Airport at night

Airport revenue up - CEO gets a pay rise

  • Aug 21,2019

The Queenstown Airport Corporation annual report has been released today, showing improved financial results but remaining silent on any significant effects from the current expansion freeze or possible future scaling back of the Statement of Intent that governs the corporation's strategy.

We've published the full media statement below along with a series of questions that we put to CEO Colin Keel, followed by his answers. It's noted in the annual report that one employee went from a band that runs up to $500,000 to a new band that runs up to $550,000 - that would be a pay increase for Mr Keel. A total of fifteen staff are being paid more than $120,000 a year - up from twelve staff last year. Apart from Mr Keel, four staff are earning more than $220,000 a year.

Here's the QAC statement - followed by Mr Keel's answers to our questions.

"Strong revenue delivers solid annual result for Queenstown Airport Corporation

- Revenue up 9% to $49.6 million

- Profit for the year up 11% to $16.6 million

- Annual dividend of $8.2million declared to shareholders Queenstown Lakes District Council (QLDC) and Auckland Airport (AIAL), equating to $6.2 million returned to the Queenstown Lakes District community or $237 per rateable property in the district.

Queenstown Airport Corporation (QAC) delivered a solid result in the financial year ended 30 June 2019 with total revenue up by $3.9 million (9%) to $49.6 million. This was a result of increases in both aeronautical and commercial revenue, and effective cost controls.

Reported Net Profit After Tax was $16.6 million, up $1.6million (11%) compared to the same period last year. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by $2.7 million, or 9%, to $34.3 million.  

QAC declared a total dividend of $8.2 million to its two shareholders Queenstown Lakes District Council (75.01%) and Auckland International Airport (24.99%) for the year ended 30 June 2019 in-line with the Company’s dividend policy. For majority shareholder Queenstown Lakes District Council, this is a dividend of $6.2 million, which equates to $237 per rateable property in the district. 

The Company’s continued investment in airfield and terminal infrastructure resulted in an increase in the cost of depreciation and funding costs. New capital investment in this period included the full apron overlay, noise mitigation activities and ongoing terminal improvements.

QAC Board Chair Prue Flacks copy

QAC Chair Prue Flacks

QAC Chairperson Prue Flacks said the Company continued to invest in Queenstown Airport to maintain and expand existing terminal infrastructure, improve operational resilience and enhance the customer experience, investing more than $16 million this year to help achieve these goals.

“The health, safety and security of residents, visitors and staff at both airports remain a priority and we have continued to make operational enhancements in a number of areas. Continued investment in technology and other innovative solutions to improve the customer experience was also a highlight,” Mrs Flacks said.

A total of 2,321,347 passenger movements (arrivals and departures) were recorded at Queenstown Airport this year, an 8% increase on the same period last year, with international passenger numbers up 10% to 655,950 and domestic passenger numbers up 8% to 1,665,397. While there has been an increase year-on-year in passenger numbers, the demand for scheduled services to and from the region is moderating.

General aviation (fixed wing and helicopter) movements at Queenstown Airport were down 6% on the same period last year, while private jet movements remained constant. At Wanaka Airport, general aviation movements (fixed wing and helicopter) were 50,614, up 12% on last year. Combined, the airports enabled over 90,000 general aviation movements.

In terms of future planning, Mrs Flacks said: “QAC acknowledges that the district spatial planning work being undertaken by QLDC, in conjunction with Government, will provide an overarching framework for our future airport planning.  We also welcome QLDC’s proposed independent assessments of the economic and social impact of future airport development on the district and its communities,”

“Our planning will be closely aligned with the district spatial plan as we want to ensure we have a strong mandate to go forward with the future development of Queenstown and Wanaka airports,”

“We are focussed on ensuring that the business operates sustainably from an economic, social and environmental standpoint, while maintaining the highest levels of safety, efficiency and customer service,” Mrs Flacks added.

Crux put the following written questions to QAC Chief executive Colin Keel and we publish his answers here in full and unedited.

Are you pleased with the results?

Yes. QAC has delivered a strong2019 annual result and I’d like to acknowledge the team across both airports for their work in achieving these results. 

We are pleased to declare a total dividend of $8.2 million to our two shareholders Queenstown Lakes District Council (75.01%) and Auckland International Airport (24.99%) for the year ended 30 June 2019. For our majority shareholder QLDC, this is a dividend of $6.2 million, which equates to $237 per rateable property in the district.

What are the market and operational factors that have influenced the results?

Keel MR Friday3

Airport CEO Colin Keel - now on up to $550,000 a year.

Queenstown Airport Corporation (QAC) delivered a solid result in the financial year ended 30 June 2019 with total revenue up by $3.9 million (9%) to $49.6 million. This was a result of increases in both aeronautical and commercial revenue, and effective cost controls.

A total of 2,321,347 passenger movements (arrivals and departures) were recorded at Queenstown Airport this year, an 8% increase on the same period last year, with international passenger numbers up 10% to 655,950 and domestic passenger numbers up 8% to 1,665,397.

The Company’s continued investment in airfield and terminal infrastructure resulted in an increase in the cost of depreciation and funding costs. New capital investment in this period included the full apron overlay, noise mitigation activities and ongoing terminal improvements.

QAC Chairperson Prue Flacks said the Company continued to invest in Queenstown Airport to maintain and expand existing terminal infrastructure, improve operational resilience and enhance the customer experience, investing more than $16 million this year to help achieve these goals.

Are we seeing a significant downturn in tourism and therefore aviation traffic?

While there has been an increase year-on-year in passenger movement numbers, the demand for scheduled services to and from the region is moderating. The year-on-year passenger movement growth in FY2018 was up 13% and for FY2019 it was up 8%.

General aviation (fixed wing and helicopter) movements at Queenstown Airport were down 6% on the same period last year, while private jet movements remained constant. At Wanaka Airport, general aviation movements (fixed wing and helicopter) were 50,614, up 12% on last year. Combined, the airports enabled over 90,000 general aviation movements.

What are the pointers in this years results that give a feel for the next 12 months?

In terms of future planning, Mrs Flacks said: “QAC acknowledges that the district spatial planning work being undertaken by QLDC, in conjunction with Government, will provide an overarching framework for our future airport planning.  We also welcome QLDC’s proposed independent assessments of the economic and social impact of future airport development on the district and its communities,”

“Our planning will be closely aligned with the district spatial plan as we want to ensure we have a strong mandate to go forward with the future development of Queenstown and Wanaka airports,”

“We are focussed on ensuring that the business operates sustainably from an economic, social and environmental standpoint, while maintaining the highest levels of safety, efficiency and customer service,” Mrs Flacks added.

Will the freeze on airport  expansion plans hit next years results - as suggested by Mayor Jim Boult? In what way and to what extent?

QAC welcomes the recent announcement by QLDC that it will undertake independent economic and social impact assessments of the impact (positive and negative) of future airport development on the district and its communities.  This work will further inform our long-term planning, and the impact, if any, on the Company’s future trading performance is at this time unclear.

 Read the full annual report here.

 

 

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