Hamilton Airport had a $15m terminal upgrade last year.
Hamilton Airport had a $15m terminal upgrade last year.
Air New Zealand’s fleet issues and the timing of new aircraft delivery to resolve them could continue to dog Hamilton Airport’s fortunes in the next two financial years, its chairman suggests.
Barry Harris, chairman of Waikato Regional Airport Ltd, parent of the airport and associated business subsidiaries, said in itsFY24 annual report that reduced passenger seat capacity had complicated the effect of a softer tourism and travel market.
“An additional set of complications faced our airline activity, with Air New Zealand suffering from shortages in capacity arising from global engine recalls on Airbus A320 fleets and labour challenges.
“Reduced seat capacity has constrained growth possibilities from our airport, and based on timelines from manufacturers to deliver new aircraft and resolve fleet issues, seems destined to play a notable role in the airport’s fortunes over the next two financial years.”
The group’s before-tax profit dived in FY24, attributed to belt-tightening by travellers in the economic crunch and a forecast drop in land sales income.
Owned by five Waikato councils, the group reported a pre-tax profit of $3.6 million, down from $18.6m in the 2023 financial year. The net loss after tax was $3.4m compared to a profit of $18.4m in FY23.
However, operating revenue was up at $18.8m, against $18m the previous year. Revenue from all subsidiaries and operations was $24.2m, compared to $43.6m.
The group comprises Hamilton Airport, the airport’s Jet Park hotel, industrial and commercial development arm Titanium Park and Hamilton and Waikato Tourism.
Group chief executive Mark Morgan said the fall in land profit was not a surprise.
“In 2022-2023 we saw record sales for Titanium Park with the successful completion of the fifth stage of the central precinct. We anticipated we would not get the same return from land sales this year and expect that to continue in the near future given the staged nature of our property development activities,” he said.
Land sales revenue in FY24 was $3.6m, compared to $14.7m in 2023.
Non-cash valuation adjustments contributed a net $1.4m to the group result.
Morgan said while aeronautical activity income rose, airline passenger numbers and hotel occupancy fell.
“Those trading businesses have definitely been impacted by some belt-tightening from domestic travellers and some very challenging economic conditions.”
The annual report shows 371,000 passengers passed through the airport in FY24, compared with 378,000 the previous year. Aircraft movements increased to 32,000 from 31,000. Aeronautical income of $6.1m was well up on $5.39m in 2023.
The slow tourism market resulted in a combined loss of $500,000 for the airport and the Jet Park Hamilton Airport Hotel.
Last month the airport announced direct transtasman flights would return to the city for the first time in 12 years, with Qantas subsidiary Jetstar providing services from June. If successful, the service is expected to bring 100,000 extra passengers from 2026 through the airport’s terminal, upgraded last year recently for $15m.
Waikato Regional Airport Ltd chairman Barry Harris (left) and chief executive Mark Morgan.
Continued investment in Titanium Park accounted for around half of the group’s $7m capital expenditure across its assets in FY24, chair Harris said.
Fees paid to seven directors in FY24 were $313,000, against $242,000 to nine directors in 2023.
Eleven employees were paid $100,000 and more in FY24, including salary and performance bonuses, compared to 10 the previous year.
The top remuneration, including salary and performance pay, was in a range of $410,000-$419,000, according to the annual report. In the previous year, the top pay is shown as $390,000-$399,000.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the $26 billion dairy industry, agribusiness, exporting and the logistics sector and supply chains.
