Wellington Airport Interim Results

Strong growth on the international market saw passenger numbers increase by 4.2% with increased capacity provided by the Air New Zealand/Virgin trans-Tasman alliance and Qantas. Melbourne capacity grew by 8.5% and Brisbane by 5.3% and overall load factors were maintained on international services. Wellington is becoming increasingly recognised as an international business and tourism destination. Australian visitors to Wellington Airport continue to increase strongly and are up over 15% for the last 12 months which is significantly higher than the New Zealand average.

Wellington is also bucking the trend for visitors to New Zealand from the UK/EU and US markets, where visitor arrivals have declined. Over the last 12 months Wellington has seen a continued increase in UK/EU visitors (+11%) on the back of the Rugby World Cup 2011 and US visitors (+40%) further emphasising the strong ties Wellington has with the film and IT industries in California.

Over 1,000 people fly in and out of Wellington's catchment every day to/from a long haul destination. The strong demand for long haul travel is supported by a highly mobile and affluent Wellington market which has the highest GDP per capita in New Zealand and the highest proportion of business travellers. Wellington Airport is actively marketing this proposition to the airlines which have a suitable fleet and network configuration to connect New Zealand's capital to a well serviced hub in Asia.

Domestic passenger numbers were up 1.3% with strong growth by Jetstar. The new daily Jetstar service direct to Queenstown is providing a new opportunity for the people in the greater Wellington region and its visitors to travel to Queenstown with low cost fares. We expect competition to further increase with the introduction of the airline's 9th aircraft into New Zealand offering an additional 500,000 annual seats into the Wellington market. Air New Zealand's recently announced low-fare "Night Rider" service is also expected to deliver growth in domestic traffic over the remainder of the financial year.

The planned developments for future passenger growth and investment in infrastructure will ensure Wellington Airport continues to remain one of the top

Wellington Airport produced a solid performance for the period with an EBITDAF of $39.4m excluding subvention payments. Whilst this result reflects a good growth in revenue it also reflects the Airport's ongoing focus on efficiency and the Airport remains one of the most efficient airports in Australasia. With growth in both commercial and aeronautical activities, the ongoing contribution to the region's economy included delivering an $8.8m dividend to the Wellington City Council in 2012.

Strong growth on the international market saw passenger numbers increase by 4.2% with increased capacity provided by the Air New Zealand/Virgin trans-Tasman alliance and Qantas. Melbourne capacity grew by 8.5% and Brisbane by 5.3% and overall load factors were maintained on international services. Wellington is becoming increasingly recognised as an international business and tourism destination. Australian visitors to Wellington Airport continue to increase strongly and are up over 15% for the last 12 months which is significantly higher than the New Zealand average.

Wellington is also bucking the trend for visitors to New Zealand from the UK/EU and US markets, where visitor arrivals have declined. Over the last 12 months Wellington has seen a continued increase in UK/EU visitors (+11%) on the back of the Rugby World Cup 2011 and US visitors (+40%) further emphasising the strong ties Wellington has with the film and IT industries in California.

Over 1,000 people fly in and out of Wellington's catchment every day to/from a long haul destination. The strong demand for long haul travel is supported by a highly mobile and affluent Wellington market which has the highest GDP per capita in New Zealand and the highest proportion of business travellers. Wellington Airport is actively marketing this proposition to the airlines which have a suitable fleet and network configuration to connect New Zealand's capital to a well serviced hub in Asia.

Domestic passenger numbers were up 1.3% with strong growth by Jetstar. The new daily Jetstar service direct to Queenstown is providing a new opportunity for the people in the greater Wellington region and its visitors to travel to Queenstown with low cost fares. We expect competition to further increase with the introduction of the airline's 9th aircraft into New Zealand offering an additional 500,000 annual seats into the Wellington market. Air New Zealand's recently announced low-fare "Night Rider" service is also expected to deliver growth in domestic traffic over the remainder of the financial year.

The planned developments for future passenger growth and investment in infrastructure will ensure Wellington Airport continues to remain one of the top Australasian Airports and the most cost effective. $100m is planned to be invested over the next five years in capital developments including the expansion of the Southern Terminal to allow for growth, provide better amenities, additional gate lounge space and parking area for aircraft.

Standard & Poor's revised its credit rating outlook for WIAL during the period to positive from stable, and affirmed its 'BBB+/A-2' issuer credit ratings. This rating reflects WIAL's passenger growth and expectation that its credit metrics will remain stable over the medium term.

The Commerce Commission is required to review the effectiveness of the new information disclosure regime regarding aeronautical activities at New Zealand's three main airports. This review is due to be completed for Wellington Airport by the end of 2012. The Airport concluded price consultation with its airline customers for the period to 31 March 2017 on 1 March 2012 and has provided full disclosures on its new prices in accordance with the Commission's guidelines. In its review of the effectiveness of the new regime, the Commission has released a draft report on Wellington Airport's investment, innovation, quality of service, efficiency and charges. The report found that the Airport delivers a quality passenger experience and that current charges are below the Commission's benchmark calculation. However, the report also identified that planned future price rises may generate returns above benchmark levels. Wellington Airport is reviewing the findings set out in the draft report as it does not appear to recognise the overall forecast returns which are in line with the Commission's guidelines. WIAL remains committed to the new information disclosure regime and to ensuring that it is given sufficient time to be fully tested.

As the first and last impression of Wellington, the Airport is thrilled to be able to support The Hobbit: An Unexpected Journey premiere. Working with Weta Workshop, a giant sculpture of Gollum has been created which will amaze all visitors with its beauty, scale and intricate detail. Wellington Airport has also renamed its terminal from 'Wild at Heart' to the 'Middle of Middle Earth' during The Hobbit premiere events.

The Wellington Airport Regional Community Awards and Wild at Heart Spirit Awards were just held recently and the Airport is also very proud of its other main sponsorships; The Wellington Phoenix, Life Flight Trust, Wellington High Performance Aquatics, World of WearableArt™ Awards Show, Visa Wellington On a Plate, Marine Education Centre, New Zealand International Arts Festival, Wellington Fashion Week, The Wellys, Surf Life Saving, and Refugee Services.