Christchurch International Airport Limited (CIAL) Analysis

Overview

Christchurch International Airport Limited (CIAL) is the owner and operator of Christchurch International Airport (Airport). Primarily, CIAL is responsible for the efficient and safe operation of the Airport, whilst aiming to provide the Airport's diversity of users with modern, appropriate and efficient facilities and services.

The Crown (i.e. the New Zealand Government) has a 25% shareholding in CIAL and such ownership is exercised through two shareholding Ministers, being the Minister of Finance and the Minister for State-Owned Enterprises (who each hold 12.5%). The remaining 75% is owned by Christchurch City Holdings Limited, a 100% owned subsidiary of the Christchurch City Council.

The Airport is located 10 kilometres northwest of Christchurch city centre, on the western city development edge and is a critical piece of significant national and regional infrastructure. As the gateway for Christchurch and the South Island, the Airport is New Zealand's second largest airport and is the busiest air connection for South Island trade and tourism markets.

There are four airlines providing domestic services from the Airport, and nine operating short and long-haul international services. CIAL welcomed more than 6.5 million passengers in the 2017 financial year.

The Airport owns or leases (in perpetuity) around 1,000 hectares of land, which includes:

- a two-runway system (that are not subject to any curfew) with a main runway and a cross wind runway that intersects the main runway;

- the recently developed CIAL terminal complex; and

- infrastructure and airfields.

The Airport is one of only two in New Zealand capable of handling direct long-haul international services operated by "wide-bodied" aircraft. (i.e. direct services to international destinations other than Australia).

Within the Airport terminal, CIAL leases space to a wide variety of businesses including airline operators, duty free shops, food outlets, retail and rental car operators. The Airport also has car parking facilities, and significant ground and property leasing activity across the greater airport campus. On the airfield, it leases space to airlines, freight companies, the Canterbury Aero Club and numerous general aviation businesses.

The Airport is also home to the Antarctic research programs of the United States of America and New Zealand, making it one of only five Antarctic gateway cities in the world.

Performance

The following information was extracted from Christchurch International Airport Limited's full year results, released on 27 August 2024:

Highlights:

• $233.1million - Total operating revenue (Up 15% on FY23 ($203.1m))
• $41.8 million - Underlying operating profit after tax (Up 37% on FY23)
• $37.6 million - Total declared annual dividend (Up $10 million on FY23)
• $2.36 billion - Total assets • Total Passengers - 6.25 million (Domestic + 5%, international +33% on FY23)
• Kowhai Park solar farm investment confirmed - operational by Q2, 2026
• The first airport in the Southern Hemisphere to reach Airport Carbon Accreditation Level 5, the highest level of decarbonisation

“This strong trading performance is a clear reflection of Christchurch Airport’s well-executed intergenerational strategy,” said Board Chair Sarah Ottrey.

"By concentrating on growing a diversified business of planes plus passengers plus property, we are delivering a growing and consistent revenue stream." Of the total $37.6 million declared annual dividend, $19 million was paid to shareholders in April, with a final dividend of $18.7 million to be paid following the Annual General Meeting in October. Christchurch City Council, which owns 75 percent of Christchurch Airport shares, is now set to receive a dividend injection of $28.2 million for FY24 into its investment arm, Christchurch City Holdings Limited. The reported net surplus after tax result of $22.7m, was impacted as a result of the Government’s removal of tax depreciation on commercial buildings. This change in tax treatment has had a one-off impact of $30.1m on Christchurch Airport’s reported surplus in FY24.

CEO Justin Watson said, “The launch of United Airlines new direct service to San Francisco, the return of China Southern and Cathay Pacific, along with increased international capacity from Air New Zealand, Qantas, Singapore Airlines, and Fiji Airways, has cemented Christchurch Airport's position as the most important gateway to the South Island.”