[Foreign language]. Good morning, and welcome to today's 2023 annual meeting. I'm Patrick Strange, Auckland Airport's Chair. With us today are my fellow directors. There they are, Julia Hoare, Tania Simpson, Christine Spring, Mark Cairns, and Dean Hamilton, along with our CEO, Carrie Hurihanganui. Director Mark Binns, most of you know well, is unable to be with us today, and he sends his apologies. Julia is standing for re-election and will address the meeting a little later. Also today, we have our General Counsel, Ian Beaumont, our CFO, Phil Neutze, and other members of the senior team. Also, our auditors from Deloitte, who are in the front here. Thank you. We have a quorum of shareholders, so I declare the meeting open. First, the phones will be available to ensure that your comments or questions are conveyed to everyone present here and those online.
Please wait for the microphone prior to asking your question. Those of our shareholders participating online will have the ability to ask questions and vote through the virtual meeting platform. A member of our legal team will read those questions out at the appropriate time of the meeting, so everybody attending the meeting can also hear them. If you require any assistance online, refer to the virtual meeting online portal guide or call the helpline, which is specified. And just a note, we may get similar questions online, so we may amalgamate the questions of a very similar nature. If at the end of the meeting, you don't feel your question was addressed or you'd like to discuss it more, please contact us via the investor page on our website.
Those in attendance, of course, you hang around for a coffee and everything and, and bug our executive management team. They usually know a lot more than the board. All of the resolutions put to shareholders today will be decided by way of a poll. The polls will be administered by our share registry, and the results will be announced by both stock exchanges sometime today after the close of the meeting. Now, the meeting order. The notice of meeting was sent to shareholders on the 18th of September and to the auditors, and it was also posted on our website. The financial statements for the year ending 30th of June 2023, and the audit report are included in the annual report, which is available online, and I think there are some hard copies out in the back.
Representatives of Deloitte are available to answer any queries that might relate to audit matters. Now, following my address, Carrie will provide a review of the year, after which we will consider the motions and then receive questions. Now, first, an apology, really, to those in attendance here at Eden Park today. Last year, I stated my ambition to hold the next meeting at the airport, if possible. We did try, but the logistics, just particularly with all the construction going on, proved too difficult, particularly making it easy for you, our shareholders, to get there. So it remains an ambition, but we might have to wait a few years. Now, looking at the last year, we moved 15.9 million passengers through Auckland Airport's terminals.
That was up 184% on the year before, though still short of the 21 million we achieved in 2019, the pre-COVID, last pre-COVID year. This lift in passengers is reflected in our financial performance. Some key numbers for the 12 months to the 30th of June, our revenue was up 108% to NZD 626 million. Operating EBITDAFI was up 175% to NZD 397 million. Reported profit after tax was down 77% to NZD 43.2 million, but that's due principally to non-cash, non-cash asset revaluations, which of course, fall as interest rates go up. Similarly, earnings per share were down 78% to NZD 0.029.
If you remove those one-offs, we re-recorded a net underlying profit after tax of NZD 148 million and an underlying net profit per share of NZD 0.101. We also paid our first dividend in three years, and that dividend was based on the second half earnings, not the full year, consistent with our understandings with our lenders, the banks. We introduced our dividend reinvestment plan for the dividend, and we're really pleased to see shareholders representing almost exactly a third of our shares participate, which is very high for the first time through. Now, aviation. Coming out of COVID, there was worldwide uncertainty as to the speed of passenger recovery. Initially, there was a very strong bounce. I think people call it revenge travel, as people made up for deferred travel.
But pleasingly, demand has just continued to grow strongly since that has passed through. By June 2023, passenger numbers through your airport were running at 88% of the numbers we recorded in June 2019, the key pre-pandemic reference month. Domestic passengers saw a near doubling, 90% to 8.1 million passengers in the last financial year. However, it was the volume of the international passengers that really moved our needle. Numbers are up more than fourfold to 7.2 million. This is despite international airlines and Air New Zealand here being limited by a global shortage of aircraft and crew, and some very high fares on, on many of our key routes. We still have some catching up to do, but in big picture terms, we are really pleased with that passenger trajectory and can feel optimistic about continued growth.
Now, just to note, we do have to work really hard to encourage international airlines to fly here because they're sitting, looking at many options for those scarce planes. And, you know, they look for where they're gonna get lots of passengers and where they're gonna make good margins. And the company's success in getting some really key international operators to choose Auckland is really pleasing, and it's great for New Zealand Inc. and for our economy. And Carrie will cover this in more detail. Longer term, forecasting is less sure, but the common consensus worldwide of the experts is that international travel to places like New Zealand will continue to grow. And really, the industry's success in addressing the greenhouse gas issue is one factor on how strong that growth will be, somewhat lesser versus somewhat greater.
Now, with the return of travel comes the responsibility of looking after our customers, and we'd like to acknowledge that the year threw challenges at us, and that this impacted travelers, including probably some of you's airport experience. First up, global aviation staffing shortages and some pretty nasty Northern Hemisphere weather saw lots of passengers arriving last year at Auckland without their bags over the summer, which is a real problem. Then, close on that, we had the historic floods, which closed our international terminal for 37 hours. And then, as you'll be aware, more recently, we've had unacceptable delays clearing international passengers at peak times of the day. And as someone who comes back from Australia occasionally, that peak time, one of the big peak times, is between 1 A.M. and 3 A.M. in the morning, which might surprise you.
We certainly apologize to travelers who have been affected. The job of bringing passengers across the board is critically important, and it really requires a smooth running of a whole ecosystem, which is teamwork between all the players, the airlines, their ground handlers, customs, Biosecurity New Zealand, and Auckland Airport. Carrie will discuss it in more detail, but I'd really like to thank her and her team, particularly those on the front line, for their round-the-clock efforts in recent weeks. And I know Carrie personally has been in that hall sort of experiencing, you know, into the dark hours of the night, et cetera, which is a, you know, setting a great example for everybody.
While some operational challenges do remain, clear improvements have been made, meaning a better experience for travelers, and this will continue as we look forward to our summer peak or northern winter, as aviation calls it. Last on that issue, look, thanks to our customers who have been really generous in their understanding, but it's not the way we or the airlines or the government border agencies like to do things at Auckland Airport, so it's getting massive attention to fix it. Now, talking about the future, with the return of international routes and services and growing passenger volumes, we are really focused on our strategy of building a better future and serving the New, New Zealand community as we best as we possibly can.
We are our country's principal and easily the largest gateway, and we, the airport, have a responsibility to make the right long-term investment decisions, so we can deliver the critical assets needed to support travel, trade, and the well-being of our wider economy. I'm really pleased to be able to say that we're underway with our most important journey yet, which is delivering a major infrastructure development program, which will bring greater resilience and sustainability to the airport for the next generations. It is a prudent investor that will uplift the traveler experience for everyone, ensure a better service to our airline partners, and, most importantly, avoid capacity constraint in New Zealand's key gateway while protecting the value of your asset as our shareholders.
That development is centered around the replacement of the aging, which is probably a kind word, domestic terminal, with a new terminal integrated with the existing international terminal. That development is totally consistent with our long-term development plan, agreed over a long time and fully agreed with the airlines pre-COVID. Unfortunately, COVID cost us several years, and post-COVID, in infrastructure worldwide, there's been a step change in infrastructure costs, you see it everywhere, to which we are not immune. And principally due to the increased cost, Air New Zealand and the Board of Airline Representatives ultimately decided not to back the plan for a new domestic terminal. But our current plans are clearly the best alternative, and delaying or doing nothing is simply not an option, and nobody has put up an alternative.
We acknowledge that transforming the infrastructure will be not easy amid a very busy working airport, and it won't be cheap. So we'll continue to listen, engage, listen to and engage with the key stakeholders, including our customers. But it's a challenge we, your board and management, will not shy away from. I think Auckland and New Zealand have had enough of deferred infrastructure, and if it weren't for the bad pandemic, that build would already have been well advanced, with some opening dates starting to be talked about. Any further delays just add to the cost for future generations and make it harder to build. And you can be assured that we are taking all efforts to redevelop in the most capital-efficient way we can and with the least impact on traveler experience. And I've got to say, the team is doing really well.
Now, that feeds through to aeronautical pricing, and new pricing took effect on the first of July of this year, after extensive consultation with the airlines and after we'd had a 12-month freeze post-COVID to help the airlines get going after the pandemic. Now, in aviation jargon, that's called Price Setting Event 4 or PSE4, if you're wandering around our offices. And it applies to fiscal year 2023-2027, during which we're building some north of NZD 3 billion worth of regulated capital assets. The increased capital, plus the increase in global interest rates, which do have a strong impact. When they go up, our prices go up. When they go down, our prices go down. They see our domestic charge, which is per passenger, rise by NZD 3.50 from a low base of under NZD 7 to about NZD 10.25 over the 2024 year.
By 2027, they will be at a very similar level to the current charges at Wellington and Christchurch. Those new charges are being reviewed at the moment as normal by the Commerce Commission, to make sure we've followed the rules, which is scrutiny we welcome. There will be further changes in the next pricing period from 2028 as that new capital is commissioned. And it's probably gonna be a further increase, but the volume of the increase, I mean, it's impossible to forecast now 'cause it's also dependent on what interest rates go around and everybody's are doing by then, and if anybody's got the answer to that, please come and tell me afterwards. And also any changes that come through in the Commerce Commission methodology.
They are, the commission is undertaking a periodic review of this methodology called the Input Methodologies, and they did publish a prelim paper earlier this year. We and all the other airports and all their expert advisors very strongly disagreed with certain elements of their prelim paper, and very strong and consistent submissions were made to the Commerce Commission to point out areas of concern, and we would say, faulty logic in their prelim work. Look, those setting methodologies are necessarily very technical, but the impacts of getting them wrong is very real, and we would hope and believe there'll be significant changes before they're finalized. Now, the airport's focus is providing a very safe, secure gateway for New Zealand, but the company's activities, as you know, as shareholders, are much wider than that.
And our Building a Better Future strategy seeks to expand a thriving aviation precinct of travel, hospitality, business, retail, and trade alongside the critical aviation infrastructure, and we've made good progress over the last year. We already have over 250 businesses operating across our wider precinct, and that is set to grow. The retail business is recovering strongly as passengers return, and we have importantly transitioned to having only a single duty-free operator rather than the two competing ones, which makes better use of space and frankly, a much better experience for our travelers. Our two hotels, owned with our joint venture partner, Tainui, have performed extremely strongly over the last year, and our new hotel, The Pullman, just right next to the Novotel there, is on target to open in just a few weeks.
Our business park, under Mark Thomson and his team, The Landing, has had another great year, with new facilities for Kerry Logistics and Healthcare Logistics completed, and two more new facilities will at least be completed over the current financial year. As Kerry will share with us, that team's made huge progress on the construction and leasing of the new fashion-led retail destination, Manawa Bay, and also the NZD 300 million transport hub at the front of the, right at the front door of the international and what will be the new domestic terminals, is well down the track and will open up next year. But just talk about safety more for a moment. With so much construction underway and a lot of new faces around the precinct post-COVID, safety is a huge focus for us.
Up to 20,000 workers come to work at the airport precinct each day, and we are really focused on ensuring their safety. We've actually recently established a completely new executive leadership position, Chief Safety and Risk Officer, to bring even more focus to that, particularly through the heavy construction period ahead. But that focus starts at the... Well, starts at the board level, and particularly our senior leaders, who regularly get out across the precinct with the sole purpose of getting personal insights into safety, be it at a retailer or a subcontractor, see how different teams are managing health and safety, as well as getting a fresh eye on work sites. And this, alongside with sustained diligence and hard work of our teams, has seen reduced employee and contractor injury rates and some really good safety enhancements across our precinct. But we've, you know, we're not satisfied.
We've got ways to go. The other big push is sustainability goals, and as we invest for the future, sustainability is at the front of our mind, and our new investments will help us close in on our climate change goals and create a more sustainable airport. We're targeting a 90% reduction in Scope one and Scope two emissions from a 2019 baseline to achieve net zero carbon emissions by 2030. And we've already moved the needle. In fiscal year 2023, we had a 27% reduction against the 2019 baseline. And we've got a bold program of work to deliver the rest, and Carrie will talk some more on that. But wrapping up, it's been a big year. I'd like to thank our 580 strong team of employees, ably led by Carrie and her management team.
They've risen to the challenge of caring for our customers, a flood event and recovery, numerous projects around the airport to build the better future. And I think they've done extremely well under a lot of pressure. I'd also like to thank my fellow directors and our investors for sharing our vision of the possibilities at the airport, and for your support. Now, one note, as most of you will be aware, Phil, our Chief Financial Officer, will be moving on to a new challenge at the end of the year after 14 great years. A long time, Phil, at the airport. And we thank him for all he has done and wish him really the best for the future. And lastly, thank you, our shareholders, for your continued loyalty, particularly through some pretty difficult COVID years with no dividends, I know.
Look, better times are ahead, and I think it's hard to conceive of a more exciting and critical period for Auckland Airport. So thank you, and I'll hand over to Carrie.
Well, thank you, Patrick, and [Foreign language] . It is a pleasure to report back to you on a year in which we saw a vibrant return of activity to Auckland Airport. We've loved seeing the multitudes of returning families and friends, sports teams, holidaymakers, and business travelers to the airport. Now, hybrid combinations of these travel groups are also flourishing, such as the newfound rise of the bleisure traveler, those clever people who seek to combine business and leisure travel together. Now, after the ups and downs of the 2022 financial year, we had been forecasting conservatively for the return of travel over the 2023 year. So we've been very pleased indeed to see domestic travel and international routes and services rebound more strongly than anyone had anticipated.
Now overall, by year's end in June, international seat capacity had recovered to 90% of pre-pandemic levels, and domestic recovered to 89%. Now, the return of passenger flights also restored international freight capacity to 95% of pre-pandemic levels. Now, as Patrick has already pointed out, I'd also like to acknowledge that the journey back to operating at full capacity has not always been smooth. And on behalf of the management team, I, too, would like to thank travelers and you for your patience. I can assure you, however, that bringing a better experience to customers is our absolute priority to ensure a less stressful and more enjoyable journey for travelers. And I'd like to take a minute just to give a little more context here. Most of the recent challenges have been experienced in the international arrivals area.
Now, that's a system that is made up of airport, airlines, the airline's ground handlers, and government agencies, Customs and Biosecurity New Zealand. Now, it takes teamwork and cooperation to get the system working efficiently, and we've experienced more bumps, certainly, than we would have liked in recent times. Patrick mentioned global staff shortages in aviation continue to impact the smooth running of airline services, and organizations are experiencing issues with the recruitment and training of employees. To our own part of that system, we also have construction taking place in the arrivals hall, and we know that that constrains the space efficiency in the short term.
Now, we've pulled out all the stops alongside our airport partners to deliver improvements through a range of initiatives, and I am pleased to say that we've made great gains over the past month while ensuring the integrity of those very important border processes. Now, we've increased our frontline customer experience staff by 103%, with over 30 new staff in the last six months. Staffing in these roles is now 41% higher than it was in 2019. During the summer period, we'll be bringing in an additional 45 holiday hosts to help with that peak period. We now have separate lanes for Australian and New Zealand passport holders at MPI, and we are supporting the ground handlers to more efficiently use the baggage system for a faster return of checked bags to travelers.
Now, I can assure you that we will keep working on this until we get it right for our customers. These disappointing system issues, alongside soaring passenger numbers, however, do underscore the need for the long-term improvement projects we now have underway across nearly every aspect of airport infrastructure and operations. Now, globally, airports and airlines have rebuilt their workforces, new routes are coming on stream, aircraft load factors are high, and we are looking at a busy summer period ahead. In the 2023 financial year, we had 25 airlines flying to 40 destinations to and from Auckland Airport. On both counts, this is nearly a doubling from the toughest days of the pandemic, where we had 12 airlines servicing just 21 destinations. Now, the North American routes have been a standout feature of this recovery.
Air New Zealand now flies into seven North American cities, including its flagship New York service, and this is a leap forward for aviation that actually was not imaginable before the new generation of planes. Yet, it's not just about the Big Apple. The addition of direct routes from Auckland to Chicago and Houston, too, have brought Middle America closer to the average Kiwi. Now, in June this year, Qantas joined the New York route, building strongly on the momentum as Hawaiian Airlines, Air Canada, United Airlines, and American Airlines reconnected into Auckland, with Delta Air Lines to follow later this month. Now, we're forecasting a 29% increase in flight capacity over the November 2023 to March 2024, compared to the same period prior to the pandemic.
There is now a promising recovery on routes to and from China also, after a slower start, due to the protracted COVID response. Now, this is a key trade and tourist market for New Zealand, and Auckland Airport now has 27 flights per week, operated by five airlines to four cities in mainland China. Overall, capacity between China and Auckland had recovered to 78% of 2019 levels by the financial year's end. At September, this has jumped up to around 93% of pre-pandemic capacity, and by the end of December, it will be 103%, with the recently announced Auckland-Hangzhou services, which really highlights the velocity of this comeback over the last year. Now, here in our own backyard, trans-Tasman connectivity is back to 91% of pre-pandemic capacity.
Veterans on the route, Air New Zealand, Qantas, and Jetstar, have been joined by Air Asia X, flying between Auckland and Sydney, with Batik Air starting on the Auckland-Perth route in August 2023. And finally, we also welcome Jetstar starting a new daily service between Auckland and Brisbane. So all up, a healthy and growing picture for supply and demand for aviation, and the winners in all of this are all of us. Intrepid New Zealanders with a hunger to see the world and offshore visitors with a desire to see our amazing country. Now, alongside the return of airlines, we are investing in the airport's long-term future, as mentioned by Patrick. As New Zealand's international gateway, we need to build in greater capacity and resilience, so we can enable our country's prosperity rather than hold it back.
Our commitment to new infrastructure lies across three key areas: our terminals, our transport hub, and on our airfield. We're not hiding from the fact that our 57-year-old domestic terminal is reaching capacity. By the end of this decade, or actually right now, travelers will demand a lot more than the experience currently offers. While airlines also have much to gain by this investment, from capacity growth to sustainability outcomes and more resilient infrastructure. Now, when it opens in 2028-2029, the new domestic terminal will improve the customer experience. It will have things like built-in facilities for self-service check-in, shorter queuing times, driven by the 44% more capacity for passenger processing per hour, and a 5-minute indoor walk between domestic and international terminals. And I get a lot of feedback on the Green Line in the rain, hail, and shine, that currently is the experience.
Now, we'll also build necessary resilience into our airfield, with a 26% uplift in domestic seat capacity by providing additional gates to cater for larger jet aircraft. It'll actually be the first time since 1977 that domestic travel and international travel will be together under the same roof at Auckland Airport. We're also well down the track, sorry, on constructing a new NZD 300 million transport hub at the front door of what will be the new integrated international terminal. This will create a seamless arrival and departure experience for customers, offering an undercover connection to the international terminal and vehicle lanes that will flow through the ground floor of the building to create a modern pickup and drop-off zone for commercial and public transport.
With ongoing change and construction inside the terminal, the new transport center will smooth the overall experience with the new pickup and drop-off expected to open in March 2024, for a more streamlined arrival and departure experience. Now, the third leg of the trifecta is a historic expansion of the airfield. We're strengthening stormwater systems and converting an area the size of 23 rugby fields west of the current terminals, into an aircraft parking area capable of taking the weight of A380 aircraft. It will provide extra taxiways and 7 remote stands for layover aircraft, including 5 stands with in-ground jet fuel reticulation and other services. Now, in time, this airfield expansion will connect to the integrated terminal, a planned cargo precinct, and potentially to a future second runway.
Now, 3 years down the track in reducing scope one and two carbon emissions, our processes for measuring and making decisions which affect the environment are maturing and beginning to make a measurable difference. In 2020, we actually set a target to reach net zero scope one and two emissions by 2030, as Patrick mentioned. Now, to reach this target, we've had to map out a pathway to achieve a 90% reduction in these emissions from our 2019 baseline. Now, we plan to reduce the residual emissions, around 10%, through permanent carbon removals. And the reason those are permanent carbon removals, in some of our emergency services, firefighting, otherwise, there aren't alternatives at this point in time. But we are certainly tracking ahead of our planned pathway.
As mentioned by Patrick, this financial year, our Scope one and two carbon emissions represented a 27% decrease from the baseline year of 2019. Site redevelopment also creates opportunities to introduce far more carbon-efficient technologies. For example, we're in a phased process to electrify the country's largest air conditioning system that cools and heats our international terminal. Now, this will be the equivalent of 3,000 household air conditioning units moving to electric power rather than gas. Now, when we transition over from those six natural gas boilers that currently keep the system pumping, it will make a significant difference. This move alone will reduce our Scope one emissions by 1,500 tons of carbon per year. That's more than a third of our current total Scope one and two emissions in one fell swoop.
A 2.3 MW solar array on the roof of our new premium outlet store, shopping center, Manawa Bay, will generate enough electricity to power around 80 to 80 of the 100 stores inside. Now, like the smaller array on the roof of the transport hub, it will provide a resilient supply of renewable energy as we evolve for future growth. Now, of course, Scope one and Scope two emissions make up only a small part of our total inventory of greenhouse gas emissions. We are working closely with airlines to understand their needs and future requirements as they invest in larger, more efficient domestic aircraft and future low-carbon aircraft technology. We're also installing ground power units at each gate to supply power to aircraft to reduce fuel use and provide charging for electric ground handling equipment and vehicles on the airfield.
We will maintain our active role in Sustainable Aviation Aotearoa Group, which sees us working with industry peers and government agencies to further decarbonize the aviation industry. Now, my brief overview of sustainability would not be complete without touching on our community support efforts. We have continued our long-standing support of community organizations in South Auckland. This included distributions through the Auckland Airport Community Fund to assist with flood relief and providing funding to support the Ara Education Charitable Trust, which creates pathways into work for school leavers not going directly into tertiary education or training of any sort. Now, over the past three years, travel disruptions owing to the pandemic had a devastating impact on the retail outlets operating within our terminals. They just simply did not have the footfall that they rely on.
We've been delighted to see vibrancy return to these operations with a strong return of passenger numbers over the past year. Now, one of the largest is Aelia Duty Free, which has taken on the role as Auckland Airport's duty-free operator after winning a short-term extension of their contract until mid-2025, after we move to a single operator model. Now, as part of this transition, around 90% of the existing duty-free staff were able to transfer across to Aelia Duty Free. Within the next year, we expect to get a tender process underway for a long-term duty-free contract at Auckland Airport going into the future. Now, in the wider precinct, construction of the Manawa Bay premium outlet shopping destination is on schedule and on track to open at the end of the 2024 calendar year.
More than half of the 24,000 square meters of retail space, which is around 100 stores, have been pre-committed by sought-after international brands such as Kate Spade, Coach, Fila, and Under Armour, to name just a few. We also remain very active in the commercial and industrial development at The Landing. We've been appointed to develop new standalone facilities for IKEA, DHL, and Reece Group, all of which target a five-star green sustainability rating and will begin construction during the 2024 financial year. Ahead of that, we'll be opening our new five-star hotel in mid-December this year. That's a 311-room hotel, the Te Ārikinui Pullman Auckland Airport Hotel, which is a joint venture with Tainui Group Holdings.
This super premium hotel will be a welcome addition to the two existing hotels in the airport precinct, which have recently enjoyed nightly occupancy rates of around 90%. It simply would not be possible to manage this breadth of projects without a strong and committed team, and I want to warmly thank the whole airport team and the airport community for the progress we have made during what has been a challenging year. During the year, we reinforced our management team with the appointment of Melanie Dooney as Chief Corporate Services Officer in November last year, Surridge as Chief Operations Officer in May this year, and Richard Wilkinson as Chief Digital Officer in August. Darren Evans will join us in the newly created role of Chief Safety and Risk Officer next month in November.
I'm incredibly proud to have such a strong team around me, and I wish to also thank the Auckland Airport Board for their guidance and support amid a period of both challenges and the exciting transformation for our airport. Now, looking ahead, we continue to see a positive recovery in the aviation industry. In line with this, we are providing guidance of underlying profit after tax of between NZD 260 million and NZD 280 million for the 2024 financial year. We expect capital expenditure of between NZD 1 billion and NZD 1.4 billion for that period, and based on International Air Travel Association's outlook for global air travel, we do still expect our total passenger numbers to recover to pre-pandemic levels during calendar year 2025.
For the full 2024 financial year, we anticipate international passenger numbers will be around 92% of pre-COVID levels, with domestic passenger numbers at around 89%. Now, this would mean overall passenger numbers of around 19.1 million for the 2024 fiscal year, or an estimated extra 3.2 million passengers through our terminal doors for this financial year compared to last. We are in the midst of a once-in-a-generation major reinvestment in the infrastructure in Auckland Airport to set us up for the decades ahead. As travelers continue to return in substantial numbers, we are reinventing the travel experience and working hard to achieve ambitious reductions in carbon emissions.
Most of all, we are strongly committed to delivering a new, connected national gateway that does justice to our beautiful city of Auckland and the expectations of our global visitors when they come to Aotearoa, New Zealand. [Foreign language] . We are working for New Zealand. [Foreign language] . Thank you.
Thank you, Carrie. Now we move to the resolutions, and as I mentioned earlier, voting on all resolutions will be conducted by way of a poll. You may ask questions on each matter being put to shareholders, in person or through the virtual meeting website. If you're voting as a shareholder, proxyholder, or as a corporate representative, please use the voting paper handed to you at registration to the meeting. Those of you joining online will be able to cast your vote using the electronic voting card received when online registration is validated. To vote, you will need to click Get Voting Card within the online meeting platform, and you'll be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish.
Click for, against, or abstain as you choose on the voting card, and once you've made your selection, then you click Submit Vote on the bottom of the card to lodge your vote. Please refer to the online virtual meeting portal guide or use the help line number 0800 200 220 if you require assistance. Now, we've received 1.08 billion valid proxy votes, which represents 73% of the ordinary shares on issue. Now, moving to the board, shareholders, the company's constitution allows for a maximum of 8 directors, and as I mentioned earlier, we have 1 director offering themselves for re-election. So I'll ask Julia Hoare to address the meeting first, and we'll take any questions from the floor or online after, and we'll then ask shareholders to cast your votes for each of the resolutions.
So ordinary resolution one is the re-election of Julia. She was appointed as a director of the company at our 2017 annual meeting, and the board unanimously recommends that shareholders vote in favor of Julia's re-election. She is considered by the board to be an independent non-executive director. So, Julia?
[Foreign language]. Thanks, Patrick, and good morning to all of you here in the room and also to all of you online. I'd like to say a few words this morning in support of my re-election, and I'm really delighted to be here with you and very, very proud to be associated with Auckland Airport. It's been a real privilege to have served you as shareholders in this great company. When I reflect over the six years that I've been on the board to date, which includes my role in chairing our Audit and Financial Risk Committee, I can really break my time down into three phases. The first was a period of huge growth in aviation and tourism globally, and this delivered enormous benefits for the economy, along with our shareholders and our business.
The second phase was, of course, the COVID years, when we experienced border closures and a decimation of travel, just as we were starting to ramp up our infrastructure development program. We had little choice but to suspend much of our capital program, and as you will recall, we subsequently undertook one of the largest capital raises in New Zealand, despite the huge uncertainty which was prevailing at the time. As we come to the end of 2023, we're clearly in our third phase, and it's a really new and exciting time, I feel, for Auckland Airport, and I'm really delighted in the way that our business has rebounded, that we're open to the world, and that we're moving forward to create the gateway that New Zealand needs and for all Kiwis to be really proud of.
As I think to the future, though, and where I think I can contribute and take Auckland Airport to the next level, in addition to the skills that you would expect of me as a director and also chair of the Audit and Financial Risk Committee, I feel it's really important to also strongly focus on a couple of areas, they being sustainability and our social license to operate. There's been some discussion this morning around sustainability, and it isn't optional, and nor is it just an add-on. It's going to have to be central to everything we do as we move forward. The nature of travel and the role that airports actually play is changing, and consumers and other stakeholders push for a less carbon-intensive and more sustainable future. And as a result, sustainability is going to ultimately and fundamentally change our industry in the future.
No one knows quite how, but it's going to be enormous and inevitable, and we need to be ready to stay ahead of whatever those changes may be. In terms of maintaining our social license, we've also discussed that this morning. As we've seen play out in the media lately, Auckland Airport, and Carrie talked about this, is at the center of a vitally important ecosystem. And we have a very important role to play as the conductor of that ecosystem. We're the nation's principal gateway to the world, both for people and for valuable freight. We partner with key stakeholders who are independent of us, but whose actions can influence how the public sees Auckland Airport. We're conscious of how we conduct our role in this ecosystem. We must balance everything we do alongside the interests of stakeholders, including, of course, you, our shareholders.
I'm incredibly excited to be continuing to contribute to Auckland Airport's ongoing journey and providing governance that helps ensure positive outcomes for you as shareholders, and also positive outcomes to others, our stakeholders in the community. I've got the capacity to provide all of the support that I think I can bring to the table, so I hope I have your support in continuing to serve this wonderful business. Thank you for your time today.
Thank you, Julia. I now move that Julia Hoare, who retires and who is eligible for re-election, be re-elected as a director of the company. Are there any questions from the floor on that resolution? There being none, are there any online?
There are none online.
Okay, so there are no questions. So, I'd ask we now move to resolution two. Deloitte is automatically reappointed as auditors this year under Section 270 of the Companies Act 1993. I move that the directors be authorized to fix the fees and expense of the auditor. Are there any questions from the floor on that resolution? Being none, online?
There are none online.
Thank you. There being no questions, we will now conduct the polls in respect of the, those two motions put to the meeting. The poll will be conducted by our share registry, Link Market Services, and they will act as scrutineers. So please complete the voting paper by ticking either the for or against box, or if you wish to, abstain. Anybody here who has any difficulty here, just poke your hand up and assistance will be provided. And Link will now move through the room to collect your voting papers. Those of you participating through the virtual meeting website should now submit your votes. And as I said earlier, we'll announce the results to the NZX and the ASX later in the day. So now we can move to other business and questions, so probably the most important part of the meeting.
I now invite shareholders to raise any questions. Just before I take them, they do need to be related to the presentations or the annual report and the financial statements or other topics concerning the governance or management of your company, or any other matters that can be lawfully considered at this meeting. And again, those shareholders online, you are able to ask questions through the virtual meeting website. Do please keep your questions reasonably short and clear, and if you don't, those of you here, get a chance to get your question fully answered. As I said before, we've got a whole team here, particularly executives, who are very happy to sit down with you and talk them through one-on-one.
You will be able to easily identify the board to do that 'cause we've all got some black labels on, and the leadership team has some blue labels, but they're these people in the front here. Okay, I can now formally ask for questions, and I had a hand over here. Have you got a microphone? There you go, right behind you. And if you can just state your name, then, that will help.
Thank you. My name is Jane Arnott, and, [Foreign language] , and good morning to all esteemed shareholders and the board. My question relates to the ethical underpinnings, governance, and risk.
In particular, I'm interested in the board's performance, and I encourage you to just review some aspects. If we look at the NZX Corporate Governance Code, Principle 1, ethical standards and Recommendation 1.1, it is under the comply and explain regime, necessary for you to report on training, which should be provided regularly against the code of ethics. There was no reporting against this measure, and I put it to you that, in challenging times, your employees, many of whom may not have the grasp of English that we all have, that others have, sorry, will benefit from the guidance and leadership and the training. I also put it to you that 70% of the NZX 50 have CEOs that neither personally nor formally champion their code of ethics.
When the highest-paid executive does not champion and lead the culture of the company, I find it disappointing.
I encourage your CEO, with no disrespect, to actually look at the code and lead and state how important it is for the company. That leadership is important. I also put it to you that discretionary judgment based on values, as per best practice codes of ethics, is another important consideration. Values will provide guidance under very testing situations.
Yeah, no, it's a great.
Thank you very much.
Thank you very much, and very clearly put. Look, it's close to our hearts, and I can speak for the board and management, and we will look at our reporting against our code of ethics, policy, et cetera, and the wide diversity of the people we have. You know, your comment about people with other languages native. It's all good, and I just acknowledge the points you've made, and I think we live and die those as much as we can. Where's Mel? Mel, if you can just stand up for a minute and perhaps over a coffee, it'd be great to talk through that with you. You obviously understand it very well, so thank you for the question. Very good one. Next question? Don't be shy. There's one down here, and an old friend. How are you?
Good.
Great. Microphone's coming. Corali.
Thank you. Yes, Coralie van Camp, shareholder. There's something I don't understand from all your descriptions of your upgrading. Will I ever be able to go and park within an easy walking distance of the international terminal to pick my family up when they come and visit at Christmas?
Yes, and where's Mark Thomson? From there. Mark will come and talk to you afterwards, but you know that massive monstrosity going up called PUDO, which is why you have to park a bit further at the moment. That has how many floors of parking in it?
Four.
So right beside, but underneath it, the bottom level is a pickup and drop-off facility, where private cars can go in and drop people. So Mark will explain it to you. That's the NZD 300 million investment, which will be opened next year. And I apologize that in the interim, you have to walk through the containers and things-
Patrick.
We have to, have to build it.
Patrick, you said, Drop. What about collect?
Pick up and drop off.
Go in and wait for them?
Yes
To come through the doors in the international terminal when you haven't seen them for so long?
Yeah. Yeah. No, no, it's pick up and drop off. PUDO's out. And look, so we're getting.
So when?
When does PUDO start opening?
End of next year.
PUDO opens in April next year.
So the.
The building offices.
So the pickup, drop-off, the bottom floor will be open in April, those of you who didn't hear, and all the parking and fully open at the end of next year. Now, all that will just lead to the next problem, that the whole arrivals hall will need expansion at some point, but that's down the line a bit ... with, you know, you-
One other quick one.
Yeah, sure.
While the dust is settling on the election and trams are no longer likely to run down Dominion Road, do you see any hope for the connection with heavy rail between Puhinui and the airport?
I'm gonna give you my personal view. Auckland, we did, I mean, everybody can have their own views on light rail to the airport, and we have made facility that anybody ever wants to build it, we can accommodate it. A key part of our access is actually from the east and the south, Puhinui Road. A few years ago now, actually, Auckland Transport upgraded the Puhinui Rail Station. Have you been through it?
No, but I've heard about it.
Worth going.
It's pretty racy.
And then there's a dedicated,
That'll suit me.
There's a dedicated transit lane along Puhinui Road, and we're gonna have to upgrade that bridge, and you'll see a lot of roadworks all the way into the airport. And I think under the new government, and I'm not speaking officially here, I mean, the thing to enable that heavy rail link to Puhinui, really to make it sing, is a third and possibly fourth rail line south from the port, really, to Pukekohe at least. And I do hear from Kiwi Rail that that will be on the agenda again. It is, look, you know, transport to the airports sort of one-stop transport is important. You've probably been through Heathrow. You know, as kids, we all rode the Piccadilly line out to Heathrow, like rail or a bit more, with about 13 stops. Nobody ever rode it.
Then they put a heavy rail into Heathrow, and it's hugely occupied.
Because the Botany one that National are promising, the transit lane, that's buses, isn't it?
Yeah, but that is very important to us.
Quite a lot of our, you know, people don't just come from downtown. I don't know the number, 17% or something of journeys start in downtown. So, employees and travelers, particularly employees, a lot come from Botany area. So, you know, we're apolitical about it all, but we really see that transit corridor being built. You know, we'll do everything to help them on that and do our end. It's quite important. I will say one success over the last few years, you don't notice it now, but, you know, we redid all the roading. For those of you who come from the city, and the George Bolt Drive, the whole new loop around and out again. You sort of don't notice it, but it's a massive improvement and credit to the team on that.
I was walking over to the offices yesterday from the international terminal. The amount of traffic going through the international terminal at 6:30 A.M. is massive, and it's just flowing. It's great.
It's all very promising. Thank you.
Thank you. Lovely to see you. Another question here from the floor? Perhaps over here. Good. Microphone right over to the window.
Yeah, just given the considerable expenditure this company's engaged in, and the borrowings that it has to undertake to do that expenditure, should the company be paying a dividend?
Yeah, look, it's, we are capable and all that of paying a dividend. It's perfectly appropriate. Now, the dividend this last year was, seemed small, typically, compared with history, but of course, it was only for 6 months of the year. Yeah, no, and, and with a new dividend policy, Phil, do you want to comment on basically a cash flow type dividend policy? We'll turn it over to Phil.
Thanks, Patrick. Yeah, so, the board looked closely at dividend policy back in June, and we also looked at infrastructure businesses across Australia and New Zealand and found that the sweet spot is 70%-90% of profit. And so, we've moved the dividend policy from 100% of underlying profit to that range of 70%-90%. And for the time being, it's likely to be maintained at 70% while we judge the cadence around the infrastructure delivery and credit metrics.
Okay. Any more from the floor? There's one right behind you.
Robert Keane, a shareholder. You were talking about the January 27 floods, and in the annual report, it was talking that, as at June 30, the balance date, there were just estimates from independents to strike what they thought were the best, write-off amounts for expenses and impairment in assets. So has there been any update since balance date as to how the actuals compare to the estimates? And also, I just noted there was a, a NZD 5 million recovery from the insurers, and has there been any further receipts from the insurers to cover those costs? Thanks.
Who's got the answer? Phil?
Yes. So, so we're continuing to work through the discussions with the insurers. We, we can't comment on where that's landing just yet. It's commercially sensitive, but it'll be a number that's significantly larger than the NZD 5 million to date. And what you tend to experience with these sorts of disasters is actually, once you've been through insurance, it actually boosts profit, ironically, because the insurance pays to replace those assets, but they're somewhat depreciated over time in their current state. So, yes, there's more to come, and it's likely that the impact in FY 2024 will be net positive.
Good question. Any more from here? Perhaps... Here we go, one in the front.
Good morning. John Cleal, shareholder. As a follow-on from the question that was just asked, how much has your insurance premium increased with the latest billing?
Who shall I ask on the premium business?
Mel.
Mel, over to you. You might need a microphone.
The answer is, right at this minute, we don't know. We're in the process of our renewal for our insurance for that particular policy as we speak.
We don't anticipate major changes.
Be sure you're sitting down.
There are aspects of our business, of other businesses around New Zealand, there are some areas going up, but we don't anticipate great issues. Yeah. Okay, any more from the floor? Oh, sorry, I'm looking right past you. It's okay. Warren Gold, shareholder. Did you say you're going to one, duty-free shop? Yeah, we've gone to a single provider rather than two. When we set them up, and I don't know when the last was, probably over a decade ago, we were required by the Commerce Commission to have two. Because wouldn't it create a monopoly where they can price up- No, we have quite strong controls over how they price. So that's one issue, and it's in Mark's team, actually. You can talk to him about it. So we have quite strong... But actually, their motivations, there are competing- you know, they compete with people downtown.
There are many alternatives, so no. We, there's just many efficiencies only having one. They can carry a wider range of stock, and you don't get that, you know, do I turn left or do I turn right to buy my bottle of scotch, as they compete with each other? But no, we do not anticipate this. And the Commerce Commission agrees there are plenty countervailing measures against pricing.
And Patrick, could I, could I add to that? Just, and a lot of it is the advent of digital. So 10 years ago, when kind of the two stores was the preference, that actually digital means people can check prices and that the competition pace and the ability made, has made a significant difference.
Thank you. We can always, there's one down here.
David Russell, shareholder. As much as I'm pleased to see that Auckland Airport is expanding and building new facilities, such projects also require an acquisition of capital, as in loans and just general money. My question is this: with these debts, do you have a debt management program or just something to make public of how you're spending that type of money?
Yeah, no. Look, it's money can come from debt, and obviously, we've got a lot of headroom, various types, and ultimately equity. If, you know, you build very fast, it's a bit more. And we've always said, you know, we don't know long term. Yeah, we have a very strong treasury function and, you know, participate with, through medium-term notes and local bonds and things, USPP, traditionally in world debt markets. And look, our position's pretty good. And the guy to talk to about that after the meeting, if you want to have over a cup of coffee, who's an expert in that whole field, is Phil Neutze. So I'm sure he's very happy to chat to you because you obviously know a bit about it.
Thank you.
Perhaps, while I don't see any hands, questions online?
There are questions online. The first is from Bradley Cullen: What is the likely completion date of the proposed second runway?
There is, we have that fully consented and ready to go, so to speak, but we don't have a fixed date. It's an option right now. It will depend on how strongly numbers grow. It's a massive expenditure. You don't do it early, you know, but we've cleared all the regulatory things, so we don't know. We don't really. I mean, we probably all have different views. We wouldn't anticipate it opening for another sort of, you know, probably 2039, it'd be as early as we see it, but who knows? But it's not got an official date at the moment. It's just an option out there for us. We will work as a single runway as long as we can, as does, you know, Gatwick is a single runway, for example.
Next question from the same shareholder: What is the proposed capital budget and estimated completion date for the domestic terminal upgrade?
Carrie or Phil, who's got the number in front of them?
I might start, and then I'll hand to Phil. So we've probably two things I'll just call out. One is the current domestic terminal upgrade. So we know if our travelers are going to be going through for another 5 years, that she's a bit tired and we need to invest. So we're upgrading bathrooms, help desk, waiting areas, et cetera, to make it a better experience in the interim. So that's underway. And then, but I read that question as the replacement terminal, the integrated terminal, and the opening date for that is 2028, 2029, is what we are on target now, as construction starts proper. We've done all the enabling works, but construction starts. It's a 5-year build.
From a capital plan, if we look across the 10 years, we have NZD 2.2 billion tagged against the head house itself, the terminal, and then there is NZD 1.7 billion that is related to non-discretionary elements. If you build a bigger terminal, you also have to have roading, utilities, and other things that also service the increase of passengers that come with that. Anything else you want to add?
No, you've covered that. Perfect.
Great.
Next one.
This is a question from Dennis Lander: The NZD 0.04 dividend is an insult after years of no dividends. It should have been at least NZD 0.10. Why was the dividend NZD 0.04?
As I said, it was a judgment made by the board, and I think you can't compare it to the previous full year dividends. It, in our agreement with the banks and lenders who supported us very, very well, I think you'd say, Phil, they really came to the party during COVID, and the agreement sort of went through to December 31, 2022. So we did not resume sort of contributing to the dividends to them. So look, a full year dividend will obviously not be, I think, what do you call it? A disgrace. I think most of you quite appreciate any dividend after COVID. Next one.
Next question is from John Holmes: Can shareholders be treated as air crew when going through customs and immigration?
Well, that's a great idea, isn't it? Unfortunately, your chairman doesn't even get any. I'm afraid that's a matter for the border agencies, and New Zealand's pretty rightfully, speaking as an ex-farmer, pretty precious about its border. So no, we're not going to get any special treatment. But look, the border agency is under a lot of pressure as they have to reskill and staff up. They've been great recently, and we do have the Australian and New Zealand sort of no touch fast lane going, going again recently, which most of us here can use, and that makes a huge difference, and credit to the border agencies for getting that underway.
The next question is from an Australian-based investor thanking you for giving them an opportunity to attend the meeting via the online portal. How much does it cost Auckland Airport to conduct the meeting virtually compared to holding a physical meeting only?
I don't know that we'd have the answer right here, but if, can you tell him if he could contact us, we're quite happy after the meeting, through the portal, we're very happy to have one of the executives or you or someone just give him the exact numbers on it, we don't hide from them. But I think if we tried to quote it at the meeting, we'd probably answer question A and he'd be, you know, he'd be asking B. So if he could follow up with that, we're very happy to talk to him. Any more?
One more has just come in. With airports around the country being hit by weather disruptions over the past year, does the company find an increase of baggage being lost and an increase of customers having to wait at the airport overnight if the local hotels are at capacity?
No, we haven't had issues of late. Well, obviously, we've had the arrival hall. And the baggage delivery has been pretty good. I'm just a bit hesitant 'cause Christine flew in, well, I call the airline yesterday, and arrived without her bag. Had to wear her partner's trousers to the board meeting yesterday, but fortunately, the bag arrived last night. No, it's running pretty well at the moment. But, you know, I don't think people realize the disruption to the system when someone arrives without their bag. You've got to store the bag, you've got to then tag it to the customers, and some customers never claim their bags, they just claim on insurance and gone.
You can't get rid of the bag, and when you actually find it and find where the customer is, you've then gotta get it through the border agencies. So, you know, a lost bag is a real hassle. But I've got to credit to the airlines, they're doing pretty well now. And, you know, at our end, we, the baggage handlers who, you know, new staff and everything, they're, they're lifting their game all the time. I am delighted to say we're investing in a major new baggage system at Auckland Airport, and really a generational change, which will provide much more sort of utility to all this. So that, that'll be a step change as part of the upgrade.
And Patrick, if I could just add, we monitor things like mishandled baggage with airlines, and certainly last summer, Patrick made reference earlier, there was a lot of mishandled bags coming down the line out of the US with various storms, et cetera. Basically, the numbers are back to 2019 levels. So give or take, mishandling baggage rates have largely returned to kind of historic norms, which is a good thing.
Part of the problem worldwide is the baggage handlers had to de-staff during COVID, of course, and then they have to recruit a whole lot more people, so you lose a huge amount of sort of knowledge and things. So everybody's building it up again. It's hard work, but they're doing well. Yeah, so, except with Christine's bag.
You've spoken about the baggage. How about the increase of customers having to wait at the airport, including overnight?
I don't think we've had many overnights, have we?
No, I mean, you, you always have the exceptions, but generally, if airlines are very good, if they know the forecast is for bad weather, they tend to make the call in the morning, so before customers actually come to the airport, and, and that tends to be the standard operating procedure. So occasionally, customers get caught up, but I haven't seen, Chloe, just looking at you, I'm not, I'm not aware of us having any uptick in the frequency.
We have, you know, we always, with the floods, we had up to 5,000 one night, no bags, no bedding, no bed, no food. And we did have. And it lands on us, to be blunt. And we did have ways of responding to that, but we have totally revisited them and got resources, etc. So if we have some calamity happen, we are much better served to keep them fed and warm, even if there's no hotels in Auckland. If we have to do it at the main terminal, we'll do the best we can. So we have invested heavily in that. Good question. Any more?
There are no further online questions.
There's one down the middle there and one over there. So we'll take those two. I don't want to stand between you and some warm food out the back there.
Thanks. So Michael Schroth, shareholder. Just as regards to the experience coming in and picking up your bags, I've had that recently, and I had one very good experience just in the last couple of days, and going back about a month, coming back at night, this time it was an absolute zoo.
Yeah.
So why is it so uneven?
I mean, it's they can handle, but the, the border agencies have to resource against the various peaks, and we have it every day and have people available. And the, probably the initial thing that causes the problem is off-time running of aircraft. So, you know, I've come in at 1:00 A.M., and all the Australian flights have had troubles in Sydney, so they all arrive late at 1:00 in the morning, at the same time as all the flights from the Pacific, which take quite a bit of handle. So basically, the peaks that they plan for, you know, they've got all these people on, on, on duty, ready to go, and there's nobody there, and suddenly, you know, two or three airlines are half an hour late, and they can't just switch it overnight.
But Chloe, if you just put your hand up, there's the expert, quite happy. And any feedback you get, I mean, we're always gonna get a little bit of that. Our messaging wasn't great either. We. So it is huge work going on on that. But you gotta everybody thinks we'll just put some more people. That's not always the answer. You've got to remember, the airport's open for sort of 23 hours a day and more, and one of the peaks is 1:00 A.M., you know.
I'm sure Chloe will be more than happy to chat you through the detail of the initiatives, but that timeframe you described, the difference of a month ago to last week or recently, is it was about three weeks ago that we commenced the fast lane trials that we're doing. They've been very successful, which would represent the experience you had recently. And we're now in the throes of bedding that in. So our expectation is the nightmare that you referred to a month ago, that we have taken steps to address that, and Chloe and the team are working very hard with airlines and border agencies, that we bed that in so that you don't. Our absolute focus is that you don't have that repeat experience from a month ago.
One last question. Was it still there, over there? And we'll call that it, if everybody's happy with that.
Yeah. That previous man stole my thunder to some degree, but I recently flew in, 6 or 8 weeks ago, we'll say, you know. Left Sydney about five-ish, I think. Something like that. Okay, so I suppose we're in Auckland, what, 7 o'clock or whatever time?
Uh-
Auckland Airport.
You lose three hours-
Yeah, okay.
So 5:00 flight arrives just 11:00, 11:30. Yeah.
Well, I gotta tell you, Auckland Airport was an absolute shambles.
Yeah. No, we.
Elderly people should not be put in a situation of wandering down Auckland Airport, looking for someone to help them. It's as simple as that.
We agree.
No beating about the bush. It was disgusting. Why wasn't there? Why didn't the airport have an information center, a brightly lit information center, where people could go and ask? There was no one.
Uh, look.
These three queues of people stretching out the door, out the back. It was incredible. It was quite incredible, you know, and, and I've been to all sorts of airports, but Auckland, that was disgusting. It was absolutely disgusting.
Yeah, I know.
We weren't late. We weren't late by any means.
It's not you that's late, that's trouble. It's the two planes before you that were meant to be there at 9:00, and they, so look, we get it. We, we wear it. Huge effort, and Chloe, again, is happy to talk to you. You know, I mean, we absolutely feel your pain, and apologies for that. Okay, if there are no more questions, I'll just, in closing, like to thank you all for your participation at this year's meeting and for your ongoing support for the airport. And those here at the venue, please join the directors and then management, obviously, Chloe is gonna be busy, and the auditors for refreshments. So I declare the meeting closed.