Queenstown Airport half-year results reflect volatile operating environment

Overlooking Queenstown Airport during Winter4

Queenstown Airport Corporation’s (QAC) interim results* for the six months ended 31 December 2021 reflect the continuing impact of the COVID-19 pandemic and associated travel restrictions on the aviation sector. Activity at Queenstown Airport for the period was significantly lower than the previous year.

  • QAC’s revenue down 6.4% to $12.7million
  • Reported Net Profit After Tax down 63% to $0.81million
  • Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) down 30% to $6.3 million
  • Total passenger numbers (arriving and departing) reduced by 27% to 494,965

QAC Board Chair, Adrienne Young-Cooper said the company’s focus continued to be on the stabilisation of the business and safeguarding the core capability to operate vital airport infrastructure in the Southern Lakes region.

Mrs Young-Cooper said: “Nationwide and regional lockdowns and movement restrictions were in place for more than half of the six-month reporting period, resulting in significantly reduced passenger and aircraft movements. There were no flights between Auckland and Queenstown, usually our busiest route, for 178 days creating an extremely challenging business environment.”

Just under half a million passengers passed through the Queenstown Airport terminal over the reporting period, down by 27% on the previous year.  Domestic passenger arrivals and departures decreased by 30% to 482,005. The trans-Tasman ‘bubble’ was open for a short period from April 2021 to July 2021. In July there were 12,960 international passenger movements and none for the remainder of the year.

Total operating expenditure increased from $4.5m to $6.4m compared to the corresponding period in 2020. 

Mrs Young-Cooper said: “Operating expenditure continues to be well below pre-COVID-19 levels. In the first phase of our response, operating expenditure was significantly reduced. All non-essential expenditure was paused, and the company’s employee remuneration costs decreased as a result of a reduction in employee numbers and the employees’ salary sacrifice contribution.”

“The increase in total expenses in the reporting period compared to the previous year can be attributed to the resumption of some operating expenditure necessary to ensure organisational resilience and preparedness for recovery, including a 10% increase in our workforce.”

“In acknowledgement of the contribution that the salary cuts taken by employees made to the stabilisation of the business during the first phase of our COVID-19 response, the board of directors approved a partial repayment of the amounts sacrificed. These repayments were made during the reporting period. No employee incentives or bonuses have been paid for the last two years,” Mrs Young-Cooper said.  

““We continue to ensure that our operational and capital planning is prudent and cautious. We are confident that this approach has enabled the company to be well positioned to weather the ongoing challenges,” said Mrs Young-Cooper.

Chief Executive Officer, Glen Sowry said the emergence of the new Omicron variant required the company to further refine its business continuity plans and that QAC was continuing to work closely with other airports, partner airlines and government agencies on the national pandemic response through the New Zealand Aviation Coalition.

Businesses operating at both Queenstown and Wānaka airports have been severely impacted. Mr Sowry said: “Providing support to the operators at the airports has been an integral part of our response. In 2020, we implemented a broad support programme, including rent relief. To date 68 tenants have received support, valued at $9.85 million, and $2.6 million for the reporting period. All businesses at Queenstown Airport are continuing to operate.”

Construction on the $8 million Queenstown Airport Terminal Upgrade Programme, which is significantly expanding the departure screening area, continued throughout the reporting period and is due to be completed in April 2022.

In November a 5-year management services agreement with QLDC was formalised. QAC will operate and manage Wānaka Airport but does not have responsibility for long-term planning and capital investment decisions for Wānaka Airport.

QAC is also progressing its sustainability strategy focused on three pillars: People, Planet and Prosperity. A full progress report will be included with our annual results.

Mr Sowry said: “The operating environment continues to be challenging, and the pace and timing of recovery is dependent on a wide range of factors. We are confident that Queenstown Airport is well positioned to serve the needs of the community and to support the recovery of the local economy with excellent domestic and trans-Tasman links which support businesses in the Southern Lakes region and connect the local community with New Zealand and the world.”

QAC’s full interim report*, 31 December 2021 is available here. 

* Unaudited