'Irrational' Sars fears hit shares

By CHRIS DANIELS aviation writer

An "irrational" response to the Sars virus has hammered Auckland International Airport shares, but soon-to-retire chief executive John Goulter says the business is going strong.

On the day his successor was announced, Goulter said it was frustrating that investors appeared to be venting irrational concerns about Sars on the company.

Shares in Auckland International Airport have fallen more than 7 per cent in value in the past week, largely because of fears that the deadly disease will cut air travel to and from New Zealand.

Goulter, who officially steps down on September 1, will be replaced by Don Huse, who is chief financial officer of Sydney Airports Corporation.

Huse, a 56-year-old New Zealander, was chief executive of Wellington International Airport from 1991 to 1998. He also spent 11 years with Cable Price Downer Group based in Wellington, and was a director of listed energy company Trans Alta from 1996 to 1999.

Goulter said both he and Huse would be at the company for a transition period of more than a month.

The Sars outbreak had very little effect on the business, he said. Airlines were already reviewing operations as a result of the Iraq war, and there was an awareness that the market was softening.

Sars appeared to have taken on a life of its own.

"People seem to have the perception that the airport has slowed down dramatically or something. In reality it has been minimally affected in respect of levels of activity."

The airport company was one of the few that people could identify as being affected by the virus.

"There's the hotel companies, the tour companies, a whole host of other associated entities, but you can't identify them in the direct sense like you can us.

"I think the frustration is being vented on us because we're visible.

"Fundamentally the problem is the perception that Sars is causing grief to all and sundry associated with travel. The reality is it isn't.

"If things were to change we would obviously advise the market."

Goulter said the airport company would be responsible and tell the market if it thought Sars was making a significant change to the business or its profit expectations.

"It's unfortunate that the perception is we're all living under the threat of plague and pestilence."

The market seemed to react favourably to the new chief executive, with Auckland Airport shares rising 12c, finishing the week at $5.03.