Auckland Airport acquires 25% of Queenstown, to boost strategic alliance: Airport share wrap


Auckland International Airport Ltd (AIAL) acquired (08-Jul-2010) an initial 24.99% shareholding of the increased capital in Queenstown Airport Corp by subscribing for approximately 4 million new shares at a price of NZD6.91 per share for a total consideration of NZD27.7 million.

  • Auckland International Airport Ltd (AIAL) acquires a 24.99% shareholding in Queenstown Airport Corp, with an option to increase its stake to 35%.
  • The acquisition aims to strengthen AIAL's balance sheet, allow dividend payments, and enhance cooperation in retail activities, property development, and aeronautical operations.
  • AIAL's collaboration with Queenstown Airport has contributed to a 36% increase in Queenstown/Auckland traffic over the past year.
  • AIAL previously purchased a 24.55% stake in North Queensland Airports to boost passenger traffic to Auckland, particularly from Asia.
  • Shares in Auckland Airport increased by 1.1% following the acquisition announcement.
  • Infratil, MAp, and Australian Infrastructure Fund experienced varied share price movements in the South Pacific region.

AIAL has an option to raise its stake to as high as 35% up to 30-Jun-2011. Funds from the sale will allow investment in capital works and strengthen the balance sheet, allowing dividend payments. The companies will also work together on retail activities, property development and aeronautical operations.

AIAL's CEO, Simon Moutter, stated the company has already "been cooperating informally with Queenstown Airport in our marketing to airlines and the travel trade to create a stronger North/South Island itinerary proposition. We've had a very positive response, which has been a key contributor to an estimated 36% uplift in Queenstown/Auckland traffic over the past 12 months. This experience gives us confidence we can achieve even faster growth through a formal strategic alliance."

Shares in Auckland Airport increased 1.1% yesterday, while they remained flat in early trade on the NZSX today.

Expansion in Australia

AIAL has gone from being a target (from DAE and Canadian super funds prior to the global financial crisis) to an active investor. In Jan-2010, AIAL agreed to purchase a 24.55% stake in North Queensland Airports (NQA) - the operator of Cairns and Mackay airports - from Westpac Bank for NZD166.5 million (USD123.4 million).

Mr Moutter stated the primary motive for the purchase was to increase passenger traffic to Auckland, particularly through Asia, as the Queensland airports continue to push for traffic from Asia. At the time he stated he was hopeful the stake would boost passenger numbers through Auckland Airport by 100,000 a year within the next five years.

See related report: Auckland Airport should be on a winner buying into Cairns and Mackay Airports. Who's next?

Elsewhere in the South Pacific region yesterday, shares in Infratil closed 0.6% higher, MAp traded 1.5% lower and Australian Infrastructure Fund lost 2.6%.

See CAPA Hot Issue page on Airport Privatisation & Ownership.

Selected airports daily share price movements (% change): 07-Jul-2010

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