX:IFT
Infratil — Wellington International Airport — pres chamber commerce
32 slides from Infratil's investor presentation, Aug 1, 2006
Slide 1: Wellington Regional Chamber of Commerce
Wellington Regional Chamber of Commerce 1 August 2006
Slide 2: Agenda
Agenda Diverse air services are vital The Current Issue – the Proposed Tasman Cartel Long Term – Long Haul Keeping Wellington’s Infrastructure Fit for Purpose
Slide 3: Wellington Regional Strategy
Wellington Regional Strategy Wellington Region is well & truly focused on its economic future. The drift of people and businesses to Auckland and Australia has to be stemmed. For the first time, all Local Authorities are united on a strategy for the region. Wellington Regional Strategy has already a
Slide 4: The Danger of Isolation
The Danger of Isolation The NZ Institute recently issued “The Flight of the Kiwi”. NZ has few markets it can participate in within 3.5 hours. Australia is one of the few. High standards of access and connectivity are required to ensure Our best and brightest are prepared to stay and return Our B
Slide 5: Agenda
Agenda Diverse air services are vital The Current Issue – the Proposed Tasman Cartel Long Term – Long Haul Keeping Wellington’s Infrastructure Fit for Purpose
Slide 6: Ten Airline Myths
Ten Airline Myths 1. This agreement is all about the Tasman 2. This is a normal code share 3. You can’t make money on the Tasman 4. There is enormous excess capacity on the Tasman 5. Qantas & Air NZ can do nothing unilaterally 6. The Tasman Routes are Intensely Competitive 7. Virgin and Emirates wil
Slide 7: Not a normal code share
Not a normal code share Aspects Jointly TNA JV Air Share Seat Blocks Freesale Managed & Agreed Example (Old Eg: NZ/JL Eg: STAR Tasman) Frequency X X X Aircraft Type X X Capacity X X Routes X X X Available Seat X X X Kilometres Retail Pricing X X Net revenue X X Revenue Risk Sharing X X Defined block
Slide 8: Empty Seats are Normal & Desirable
Empty Seat are Normal & Desirable International Load Factors - Tasman & Other Australia 100% 80% 75% 76% 74% 71% 72.70% 73% 70% 68% 67% 60% 60% 62% 57% 60% Tasman To/From Australia 40% 20% 0% QF NZ DJ SQ CX QF/NZ All Aust. QF - All DJ (Fiji) Garuda Thai (BKK) Air Pacific (Fiji) Emirates (UAE)
Slide 9: There will still be empty seats under the Cartel
There will still be empty seats under the Cartel Current Seat Occupancy TNA Seat Occupancy - 3 years
Slide 10: Agenda
Agenda Diverse air services are vital The Current Issue – the Proposed Tasman Cartel Long Term – Long Haul Keeping Wellington’s Infrastructure Fit for Purpose
Slide 11: Proposition
Proposition Service to Asian Hub Starting at 3-4 per week but building to daily Serving Origin/Destination itineraries between Wellington and: - Europe - Asia – but not Japan/Korea - Middle East - Africa
Slide 12: What markets could we serve?
What markets could we serve? Hub to Europe Asia
Slide 13: Four Questions
Four Questions 1. Enough passengers for a long haul service? 2. Can the 787 operate at Wellington? 3. Won’t the weather stop it proceeding. 4. Is it financially viable to operate long haul from Wellington.
Slide 14: Summary – Unique Demand Assessments
Summary – Unique Demand Assessments Total Long Haul Passengers Per Annum – In and Out 250000 216,621 200000 198,000 188,698 Stimulation from new service 154,000 150000 100000 Current Unique Demand 50000 0 Wellington Air NZ - Jan 06 Air NZ - June 06 Air NZ - Adjusted Airport - Wellington Airport set
Slide 15: Load Factors – Based on Unique Demand Assessment
Load Factors – Based on Unique Demand Assessment Load Factor for 266 Seat 787-9 (194,180 seats pa) 120% 111% 102% 97% 100% 79% 80% 60% 40% 20% 0% Wellington Air NZ - Jan 06 Air NZ - June 06 Air NZ - Adjusted Airport Note: Assessments based on Air NZ figures are all higher than those based on Welling
Slide 16: Summary – MIDT Origin/Destination Data
Summary – MIDT Origin/Destination Data Total Long Haul Passengers Per Day – Each Way 300 256 250 Africa 200 Mid East 150 Europe Other Asia excl Jap/Kor 100 SIN/KUL/HKG/BKK 50 0 Wellington Airport Assumes no stimulation from direct service or marketing Assumes no growth from 2005 - 2010
Slide 17: Can the 787 Operate at Wellington?
Can the 787 Operate at Wellington? Independent studies by a reputable NZ aircraft performance engineer. Those studies were done very conservatively. Assumed wet runway and nil wind – assume runway is 15% shorter. Ignores runway grooving which means that the runway is rarely ‘wet’. On those
Slide 18: Singapore Route
Singapore Route Wellington – Singapore vv Aircraft In (Landing) Out (Take Off) 787-9 266 pax 266 pax 10 tonnes freight 5 tonnes freight * Assumes wet runway and no wind.
Slide 19: Bangkok
Bangkok Wellington – Bangkok vv Aircraft In (Landing) Out (Take Off) 787-8 236 pax 236 pax 14-15 tonnes freight 7-8 tonnes freight 787-9 266 pax 250 pax 10 tonnes freight No freight * Assumes wet runway and no wind.
Slide 20: What about the weather?
What about the weather? Auckland – Recent History Since June 2005, Auckland had diversions to Wellington on 11 days due to fog. In July 2006 alone we have had long haul diversions from Auckland on three days. Long Term Trends Wellington gets far less incidence of fog than Christchurch or Auckl
Slide 21: Slide 21
Slide 22: Is Long Haul Financially Viable?
Is Long Haul is Financially Viable? On conservative assumptions, profit of $11m to $13m per annum. This is profit over and above the overheads and contribution built into airline costings. Wellington – Singapore 787-9 787-8 Seats on Board 266 236 Average Seat Load Factor 70% 70% Average Fare (one wa
Slide 23: Fare Levels
Fare Levels MIDT data suggests that the average one way fare to Singapore is USD 708. At NZD 1.00 = USD 0.65, that average fare is NZD 1089. Note: WLG-SIN vv would have strong business element (higher avg fare). We have used an average fare of NZ$930 to be conservative. About 10-11 cents /
Slide 24: Fare Levels – Indicative Fares
Fare Levels – Indicative Fares Indicative Fares WLG-SIN (one way) Low High Restricted / Saver Fares $519 $532 Flexi – some restrictions $641 $807 Fully Flexi $676 $950 Premium Economy $1038 $1270 Business $1789 $1963 First $2756 $3255 • Fares are net of government charges and taxes. • These fares ar
Slide 25: Agenda
Agenda Diverse air services are vital The Current Issue – the Proposed Tasman Cartel Long Term – Long Haul Keeping Wellington’s Infrastructure Fit for Purpose
Slide 26: RESA - Southern End
pond ome LYALL BAY Tony NEW THRESHOLO || eS basi a
Slide 27: Conditions can be harsh
aN Aue, wv! dat thar 1h s -- WellingtonAirport
Slide 28: Agenda
Agenda
Slide 29: Other Major Projects
Other Major Projects Terminal Stage 1 – Underway Terminal Stage 1c - Pending RESA North – announcement soon Terminal Stage 2 – timing to be determined
Slide 30: What about prices?
What about prices? Every five years there is an extensive and high profile process to set charges Airlines play hard ball and commercial positioning has well and truly started. According to them, they are powerless against Wellington Airport, Rotorua Airport, Hamilton Airport etc Nearly a ye
Slide 31: What about prices?
What about prices? If there is any price increase, I expect it will be very affordable and reasonable. Certainly insignificant compared to airline price increases in recent years. Also low compared to the price increases required when the terminal was built. We are talking small amounts.
Slide 32: Not only about infrastructure
Not only about infrastructure Wellington needs to put much more into promoting business and travel. Private sector participation will be required. The region is working together and there is strong business engagement. If we stick with it, the future is bright.
Wellington International Airport — pres chamber commerce on 6ix