Morning, everybody. I am Julia Hoare. I am Chair of Auckland Airport, and it is my really big pleasure to welcome you here today. Thank you for joining us at today's 2026 annual meeting, whether or not you are here in the room here or whether you are taking part in the live stream. 60 years ago, Auckland Airport opened its doors and changed the way that New Zealand connects to the world. As we mark this milestone, it is a real privilege to welcome you. With us today are my fellow directors, and I will ask them to put their hands up. I have Mark Binns, Tania Simpson, Dean Hamilton, Liz Savage, Mark Cairns, and Grant Devonport, along with Sean Donohue here, who has been nominated by the board and is up for his first election here today. Sean will address the meeting prior to the vote today.
I will also address you on my re-election as a director today, and also, by extension, my role as Chair for up to the next three years. Our Chief Executive, Carrie Hurihanganui, who is here, will also address the meeting today. With her, we have our CFO, Stewart Reynolds, who is down here somewhere. There? Oh, there. Sorry, Stewart. Other members of the leadership team who are here below, as well as our auditors, so thank you for joining us. As we have a quorum of shareholders, I will declare today's meeting open. First, some housekeeping and some important points on how the meeting is going to run today.
The bathrooms are located over in the foyer through the area that you entered, and if you experience an emergency, please follow the Eden Park staff and exit by the stairs and proceed through to the ground level to the car park assembly point on Walters Road. Time is allocated later in the meeting for questions, so unless you have specific questions in relation to the resolutions, we ask that you hold your questions today to the time at the end that is allocated. For those that are up for re-election or election today, you will be able to ask your questions at the time of the vote. All of the resolutions will be decided by poll, and the polls are administered by our share registry in the usual way. We will announce the results of the polls via the stock exchanges today after the close of today's meeting.
The meeting order was released on September 15th, 2026 and was sent to shareholders and also released to the auditors. The company has also been posted on our website. The financial statements for the year ended June 30, 2026 and the audit report are included in our annual report, which is available online. Representatives of Deloitte, our auditors, are also here to answer any questions you may have in relation to audit queries. After my presentation, Carrie is going to give a review of the year, and then we will then move on to the motions, followed by the Q&A. As is our custom, I will start with a snapshot of our FY 2026 financial results. Overall, Auckland Airport delivered steady performance amid global headwinds, backed by strong delivery on infrastructure.
The second half of the year brought significant disruption to global aviation, with the Middle Eastern conflict driving sharp rises in jet fuel costs. This prompted airlines to trim capacity across their networks, including at Auckland Airport. Despite this, travel demand to New Zealand has remained resilient. While we have some catching up to do, forward scheduling is pointing to a really strong summer ahead. Running through the results now, our total passenger numbers increased to 19.04 million, which was up 1.6% on the previous year. Auckland Airport's revenue was up 3% to $ 1,036 million. Operating EBITDAFI was $ 724 million, up 3% year-over-year. Reported profit after tax, including revaluations, decreased to $ 335 million. Of note there, we booked a much smaller $35.8 million net revaluation gain compared to the $ 127.5 million net revaluation gain in the previous year.
The net underlying profit was trimmed by half a percent to $ 309 million. Auckland paid a final dividend of $ 0.0675 per share on the 2nd of October, and total dividends for FY 2026 were $ 224.9 million, which equates to a payout of 72.8% of underlying net profit after tax. Auckland Airport saw strong momentum in key international and domestic markets early in FY 2026, thanks to New Zealand's continuing appeal as a destination and strength of outbound travel. Overall, we had 25 airlines flying between Auckland and 43 international destinations across the year, with airlines continuing to see strong demand for travel to and from Auckland. We saw a 4% uplift in Trans-Tasman capacity, powered by both growth from Air New Zealand, who added 132,000 seats, and Jetstar adding 82,000 seats.
The United States mostly held its ground in the face of global turbulence, with a slight decline in capacity of 3%. We are also seeing growing interest in Auckland Airport as a connection point between Asia, New Zealand, and South America. Government changes to visa settings and a 2% gain in airline capacity saw Chinese visitation uptick strongly by about 11% year-over-year. This also included the launch of the Shanghai-Auckland-Buenos Aires service by China Eastern, which commenced in December 2025. This network connectivity is named the Southern Link, and it is something that we have been working incredibly hard at behind the scenes for a number of years. It effectively positions Auckland Airport as a strategic transit point for broader global connectivity, and we are really pleased with the demand we have seen on the route to date.
Argentine visitors arrivals rose 35% between December 2025 and March 2026, while air cargo export value was up 127% year-over-year for the period December 2025 to April 2026. China Eastern will double this service to four flights per week from December this year. Earlier this month, we also welcomed the announcement by Singapore Airlines that they will extend the use of the world's largest passenger aircraft, the Airbus A380, beyond the summer peak. This brings an extra 90,000 seats to Auckland from April to the end of October. Looking ahead to the summer peak, New Zealand continues to attract visitors drawn by our summer landscapes, vibrant cities and regions, culture, food, and wine, while actually more Kiwis also pack their bags for their overseas trips.
Auckland Airport will be supporting close to 6 million international seats between November 2026 and March 2027, with international airline capacity growing by 5% compared with last summer. Key markets showing capacity growth include China, Australia, Canada, South Pacific, and the Middle East, alongside new routes launched by Air Niugini from Port Moresby, Starlux from Taipei, and that comes through Sydney to Auckland, and Air New Zealand to Western Sydney. China is a real standout. China Southern Airlines has increased its Guangzhou services by 21% compared with last summer, operating up to a record of 18 flights per week, while Air China has increased its capacity from Beijing by 46%, which is including double daily services during the Chinese New Year period.
Air New Zealand is also increasing its services to Singapore from seven to 11 flights per week, lifting capacity by about 45%, or 47,000 seats compared with last summer. These capacity increases are good, great news actually, for both Auckland and New Zealand as a whole. They strengthen New Zealand's connections with the world and are expected to support close to $5.7 billion of international visitor spend, benefitting urban and regional economies right across the country. This continued resilience in travel demand reinforces the case for long-term infrastructure development, alongside sharpening focus on operational performance. We are now midway through the most significant aviation infrastructure program that New Zealand has had in its history, one designed to increase capacity and build resilience. It is generational infrastructure that will serve New Zealanders, also serve businesses, and all our visitors for decades to come.
Our integrated terminal program is over 50% complete now, and construction remains on the critical path. The terminal must be completed before the essential runway safety upgrades can begin at the end of the decade. Our program is already delivering value for customers and the experience will keep on improving as each new stage comes into service. The investments we are making are not just increasing capacity and resilience at Auckland Airport, it actually helps power New Zealand. We asked EY to remeasure Auckland Airport's economic impact to align with our updated master plan, which we released in June this year. They found that 25,000 jobs are supported by our operations. We are the third largest port by value in New Zealand, and we also support $31.2 billion per annum in tourism activity, international tourism activity that is, alongside $6.7 billion in domestic tourism activity.
Each time an international aircraft lands here, it generates $1.42 million in value for New Zealand. These wider benefits for New Zealand Inc. underline the importance of maintaining a stable regulatory playing field, which has been our area of focus over the past year. The Commerce Commission proposal to introduce a new approach in its draft decision on cost of capital input methodologies, it is the third review we have had in three years.
It really risks shifting the goalposts for investors who are already invested and have already invested their capital with us. It affects the attractiveness of New Zealand as an investment destination, which is the point we have been respectfully submitting on while we await their final decision. We are now underway with consulting with substantial customers on our Price Setting Event 5, which will set our aeronautical pricing for the period from 1 July 2027 to 30 June 2032.
Airline charges cover both the costs of operating and maintaining the aeronautical assets, as well as contributing to the new airport infrastructure. These are the assets that airlines use to operate their business, the runways, the terminals, the baggage systems, power, stormwater, and rescue fire services. Auckland Airport's current domestic charges are some of the lowest in Australia and New Zealand. Between 2023 and 2027, Auckland's domestic charges have increased on average $1.26 a year and now sit at $13 per person. For a domestic jet traveler, the airport charge is about the same price as a coffee and a muffin, and certainly less than the cost of checking an extra bag onto an aircraft. It's important to note that the scale of our investment is consistent with major comparable Australian airports and what they're doing there.
Melbourne, Brisbane, and Sydney are all investing at least $5 billion in Australia over the next decade. Auckland Airport isn't an outlier in terms of our infrastructure investment. Our infrastructure program has been benchmarked against comparable projects and is designed to deliver long-term value for airlines, passengers, and New Zealand. Through the pricing consultation process, we'll seek to strike the right balance between maintaining competitiveness with our other airports in our region, also supporting critical infrastructure that's needed, and recognizing that the capital provided by investors who fund it is also critical. There's no doubt airlines and the whole aviation industry are currently impacted quite significantly by elevated fuel prices. As always, we need to look through the short-term disruption to ensure the airport remains resilient for the long term.
We remain very optimistic about the future and are confident that people have a strong desire to travel to New Zealand and that aviation will grow. Over the last 18 months, we've spent significant time considering the skills and attributes and composition we require for Auckland Airport's future, and we're also mindful that we actually have a number of directors that would be retiring at next year's October 2027 ASM. As you'll be aware, Christine Spring stood down from the board at last year's ASM, and we announced at that time that we were in the process of recruiting a new director to replace Christine. I'm delighted to say that that new director is Sean Donohue, who joined our board on the 1st of February this year. He sits on the Infrastructure Development Committee and the Safety, Sustainability and Operational Risk Committee.
Later in the meeting, you'll be invited to vote on a motion that Sean be elected as a director of our company. His full biography was contained in the notice of meeting, but just a little potted piece about Sean. He was the Chief Executive of Dallas Fort Worth International Airport for 10 years until he resigned in 2025, and he's currently a non-executive director of Atmos Energy Corporation and Willow Incorporated. He's held senior roles at Virgin Australia and United Airlines, as well as international aviation and tourism bodies. Sean's depth of experience in global aviation strategy and operations is highly aligned to the direction and aspirations that we want to go at Auckland Airport. He brings his strong global connections through his membership of various global travel and tourism councils and committees, including chairperson roles.
You won't be surprised to realize that Sean has hit the ground running when he joined us, and he has been fabulous to have around our table. The board unanimously recommends shareholders vote in favor of Sean's election. As you will also be aware, after 9 years of service, I am required to stand for re-election again, and I need to retire in the normal process. But having been eligible, I have offered myself for re-election. As I mentioned before, we have been looking at the board composition and timing and making sure that we have the right mix of new and seasoned directors. We did a huge amount of work around our succession planning. The board supported me to stand for a further term so that we maintain that continuity.
As it has been indicated in the notice of meeting, this is my last term, so I will not be standing up again in the future. When it comes to my turn for my re-election piece, I am going to ask my fellow director, Tania Simpson, to speak to that specific resolution. Today, I would also really like to recognize Mark Binns, who stands down from the board after almost nine years. Mark is a fantastic director. He has got deep governance experience and construction sector experience, and he has been a significant contributor to Auckland Airport. His experience, his expertise, and his contribution around the table, and his input into our guidance into our infrastructure development program has been absolutely invaluable. Mark, we are really going to miss you. He has been a fantastic director to have and work with.
We are currently in the process of recruiting a new director to replace Mark, a bit like we were in the same position last year with Sean, and we look forward to being able to introduce that new director to you at next year's annual meeting, and we will seek your support with their appointment at that time. We are now into year four of our Building a Better Future strategy. The results are evident across the precinct, as well as increasingly embedded in the systems that sit behind the scenes and serve the evolving needs of travelers, airlines, airport stakeholders, and the wider community. With the strategy now on track and now extended to 2030, we have got a clear line of sight on what is required and the experience and confidence to deliver it.
In FY 2026, the priority has been the capital program, delivered safely, on time, on budget, and to the standard that this country deserves. Alongside this focus, we remain absolutely firmly laser-driven focused on driving commercial outcomes, operational efficiency, and innovation right the way across the business, and maintaining, at the same time, a disciplined cost control.
We are optimistic about the future as Auckland Airport looks ahead to the balance of FY 2027. As I outlined earlier, there is a strong underlying demand for air travel to New Zealand for the upcoming summer peak travel period and ongoing momentum in our commercial business. However, challenges do still really remain on the domestic front. I would like to take this opportunity to thank Carrie and her team for another very strong year of great progress, and also to my fellow directors. I am very blessed to have such a great group of people around our table.
I would now like to invite Carrie to take us through some of the operational detail on delivering on the pillars of our strategy. Thank you, Carrie. Thank you.
Well, thank you, Julia, [Non-English content] . It's great to see all of you here today at Eden Park, and also welcome to those of you that are online with us today. Holding our meeting at Eden Park is a useful reminder that success doesn't come from a single shot of glory. It's built steadily through preparation, teamwork, and persistence. I think that's a pretty good description of what Auckland Airport has been doing for the past year as we navigate short-term disruption to build the infrastructure for the future. After several years of planning and preparatory works, we are well and truly into the thick of the build program. We know that there will be disruption ahead, and we're focused on managing it well for travelers, for airport partners, and for investors.
As Julia mentioned, we've made strong progress on our transformation program, and this includes advancing the new integrated domestic jet terminal, along with delivering significant airfield upgrades and improvements to transport infrastructure. During FY 2026, we commissioned a total of $1 billion of assets, including our international airfield expansion and significant upgrades to our stormwater and air conditioning systems. We are in the peak investment phase of our development program. The first phase of international check-in upgrades is close to completion, and the first two stages of our international airside retail precinct redevelopment are also complete. As we advance construction, our focus is increasingly shifting from building the new infrastructure to bringing it into operational use. Our team is laser-focused on improvements to deliver a better experience for our customers, and technology innovation and efficiency improvements will continue to deliver step change.
Despite the most intensive stage of the build still being in progress, the data shows that our work with airport partners is delivering shorter journey times with greater consistency. International arrivals have seen the biggest improvement. Since Financial Year 2023, median processing times have fallen by 47%. Over the past year alone, they're down 2% for international arrivals and 7% for transits. We've also seen strong gains in departures as well. Median processing times there are down 16% for international departures and 7% for domestic departures year-on-year. If we look back to FY 2023, that number is 27% overall. These changes are reflected also in the continued improvement we're seeing in our customer satisfaction scores, with an overall 4.4 out of five score on our voice-of-the-customer measures across Financial Year 2026. That's with 20,000 responses gathered through this ongoing monitoring tool.
In terms of a global benchmark, across the year, we achieved a score with ASQ, or Airport Service Quality, of 4.19 out of 5 for passenger satisfaction. A few things can frustrate operations and spoil the customer experience like digital lag. We have also made a substantial digital network upgrade in the past year to support with the increasing volume that we are seeing of devices, systems, and data across the precinct. This includes support for our check-in transformation. Over the next three years, our check-in hall will transform into a 13,000 sq m departures area that is modern, digital, and intuitive. New self-service kiosks and automated bag drops will be future-proofed with biometric capability and will replace those traditional counters you might be used to, freeing up space, easing queues, and improving flow.
We are soon to fully open a 520 sq m flagship check-in area called Zone C, and this will give travelers an early look at what is ahead. Smarter technology, less time spent queuing, which I think everybody loves, and a smoother journey through check-in. Gone are the 1990s era of airline desks in Zone C, now replaced by 28 modern self-service kiosks and 15 automated bag drops in a completely redesigned space. The technology means the area can be used by different airlines rather than set aside for just one carrier. That gives airlines greater flexibility as flight schedules and traveler demands can change across the course of a day. For anyone flying, it means more freedom to move through at your own pace.
Families, larger groups, and people who do not travel often will have more time and space to get organized without feeling rushed, while frequent flyers will, excuse the pun, fly through. We want it to feel easy and relaxed with help always close at hand for anyone who might need it. By the end of the decade, people traveling on domestic jet services will check in alongside international travelers with shared check-in facilities supporting both in the new integrated terminal. All of this means that there will be some disruption in the months ahead. As construction continues, travelers may find that check-in counters, walkways, and facilities are in new places. In response to that, we have installed extra signage, more flight information screens, and we have positioned more staff in key areas to guide people through the process.
We certainly appreciate travelers' patience as the terminal changes around them, and we are confident the result will be well worth it when the integrated terminal is complete in 2029. More than 50,000 travelers a day, that is up to 30,000 international and 20,000 domestic, currently move through Auckland Airport. We continue to work closely with transport agencies to plan for the road and public transport improvements needed beyond the airport boundary, but we are also playing our part, ensuring the airport's 24 km of roading network keeps pace with growth. In three years, we have added and extended transit lanes, we have upgraded forecourts, expanded park and ride facilities, and improved way finding alongside smarter traffic management.
This includes a new dynamic lane system at the Pūkaki Bridge southeastern entrance to effectively double the peak direction capacity for customers on one of our busiest roads, and that is to come in the new year. Since the full opening of the transport hub in late 2024, parking has also become faster and more intuitive, not just at the transport hub itself, but across the precinct with license plate recognition and mobile and online payment now available across all five international car parks and park and ride south. It is fair to say that Auckland has had a tough few years between the pandemic, a muted economy, and disruption from major infrastructure projects across the wider city.
It is exciting to see Tāmaki Makaurau now turning a corner following a few years of hard yards, and you can see that in the wholesale and ongoing redevelopment of the Auckland waterfront, along with port and cruise infrastructure, renewal of the public transport fleet with increasing electrification of buses, trains, and ferries, the opening of the New Zealand International Convention Center in February this year, alongside available hotel rooms increasing 25% since 2019. Last month, the City Rail Link opened, giving Aucklanders faster and more reliable ways to get around. In the context of this citywide makeover, Auckland Airport's once in a generation transformation will further contribute to a connected urban network and set us up for success as a primary international gateway for tourism, trade, and commerce.
I am heartened that the recently signed Auckland City Deal identifies Auckland Airport as one of the strategic growth areas for our city. It highlights priority transport projects that have the potential to unlock significant economic benefit for both Auckland and New Zealand. We are preparing for the future where the number of travelers through Auckland Airport is expected to almost double to 38 million by the 2040s, so easy, reliable access to the airport is a key priority. We strongly support better public transport links, which alongside the investments we are making now, will help us welcome this continuing growth both as a city and a country. In a sometimes troubled world, New Zealand is certainly holding its own as an aspirational destination and a place of beauty and hospitality. Not that I am biased or anything.
But we see tourism continuing to drive passenger numbers through Auckland Airport and bring economic benefits to the wider region. For example, between July 2025 and March 2026, Australians spent 11% more in the North Island year-on-year, North Americans 48% more, and Chinese 31% more. The visa waiver trial that the government rolled out in November 2025 for those Chinese visitors already holding certain Australian visas has successfully unlocked a new segment of Chinese visitors entering New Zealand, and these incremental visitors are ones that New Zealand would not have otherwise had. The benefits of those visitors are also positively impacting the regions. For example, Waikato is emerging as a genuine new draw card. Tourists heading to Hobbiton have seen a quadrupling of Matamata's Chinese visitor share, and visitors to Hamilton are staying twice as long.
All of this reflects the hard work of promoters like Kiwi North, a regional grouping of 15 tourism organizations, including Auckland Airport. We work together to put the North Island on the radar of international visitors and give them a compelling reason to come. This kind of active, targeted work gives us agency as a region and a country, even when there is the potential global disruption that we're seeing now, such as the conflict in the Middle East. I am pleased to say customers are still traveling, and confidence across the sector is holding. Overall, as Julia Hoare mentioned, we are optimistic about the future of travel. The aviation sector and travelers alike have been tested, most certainly in recent years, and both have come through more resilient. People's desire to travel remains as strong as ever.
Notwithstanding that, we continue to take a cautious approach in our near-term forecasting with the current fuel price volatility and geopolitical instability expected to keep flight and passenger volumes relatively flat in FY 2027. Trading performance for the first quarter of the year has been positive. While we remain confident about the strength of inbound passenger demand, we also see continued challenges in the domestic aviation market. As such, we remain and maintain the underlying profit guidance range for FY 2027 of $ 290 million-$ 330 million. As I have emphasized today, we certainly continue to make strong progress in our infrastructure program. Our FY 2027 guidance for capital investment remains at $ 1 billion-$ 1.3 billion for the year. As always, there is the possibility of unforeseen changes as a result of global market conditions or other circumstances. Looking ahead, the big picture is important.
We see an underlying trend of airline capacity returning, including Air New Zealand getting its fleet back up to full strength. As Julia Hoare mentioned, airline slot filings for northern winter 2027 point to a positive outlook. Tourism settings remain supportive. Hotels and event infrastructure across Auckland and the country are in much better shape, and our investment in Auckland Airport is already delivering enhancements for travelers. We are building New Zealand's gateway to the world, and I am looking forward to sharing that journey with all of you. [Non-English content] . Thank you.
Look, thanks, Carrie. Sorry for my delays up here. I have a newfound appreciation and respect for those with mobility issues, but I am lucky that mine is only for six weeks. Yes, I am a bit slow up on the stage. Look, thank you, Carrie. Now for the resolutions we will turn to. You may ask questions on the matters that are being put to shareholders, in person or through the virtual meeting website. I will ask for any questions for each director standing for re-election or election to be asked immediately after either Sean Donohue or I have spoken. Can I also ask that shareholders please give their name when speaking to the resolutions and confirm if you are either a shareholder or a proxyholder?
We've got roving microphones in the room, so can you please make sure that you wait till you get the microphone because those online can't hear the questions unless it goes into the mic. We'll be very careful about that. Shareholders participating in the meeting online will have the ability also to ask questions through the virtual meeting platform. A member of our legal team will be reading out those questions to us here on stage at the appropriate time of the meeting. Everyone attending the meeting can also hear those questions. If you do require assistance, those of you that are online, please refer to your virtual meeting guide or call the specified helpline number. We also may amalgamate questions of a similar nature because that makes the flow of the meeting easier.
But if at the end of the meeting you don't feel like we've addressed your question or you'd like us to address it further, you can either catch us here, myself and the board and management team will all be here after the meeting. Or for those of you that are online, please do make contact to us via our investor page on our website. As mentioned earlier, the voting on all resolutions will be conducted by way of a poll. If you're voting as a shareholder, proxyholder, or corporate representative, please use the voting paper handed to you at registration to the meeting. Shareholders who are joining online, you'll be able to use the electronic system and cast your vote using electronic voting, and you will have received that when your registration was validated.
To vote, you're going to need to click the Get Voting Card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate, and then please mark your voting card the way you wish, either clicking For, Against, or Abstain on the voting card. Once you've made your selection, please, those online, press the Submit Vote on the bottom of the card to lodge your vote. As I said, please refer to the virtual meeting online guide or portal and the helpline. You should have it on your forms, but if you don't, it's 0800 200 220. If you require assistance, that is the number. Proxies have been received from 739 shareholders for about 1.3 billion shares, which represents approximately 77% of the shares on issue. Shareholders, the company's constitution allows for a maximum of eight directors.
As I mentioned earlier, we have two directors offering themselves for election or re-election. We'll ask the directors to address the meeting first, and then we'll take any questions, and then we'll then request shareholders to cast the votes for each of the resolutions. As I mentioned before, there's going to be an opportunity to ask general questions after the formal resolutions. Let me turn now to ordinary resolution number one. I've already provided a fairly detailed background, in relation to Sean Donohue when I spoke earlier. Sean Donohue joined Auckland Airport as a director of the company in February earlier this year. The board unanimously recommends that shareholders vote in favor of Sean's election. He's considered by the board to be an independent, non-executive director. I'd now like to ask Sean to address the meeting.
[Non-English content] Good morning, everybody. Chair, fellow directors, Carrie, and the airport team, and shareholders, thank you for the opportunity to speak today. It is indeed a privilege to have joined the Board of Auckland Airport earlier this year, and I am pleased to be standing for election today. My entire career has been spent in aviation, an industry that I continue to find enormously rewarding because of the role it plays in connecting people, communities, and economies. Most recently, as Julia Hoare mentioned, I spent a decade leading the team as Chief Executive of Dallas Fort Worth International Airport in the U.S., the fourth-largest airport in the world. As Julia Hoare mentioned, before that, I spent 30 years in the airline industry, many of those with United Airlines, but I also had the opportunity to live in Australia, when I worked for Virgin Australia.
During my time at DFW, the airport delivered over $7 billion in infrastructure improvements, strengthened operational resiliency, and supported our goal of being carbon net zero by 2030. Airport infrastructure projects are complex and challenging given the necessity of delivering these projects in active airport operation environment. I have to say, in the time I have been at Auckland Airport on the board, one of the things that has most impressed me with Carrie and her team is the incredible focus they have on creating a safe working environment for the thousands of people that work at Auckland Airport. It has been very, very impressive to see that. Major transformation programs also require a long-term view and disciplined execution.
They also need to deliver for the people who use the airport every day, the millions of customers that travel through Auckland Airport, the over two dozen airline partners, and the hundreds and hundreds of business partners. Collectively, I believe at Auckland Airport, and I have seen this at airports all over the world, it helps make the airport an incredible economic engine and asset for the country and for the city and the region it supports. I hope the experience and perspective I have gained over many years in global aviation can make a useful contribution as Auckland Airport continues that work. I am also very conscious of those who a director serve. Auckland Airport shareholders range from large institutions to thousands of individual New Zealanders, many of whom have backed this company for decades.
Each of you has placed your trust in this board to oversee your investment wisely and to make decisions that build lasting value. Serving you in that role is a responsibility I take seriously. It would be a privilege to continue as a director, and I respectfully seek your support today. Thank you.
Thanks very much. Thanks, Sean. I now move that Sean be elected as a Director of the company. First, are there any questions that we have from the floor? We have someone here. Could you please wait for the mic, and then, if you could state your name, and then ask your question. Thank you.
Corie van Camp, shareholder. Sean, where are you domiciled?
Where do I live?
Where?
I live in Massachusetts, outside of Boston, Massachusetts.
Right. So that's quite a long way to come down for board meetings.
Yes, it is.
That's not a problem?
It's not a problem for me. Again, being in aviation for 40 years, I have traveled extensively, and the travel does not bother me. I've been
So could I
able, and my commitment is to make every board meeting in person in Auckland.
Could I ask, do you use Air New Zealand?
I have been flying Qantas because they have the most service from Auckland to JFK, which is the airport I fly out of.
Right. Thank you.
Are there other questions from the floor? I can't see any. Are there any questions online, Shannon?
We have received. We have received a question from-
Yeah, we can't hear you. Could you just hold on a minute?
We have received a question from a shareholder online from Stephen Mayne. "Could new Director Sean Donohue and the Chair comment on the recruitment process that led to his appointment to the board? Was a headhunter involved? Did the full board interview any other candidates? Did Sean know any of our Directors or key management personnel before engaging with the recruitment process? Where does Sean live, and how much time each year does he expect to spend in Auckland?
Well, let me start responding to that piece. In terms of Sean's appointment, we are very, very mindful that we wanted someone with deep, deep sector experience. To find the right person with that deep sector experience meant that we needed to not just look within New Zealand, but do an international search. We did use a search firm out of Australia to assist us with that process. We had a very good list of individuals that came forward, but Sean really shone through in that process. It was an entirely independent process, and we did interview others, but Sean was our standout person in relation to the role.
In terms of knowing people on the board, I think he crossed over for a short while with Liz Savage when she was also at Virgin Australia, so she was able to, when Sean's name came into the mix from the headhunter, confirm that we had a pretty good person that was going to be in the mix for us to consider. As I said when I was commenting about Sean earlier, he's got that in spades. The amount that he's added to our board during that period has been fantastic. We've already answered the question in relation to Sean. He doesn't live in New Zealand, but he has traveled down to all of our meetings. Travel has not been an issue for him and is an absolutely fabulous contributor.
I think for the benefit of Auckland Airport and our longer-term piece, not only in terms of the large infrastructure play, but also understanding all the dynamics of the airport itself and the various interrelated factors we need to think about. Also the work that Sean, he didn't really talk about it, but whilst he was at Dallas Fort Worth, did a huge amount in terms of bringing the relationship between its key airline customer and the airport together much more, and we think that's a really important thing for us here in Auckland as well. Adds a lot of value. Yes, very independent and we're delighted with the process.
There are no further questions online.
Thank you, Shannon. Well, I shall stand up for this. No, I won't. I'll pass to Tania in a minute. I'll now move that Sean be elected as a director of the company. There's no more questions, so what I will do is will the shareholders vote at the end, Shannon? Once the resolutions are all done?
At the end of the meeting.
Perfect. Okay. Thank you. Well, I'll ask then, Tania, if you wouldn't mind stepping up for my re-election. Thank you.
Thank you, Julia. We now turn to the ordinary resolution to the re-election of Julia Hoare. Julia was appointed to the company as a Director at our 2017 meeting, and she has been in the Chair role for the past two years. Julia is considered to be an independent, Non-Executive Director with the skills, experience, and understanding of Auckland Airport's business to be able to execute the largest infrastructure program in its history. The board considers that the continuity of governance oversight during this significant period of delivery to be in the best interests of the company and its shareholders. If Julia is re-elected, the board intends that she will remain the Chair until the completion of a further three year term.
A detailed biography in the notice of meeting notes that Julia has been a Director of Auckland Airport since 2017, bringing extensive multinational chartered accounting experience and expertise that spans finance, commercial, tax, regulatory, sustainability, and climate change. Her other directorships include being a Chair of the Port of Tauranga and a Director of Meridian Energy. 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, and we now invite Julia to address the meeting.
Thanks very much, Tania, and I would like to thank you all for your ongoing support of both Auckland Airport and also myself over my time here on the board. It has been an absolute privilege to serve you as a Director and more recently as Chair of your company. As I reflect on my time on the board of Auckland Airport, I am reminded of the incredible resilience, adaptability, foresight that Auckland Airport and the team have demonstrated in navigating numerous challenges over the years. We have weathered the storms of a global pandemic and geopolitical uncertainty, and we have adapted as patterns of travel and trade have shifted over time. Through all of it, we have never lost sight of building the long-term resilient infrastructure that will open us up for new opportunities for trade, tourism, and growth right across New Zealand.
I am proud to be part of a strong group of governors and management who have guided the airport through these challenging times while pursuing our strategy of Building a Better Future, which means meeting the evolving needs of travelers, airlines, stakeholders, investors, and the wider community. If you have been through the airport lately, you will have seen the strategy taking shape before you. As Carrie mentioned, we are now halfway through the terminal program, and the build is now very, very visible when you go out to the airport. We want to thank you also for your patience with all the changes that are taking place at the airport at this time. We are working hard to keep you travel and keep you moving with as little disruption as possible.
I am also actually really proud of the laser focus that we have had on our customers, where we aim to make the airport experience a really positive one for all, and none of this happens alone. It is through the partnership and close collaboration with our airport partners that we have been able to deliver a more enjoyable airport experience for our customers.
I have offered myself for re-election in order to provide continuity through this critical phase of delivery of our strategy. I understand the complexities and the opportunities we have ahead. However, as was made clear in the notice of meeting, this will be my last term on the board. I welcome your continued support as a Director and Chair of Auckland Airport as we deliver our next phase of growth, innovation, and opportunity. Again, I truly thank you for your support, and I look forward to continuing this journey with you.
Thank you so much. [Non-English content] .
Is this working? Yes. I now move that Julia Hoare be re-elected as a Director of the company. Are there any questions on the matter, firstly, from the floor? One, two.
Could we see the proxy for and against votes up on the screen, please?
Shannon, could you comment on that?
The shareholder poll will be published on the NZX after the meeting, so those proxy results will be available then.
Is that a Shareholders' Association recommendation that we don't show? I just recall historically there was a recommendation that you don't show them at a meeting, which is why we don't. Is that the reason?
Correct. That's correct. The voting is also not finalized till the meeting is closed.
Sorry we do not have them to put up on the screen. Apologies. There was another question here.
My question is the same, showing the proxies.
Do we have an issue with showing the proxies, or?
There are no issues.
Because then the shareholders know what the. Is this on? Yeah, I am now a shareholder right from the beginning. My question was same as Corie. Why wasn't the proxies on the board?
My understanding, but I will defer to our legal team, because my understanding was that we used to, not in the last few years, but historically we used to, and there was a recommendation from the, I thought, the Shareholders' Association, that it was not to be shown until after the conclusion of the voting. I do not have any issue with it being shown. That is why we have not prepared a slide on it.
That is correct, and as the proxies are not finalized until the end of the meeting, we do not publish those results. They will be available shortly after the meeting is closed.
[inaudible]
Okay. We will definitely take that away and revisit that for next year's annual meeting. We have no concern on any of the proxies. The proxies, as far as I am aware, have been very supportive of all of the resolutions. I do not think there is any issue around the proxies. We have just not shown them as what we understood was best practice, but we have no issue. I will take that away, and Shannon can talk about that with the legal team later.
[inaudible]
We will just get the mic to you so that we can all hear.
I hold several portfolios. In all the meetings that I have, they show the proxy. At least give some indication to the shareholders what is happening.
Well, I don't have them here to give you any detail. I don't know whether Shannon has them. Shannon, do you have the? We're not trying to hide the information.
We do have proxies. However, as we've mentioned earlier, they're not finalized. We will publish them at the end of the meeting.
I'm sorry, I can't give you anything further.
Thank you. There's another question over here. If we could have the mic, please.
Thank you.
Paul Ford, shareholder. I think you will find there has been a transition away from providing proxies during the course of the meeting, and I think it is not only to do with the requirements from the Shareholders' Association, but also the NZX. You may like to check that out as well.
The last meeting I went to, there were no proxies provided during the meeting, but only afterwards.
Thank you.
Thank you. Are there any more questions from the floor? It appears not. Shannon, are there any questions from shareholders online?
There is a question from shareholder Eva Quidding. Why is Ms. Hoare not seeking re-election after the next term? Secondly, may I know where Ms. Hoare's suit jacket is bought from?
Thank you. I have served on this board now for nine years, and it has been an absolute pleasure and a total privilege to be a Director of your company and also the Chair. I have offered myself for re-election for a three year period. I just think that good governance is such that once you hit a 12 year period, some may question whether or not you are independent or not. I would love to be here forever. I love the company. I think the management team are fantastic. I sit in the good company of a fantastic board, so it is a real privilege. But I just think that you need to be governed with the best governance, and I think that that is appropriate in bringing new ideas, new people around the table. Respectfully, it has been a fabulous nine years.
I am hoping that I have your support for the next three, and after that, I will not be seeking re-election because I think I owe it to you for good governance. In terms of my jacket, it is an oldie, but a goodie. Do I give plugs for It is an Adrienne Winkelmann jacket. But I have had it for a long time now. She has closed her business. But I still pull it out of the cupboard because I love it. There we go. So, thank you, Eva.
Thank you. Are there any further questions from shareholders online, Shannon?
There are no further questions.
Thank you. I will move that resolution and pass back to Julia.
Thanks very much for that, Tania. Now turning to resolution three. Deloitte is automatically reappointed auditor this year of the company under Section 207T of the Companies Act. I move that directors be authorized to fix the fees and expenses of the auditor. Are there any questions from the floor on this matter? No, there is none. Shannon, are there any questions?
There is a question from shareholder Stephen Mayne. How many audit tenders have we run during Deloitte's uninterrupted 25+ year run as external auditor of our business? If the answer isn't zero, when was the last tender, and when are we next likely to run an audit tender?
Let me start answering that question, then I'm going to actually pass across to, where's Grant? Down that end. Grant Devonport to further fill in the rest of the detail. This is a matter that we have been considering quite deeply, and we understand the perspectives of shareholders in relation to auditor rotation. We've been incredibly well-served by Deloitte and so have absolutely no issues with them. But as we highlighted in this year's annual report, we recognize from a governance perspective, it is appropriate to have auditor rotation. We're now in the process of appointing a new auditor, and through that process, we didn't invite Deloitte to be part of that tender process because the whole point about change is to have a change in rotation of auditors. I just would like to acknowledge Deloitte. They've done a fantastic job for us.
But we are currently going through a process of changing our auditors for exactly the reasons that are being indicated here. But, Grant, would you like to make any further comment?
I think you've covered it well, Julia. Yes, we look forward to announcing that in the next year and having that in front of the annual shareholders' meeting next year.
Thank you. Shannon, any other questions?
There are no further questions.
Thank you. Okay. We will now conduct the polls in respect of the meeting, with motions which have been put to the meeting. The poll is going to be administered by our share registry, MUFG Pension & Market Services, and they are going to act as scrutineers. Could you all please complete your voting papers, either ticking for or against, or if you wish to abstain from casting a vote. Anyone that is having difficulty in the room, could you please raise your hand and assistance will be provided. The share registry staff are going to move through the room to collect your voting papers. As I mentioned earlier, those shareholders of you who are participating in the virtual meeting through the website, you should also submit your votes. The results from the polls will be announced on the NZX and ASX later today.
Now to the more general business, I invite shareholders to raise any questions they may wish to pose to us. I will start with those in the room. Questions, comments, and discussions, whether they are related to the presentations, the annual report, financial statements, or any matters of concern in relation to the governance or management of the company. I will also ask any other matters that may lawfully be considered at this meeting. Again, those shareholders who are participating online, you are able to ask questions through the virtual meeting website. Please, can you keep those questions short and clear because they are being processed at our end and then need to be relayed to us.
For those of you in the meeting venue today, as I said before, if you do not get a chance to ask your questions here or you do not feel that they have been answered fulsomely enough, the board will be here after the meeting, as will the management team, and available to answer so many of your questions. You will easily be able to Yes, I will just give the bit of the detail, then there is the first question in a minute there. You will easily be able to identify the board. The board have black badges and the management team have blue badges. I will now ask shareholders, corporate representatives, and proxy holders who wish to speak, just please, again, just wait for the microphone. State your name as appropriate and the organization to which you represent if you are representing an organization.
There are questions from the floor, so can I start here, please?
Thank you. My name is Philippa Avis, a shareholder for Air New Zealand. With regards to the Auckland Airport plan, what is the ongoing employment going to look like for New Zealanders?
Carrie, I might turn to you, actually, on that.
Well, thank you. Great question in terms of you have today and then you have the future element. Currently, there is about 25,000 employees that are in the broader Auckland Airport precinct. They do not all work for Auckland Airport, clearly, but as far as our partners, as we continue to see growth, I referred to that 38 million by the 2040s aligned with the master plan. We do expect that to continue to grow in term of the employment opportunities at the wider airport precinct. Currently, we have about 1,500 construction workers on site. That will peak at 2,500. We do anticipate that will taper off because of a one-off project piece. But certainly, the ongoing airline, ground handling, food and beverage outlets, et cetera, we expect that to continue to grow as we see passenger growth expand.
Do you have a number, like of employees?
Well, we do not in terms of that just because we do not have the wider context of the other businesses. The businesses that work on the precinct, whether it be airlines or ground handlers or retail outlets, we do not have visibility of those strategies. But the fact that passenger demand, we expect to continue to see that grow. That will demand more shuttle services, it will demand more retail, it will demand more ground handling. We do expect that 25,000 to continue to grow as we see that grow, that passenger growth, inbound growth, and cargo growth continue.
Can you talk a bit about the precinct?
Next question. With regards to your transport plan, I understand as a resident of a local area close to the airport, the light rail has been kiboshed. Is that still the place plan for the airport, that there is going to be no rail link?
Great question. The light rail, that is a local council initiative rather than an airport initiative. We have, in our master plan, protected all of the corridors. We are a huge supporter of mass rapid transit. That can take the form of light rail, bus. There is any number of elements, but we have protected the corridors into and out of the precinct and into the precinct because that will be, if we get to that 38 million passengers I was talking about, the growth of public transport corridors will be vital.
Our management team has ongoing engagement with NZTA and Auckland Transport to understand and have our input into the regional plan because obviously the airport cannot grow and people getting into it unless we have that ecosystem working. We are very active in that space, but we do support mass rapid transit, and we do have the corridors available at the point council and/or central government make a decision on that.
Thank you.
There is another question here, and then we will go to a question over here.
Hi, my name is Virginia Harwood. I am a shareholder. I recently traveled through the airport, having not had a gap, and I have to say I was very impressed. I think that to come out and get your bags almost in record time before your transport has even got around the link to pick you up was great. In the building is great, and then you step outside. Honestly, it is a trip hazard and it is ugly. I think we could do better when the first experience of going out of Departures is that ugly white billboard with nothing on it, and the fact that it is uneven ground. Just a bit of a heads-up as what it looks like, first impression. Thank you.
Thank you. I appreciate the, if we go back to borders opening, there was some challenge on the arrival process and the speed of that. The management team has worked incredibly hard to improve that, so I am pleased to hear you are experiencing that and we are seeing that consistently. Really value your feedback in regards to that outbound welcome. We do work hard in terms of thinking about the experience and way-finding. We are the gateway, so really valuable feedback. As far as the trip hazards, we do spend a lot of time on that, so we will 100% pick that up and go on up because we are moving things as the program progresses. But appreciate it.
We will absolutely have a look at that because I agree, people's first impression when they hit New Zealand through our front doors, we want them to see that as welcoming and positive. So, thank you.
Can I just add to that, too, really? Look, appreciate the positive feedback. We always like to hear the other as well. As Carrie and I both mentioned in our speeches, we are working with a brownfield site, which means that as we do our infrastructure development, we are trying to build things within a footprint of where there has been previous build. From a safety perspective, we have to put the hoardings up. For those that travel frequently, you will actually find that those hoardings are moving all the time as we are doing different work along the place.
Appreciate that until we finally open in, yeah, the end of 2029, we are going to have some bits and pieces where there will be some disruption or whatever, but your point on health and safety and trip hazards is incredibly important, and that is something that we will absolutely look into. But in terms of the hoardings, I am sorry, you have a few years to go. Sorry, there is a question over here. Could you just wait for the mic and thank you.
Yes, good morning. We are all owners of a rather capital hungry business. Everything costs millions. We have a lot in the plan I see. I wonder if I could ask, Madam Chair, through you, the CFO, to comment on capital requirements going forward. How much headroom have we got? What does the plan look like for raising debt and/or equity over the next, say, five years? Not looking for specific numbers, but just where we are in the cycle, because it must be a continuing challenge for the CFO to work on, I would imagine.
I will pass to Stewart. We have got a great CFO. Someone can hand the, oh, you have got your mic there anyway. Stewart does a great job, and also he involves the board in a lot of his deliberations as well, so we spend quite a lot of time on that. But I am very comfortable we are in good hands. But Stewart, the question was directed to you, so would you like to answer?
Yes. Thank you, Julia, and thank you for your question. It is something, as Julia mentioned, we spend a lot of time navigating both before we started the program, but also continuously as we execute on it. When you start a program that is in the many billions of dollars, it is very important to know, recognizing you cannot stop a lot of these construction projects midway through, that you have the capital to execute on that. So one of the things the management team and the board decided to do was to address the equity requirement, debt requirements to fund that program. So in late 2024, we sought support from our shareholders to essentially fund a proportion of that investment program through equity. We raised that money with the view that that was effectively going to be a one and done requirement from shareholders.
Then at the time also looked at our capital structure settings to ensure they were supportive of the funding program, given the many changes that could occur throughout the subsequent eight years of the program. That will involve effectively a combination of reinvestment of dividends from our shareholder base, retaining profits within the organization through a lower dividend payment policy. In addition to that, importantly, staying focused on the trading of the business and ensuring that we drive commercial returns and aeronautical returns from the business and capitalize on the opportunity that the business faces over the years during the construction program.
So what that means is we have gone through an exercise now over a number of years of essentially funding the growth and the transformation that you see on the precinct from a combination of debt and equity, and we have a few more years to go. But we are comfortable with the capital structure. You will see we have got a strong balance sheet, supportive shareholders, and importantly, supportive debt holders to fund some of the future debt raisings that the company will undertake over the coming years.
Are there any more questions? There is another question here. Thank you.
I am an occasional traveler, mostly to Sydney. The self-service checkouts, I avoid them at the supermarket, and I find them quite daunting when I get into the airport with my bags and hanging over my shoulder, et cetera. There will be plenty of people on hand to help put through. But when you get to the automatic sticking your bag on a you have to lift it onto a belt. So any airline goes on the same belt, and then there are some things that scans it that says which plane it is supposed to go onto. What if the bag is overweight, if you have bought an economy ticket and you have got a heavier bag? How does it distinguish between what is allowed on the different airlines?
It is the way that the system is programmed. Part of the common use or the CUSS we talk about is any bag, any airline, any automated bag drop. The system is programmed to understand when it reads the barcode, the airline, the weight allowances, and those elements. There will always also be staff on hand. While you will not have the traditional check-in desk in a one-to-one basis, there will be staff always roaming that can help should there be an issue, an exception, a question with that. But the system, the smarts in the system has the ability to understand what each airline requirements are.
It would reject. It just would not move the bag through if it was
Correct
overweight. When it comes to the cabin luggage, I think it was Air New Zealand said they were going to have a lot more stringent approach too because trying to get a laptop into an overhead cupboard, which has got someone's huge suitcase stuffed in it.
But that is not the airport part, is it? That is where you get to the gate.
That's an airline policy. What you will find, you're absolutely right, you will find that depending on the airline, their entitlements for passengers in regards to carry-on luggage or cabin luggage may vary. You will see potentially if you're traveling with Air New Zealand or Singapore Airlines or Emirates, that they can have slightly different requirements to that. You'll find it will be the airline staff or ground handlers that would manage that process. All the information is usually when you book your ticket, but you're right, sometimes they check it at the gate.
You'd actually get to the gate. When you're putting your bag in, you actually get to the gate to get on the plane before they would turn around and say, "No, that's too heavy.
Well, ideally what they do from a process perspective, and again, every airline is different, but normally when you are checking in, they have roaming staff, even with the automated bag drops and keeping an eye out. Because visually, to your point about really big bags, you can usually get a line of sight to that. Then often if it is picked up at the gate, they will check it in at the gate. They need to have a mechanism with which they can manage that as well.
Okay. Because artificial intelligence is very scary, and it's not going to cover things like that.
Yeah.
Thank you.
There is another question just at back of the room.
Hi, I am Susan Bottom, a shareholder. I know we are a bit cash-strapped, but I was wondering, thinking of the future, if you have been to Queenstown lately. I know we have a 24.99% ownership of that, but if you have been there lately, the planes are going to and from Aussie, and it is fabulous. It is booming. Okay? It is a fantastic success story. I know a lot of New Zealanders are now choosing to go trans-Tasman out of Queenstown. Just wondering if we are going to increase our shareholding or, because Queenstown Airport could do some capital, perhaps build something at Terrace, maybe not. Okay, and secondly, because I seem to have lots of visitors coming to New Zealand, reinforcing your thing, but most of them don't really want to stay in Auckland. They want to grab a rental car and leave.
I am wondering if there is any future partnerships with any hotel accommodation within the airport area where people can get off overnight, get organized, go down the strip here to the rental car companies and, quite frankly, get on the motorway out of Auckland. Thanks.
Okay, there's a lot of parts to that. I'll start, but I'll also pass to Carrie for a few additional comments. Starting with your Queenstown piece, yes, it is absolutely booming. At this point in time, we are not planning to increase our shareholding. I would also suggest that council might not want us to increase their shareholding. I think they enjoy having the ownership structure they do. Queenstown is an interesting airport, though, in that the passenger demographics are such that it is the recipient of greater inbound travelers than outbound. So it's the overseas tourists that want to come straight. A lot of Australians, for example, view Queenstown as being a long weekend holiday break or just an extended weekend holiday break. So in fact, there are more inbound than outbound passengers in Queenstown, so it is different to Auckland.
In terms of Auckland, we have three hotels that we have interest in. Obviously, the Novotel and the Pullman, which are right outside the international terminal. For those that want a more affordable option, we also have the Ibis, which is still walking distance, but there is a bus that goes through. So we certainly have plenty of options, and there are a number of hotels quite close to the airport, but outside our airport precinct. Carrie, did you want to add any comments to that?
I think you answered Queenstown beautifully. I think in terms of that, you're absolutely right. The average stay in Auckland is one point six days. Something we're acutely aware of, myself and our Chief Customer Officer, Scott Tasker, we work very closely with Tātaki Auckland Unlimited. There's work underway as part of the Auckland City Regional Deal and an Auckland narrative of what is that compelling story, because you're right, you extend that by half a day or a day, the benefit to the wider Auckland region and communities and, the earlier question about employment is certainly there. So that's something that we continue to lean into because, it used to be city of sails was certainly the one that Auckland was renowned for, and that's something that there's a lot to offer in Auckland.
Kiwi North that I referred to in my speech, the 15 North Island operators, including Auckland Airport, is also about that attraction to come arrive in Auckland, stay a few days, and then disperse to the regions. So certainly a focus area.
Are there any other questions? Another one over here.
I'm lucky shareholder. Everybody talked about the convenience of the passenger flow. I've got a different direction here. I've got two questions. Earlier, I was talking to Dean Hamilton, and he comforted me that the Mānawa Mall, you call it? Mānawa Mall? Yeah, well, that has been reduced, and the occupancy rate is 98%, so that's very comforting. I'm more interested, if you look around here, about 50% of the people here are veterans. We need the dividend now. I've taken this morning, the net return was 1.61 return. 50% of the asset of the Auckland Airport is properties. When you compare with present properties, Argosy, Kiwi Income Property, VCT, they all deliver over 5% net return. What can you do for the shareholders?
I talk on behalf of you and I urge the proxy voters to put pressure on the management to increase the dividend payment at least 1%. Just my question. The other question is, I'm confused how Mr. Sean Donohue will operate, what value will he add by operating from, where was that? Somewhere Dallas or somewhere?
Sean is present for all of our meetings, so he is physically present, sits around our table and talks with us. We are an international airport. We're a gateway to New Zealand. We have greater. I'm answering the second part of your question first, but passing through our airport every day, we have more international travelers than domestic ones. We're trying to make and assist our airline partners in making New Zealand a premium destination and a premium destination also for those international travelers. We don't wish to be myopic by only having Kiwis sitting around our table. We think that international perspective is enormous. The value that he added at Dallas Fort Worth International Airport is enormous.
The work that he did to bring the airport closer to its main airline partner in Dallas Fort Worth was significant, and we genuinely believe he is going to add an enormous amount of value, and he already has around our table. We were very keen, and we were very cognizant when we did our search for Sean that we wanted someone that had that experience that they could bring to the table. It is very hard to find a Kiwi often that has that experience because we are already dealing with Auckland Airport, which is the largest airport in New Zealand. To get that sort of talent, sometimes you have to go offshore, and we are very privileged to have that talent around our table. Going back to your first question. Sorry, I was
Yeah, the other question
Oh, the dividend
was the increase of the dividend.
Yeah.
What assurance can you give that at least you can increase another 1% by next year?
I am going to pass to Stewart in a minute to talk in more detail, but we have a fine balance in terms of what we do and can do in relation to dividends. Obviously, we need to think about the infrastructure piece at the moment and how do we fund. There was a good question here in relation to capital and debt, and how do we think about funding our infrastructure program. Infrastructure by its nature is very lumpy. You will have periods of time where, quite frankly, we have under-invested in infrastructure for too long. The old domestic terminals are disgraced, and it really needs to be done, and we have to work out ways to pay for that. You will appreciate in the media there is a lot of matters that play out where airlines do not want to be paying more to us.
We have to really strike a very good balance and have, what we think is within a reasonable return for dividends and also thinking longer term in terms of the program that we are currently underway with. Spend a lot of time talking about dividends. Very mindful on returns to shareholders and how we can maximize returns to shareholders, and spends a lot of time and focus around the board table. But Stewart, did you want to make any further comments?
Yes, thank you, Julia. Just building on what Julia said is it is a very careful evaluation of the risk the organization takes when we determine how much dividends are paid to shareholders. The current payout ratio is reflective of where we are in that investment phase. That is why when you saw the business come out of the COVID disruption where dividends were suspended, that the dividend payout ratio dropped, essentially reflecting the substantial amount of capital that the business was now deploying to invest in growth for the future. As the business effectively exits that investment phase, you can expect the board to then look at effectively its dividend policy and reassess that to what is appropriate at the time. Now, you compared in your question Auckland Airport to other businesses, particularly in the property space.
Some of those may not be in the same investment phase that we are, hence will have a different risk profile and could take a different lens on how much was paid out. I can reassure you and to Julia Hoare's comments, it is a very careful discussion that happens quite regularly throughout the year. Where is the business? What does the future spend look like? What risk profile can we take, and therefore, deliver returns to our shareholders?
Well, infrastructure with Auckland Airport is an ongoing thing. It will never stop. It will be improvement all the time. All we're saying is the shareholders, that is your first duty to look after them. We are not asking too much. We are not asking 4%, 5%. Only 1.61% net return is laughable compared to other property operators. Thank you.
Look, as I think Stewart Reynolds has answered the question from our perspective there. Thank you for your question. Are there other questions in the room?
There was one down here.
There is one over there, is it?
Michael Shroff, shareholder. I did come through the airport about a week and a half ago, and it was very quick. It was much better than it has been in the past. I have a question about the shuttle services. What are the current arrangements for shuttle companies? Are there more than one, for example? What are you planning to do, and where are the shuttles going to be leaving from in the future?
Thank you very much for the question. I will kick off with the second part of your question, and then I might ask Mark Thomson to also add in terms of some of the providers we have. In terms of when the integrated terminal is complete, we talk about, you have the eastern forecourt, which will be anew at the eastern end of the integrated terminal. That is being designed and constructed now. That will be a key part for many of those shuttles and pick-up and drop processes. That will be in 2029. Currently, you have the current drop-off in the transport hub and pick-up in the, what we call the western forecourt, which is the western side of international. Mark, in terms of providers in that forward look, do you want to add some color to that? Could we grab a microphone for Mark, please?
Mark Thomson is our Chief Commercial Officer.
Yeah, thank you. We talk about shuttles. I think public transport and any form of mass transit or group transport is extremely important. The first thing is the design of the new terminal, as Carrie said, prioritizes commercial and large capacity transport. The interterminal road, which is currently being built, prioritizes public transport and those mass transit capacity vehicles. That's extremely important to us because as the airport grows, it's extremely important that we facilitate the infrastructure to enable those businesses to be able to provide a really good service to the traveling public. Second part of it is that we invest very heavily in park and ride. We've invested in park and ride south to provide a lot of capacity. That enables people to get to a low-price product, which enables, again, shuttles to run to the terminal.
We have that in the north and in the south, and we've got capacity to expand those in further in the future. In terms of the operators, we obviously work very closely with Auckland Transport to encourage and provide capacity for public bus services. We also work with a number of independent providers as well, Ritchies Transport, SuperShuttle, and we're working with a number of other companies at the moment to find ways that we can facilitate providing that larger capacity public transport to the terminal. Very key part of what we allowed for in the infrastructure. A really important part of how we're working with both public and private carriers to provide that capacity, both when the terminal is complete, but also during the intervening period. Big focus for us.
Thanks, Mark. Are there any final questions from the floor? Otherwise, I'm going to turn to those online. Is there one more? One more over here, sorry. Thank you.
Lindsay Rowntree, shareholder, also Queenstown resident. You've got 25% ownership of Queenstown Airport. Do you have any Directors on the board of Queenstown Airport?
We don't have any Directors on the board. Well, none of our Auckland Airport Directors sit directly on the Queenstown Airport board. But one of our executive leaders does sit on the Queenstown Airport board, and that is Mary-Liz Tuck.
Yeah, I've just asked that question because with their car park, you're there for one night, $30. You're there for just over 24 hours, you pay $60, and that's price gouging to my way of thinking.
Look, that is an operational matter for Queenstown Airport, and certainly at Auckland Airport, we don't get involved in any of the operational matters. And I would suggest that Mary Tuck in her role on the board of Queenstown Airport deals with the governance and not the operational matters as well. But do feel free to find her afterwards if you'd like to continue that conversation. She's just here in the front. Look, thank you. I'm going to turn now, I don't think there's any more in the room, I'm going to turn to questions online. Shannon, would you like to read out our first question online, please?
Yes. The question is from shareholder Stephen Mayne. Thank you to Mark Binns for his nine years of service on the board. It is always helpful for investors to have access to some exit perspectives from retiring independent Directors. In his final contribution as a Director, could Mark please comment on what he regards as the best two decisions the board has made during his time as a Director, and does he have any regrets?
Thank you very much, Steven, for the acknowledgement. You've given me the chance to say a few things that I don't have to worry about getting fired for. Very hard to isolate it down to two decisions. I think this is a very competent board, and we've made a series of very good ones. I suppose there are two that do stand out, and the first relates to the advent of COVID and the speed with which this board actually acted to recognize we had a major problem. I think our revenue went down by 80% in something like two weeks, Stewart, if I remember correctly. And we had some people saying, "This is going to be a temporary phenomenon.
Give it six months, we'll be right again." This board had the experience to recognize that this was a major issue, and that we had to act quickly, and we raised equity straight away. And I think that really set the foundation for the confidence that the shareholders, and particularly institutional shareholders, had in this board, that we had a group of people on the board who were prepared to make difficult decisions very quickly to defend shareholder value. And I think that was really quite pivotal. The second best decision probably relates to the infrastructure. And those of you who've seen the cover of our annual report, it's a picture of the opening day in 1966. And my only claim to fame on this board is that I was actually the only one that was there with my father and 250,000 other Aucklanders.
And by the way, 250,000 Aucklanders at a time when Auckland's population was probably only around about 1 million people is really quite significant and just shows the importance of this asset to this town, this city, and this country. But unfortunately, that terminal was essentially the same terminal that I saw when I first became a director eight and a half years ago. It had not changed a lot. And I think if anybody wanted to be critical of the previous boards, they could say that we had sat there and sweated the asset. And to our shareholders' point over here, that's nice.
You're making lots of money in terms of dividends, but you're putting off the day of reckoning because we are an international economy, we are a competitive economy, and we have to have a gateway to New Zealand that really represents the qualities and the values that we think we have in New Zealand. And I really appreciate the opportunity of being part of this board to actually have the intestinal fortitude to actually make that decision to spend billions of dollars. Because to our shareholders' point down here, we don't spend millions, we spend billions. And it's very easy to sit back on your laurels and just watch the money come in, but you realize that you have to take action. You have to have a competitive facility, and we didn't have it, and this board had the intestinal fortitude to get on and do it.
I think that was just an absolutely key decision in the period that I've been on the board. Do I have any regrets? No, I most certainly have none. I think I'm leaving the board in the capable hands of a very capable Chair, very capable Chief Executive, and a fabulous management team, plus a group of very accomplished directors. I'd just like to finish off by saying thank you very much and no regrets.
Thanks, Mark. As I mentioned, we're really going to miss Mark around our table, but he's added so much value, and we're very privileged to have had his service. I see coming up on my screen now there's another question from Stephen Mayne, and I'm just going to truncate the question, but I will answer it. He talks about New Zealand being a backwater because we do not have voting on the annual Remuneration Report. Can you leave this question on the screen, thanks, so I can talk about it? Thank you. Yeah. Can you Okay. Anyway, talks about us being backwater because we don't have voting on the Remuneration Report, whereas companies like Xero and Fletcher Building do. Xero isn't actually listed on the NZX. It's an ASX company.
If we look at the NZX more generally and practice in New Zealand, we don't have voting on Remuneration Reports. That said, we have been very, very focused on how do we increase our disclosure around Remuneration Reports to give you as much information as we really can give you and what we think you would like to see. We've even invited shareholders in to talk to our Remuneration Committee in terms of the sorts of disclosures that we may or should be thinking about having in our report. So we have talked about putting it out for a vote. It isn't New Zealand practice. We aren't a fully listed company on the ASX. We have a limited piece on the ASX, and we do not intend at this stage to have shareholder voting on our Remuneration Report.
It also asked for Sean's views, but Sean is one of eight directors, and so it is a decision that's been made by the board. Therefore, I'm not going to pass the question to Sean for that second part. Could I have the next question, please?
There are currently four further questions, Chair. The next one is from shareholder Lance McCohen. Where do you see Auckland Airport heading as environmental issues become more important?
We pay a huge amount of attention in relation to environmental, and one of our board subcommittees is the Safety, Sustainability and Operational Risk Committee, which spends a large amount of time thinking about environmental issues. It is a very important focus to us as a company. We probably had a learn the hard way where we had thought that we had fully taken into account environmental issues and climate change and then were hit by the floods in 2023. We are actually incredibly fortunate that the stage of development, of the infrastructure development, was such that we could change our plans and even increase our infrastructure to deal with serious stormwater events in the future. It is very much a focus, and it is very much a lens that we put across everything. Rest assured
The next question is from Eva Quidding. Is artificial intelligence incorporated into Auckland Airport's way of work? If yes, in what ways and how?
Eva, that is probably an easy question for me to have because we had our Chief Information Officer yesterday giving us a good session in relation to how we are thinking about artificial intelligence. Artificial intelligence is the way of the future, and I know you mentioned before some concerns around AI. I think the piece around AI is, AI is, it is here. It is part of our way for the future. How do we think about AI? How do we use the tools? But how do we govern it really carefully to make sure that we get the right outcomes and protect the company and people as well? We are incorporating AI into many aspects of the business.
You will appreciate, a business like ours, not only will we use AI to assist in processes and speed up processes, but also in terms of technology that we might deploy through the airport itself to make sure that security is better, that issues are dealt with very quickly, even down to how often should we clean the bathrooms. There are some really good uses for AI. Please rest assured that we are being very careful around its use and its governance, and I think we have got a good team working on it.
The next question is from Lucy Bosher. As part of the terminal expansion plans, have there been discussions regarding lounge accessibility, specifically looking at how other international airports offer greater flexibility? With increased passenger capacity, is there an appetite to introduce or expand casual pay-per-use lounges that do not require exclusive airline or alliance memberships to access?
Carrie, I will pass that one to you to talk on that.
Short answer is yes to that. We currently have a casual pay-per-use lounge in terms of Strata Lounge in the international terminal, and we do find the demand that that has. You are right, airline lounges continue to grow as the demands of those grow, so the infrastructure takes that into account. As well as we are continuing to refine and ensure that the offering of the Auckland Airport Strata Lounge also meets some of those needs that you outline in your question there.
The next question is also from shareholder Lucy Bosher. With the ongoing terminal upgrades providing fantastic opportunities for public art installations, could the board please comment on the policy regarding artwork selection? Specifically, can you confirm whether there is a commitment to exclusively commission local human artists for these spaces and whether the use of generative AI art is explicitly ruled out?
Look, thank you for your question. In relation to artwork more generally, in our view as a board, we view that very much as a management, an operational decision and a management decision. So certainly, we have left those final decisions to management. That said, we have been very, very careful and particular, particularly as we look to the new terminal, that we properly reflect those particularly Iwi that are in our region and that we actually can bring a lot of that to the table as well. So, I think there's a balance there between what we have discussed as a board and where management needs to fulfill its own obligations. I'm certainly not an advocate of boards jumping into management's business. I think our role is very much to govern.
There are no further questions online, Chair.
Thank you very much. Well, as there are no other questions from shareholders online and we've had the questions from the room, look, thank you to all of you that have asked questions. That brings today's meeting to a close. So I really thank you all online and in the room for your participation and your ongoing support of Auckland Airport. I'd particularly like to extend my sincere thanks to the Auckland Airport team that are sitting down here for their professionalism and dedication in continuing to build the airport for the future. On that note, I invite those of you that are in the room to join the directors and management and auditors for some refreshments, and I declare the meeting closed. For those online, sorry we can't pass them through. So, thank you for joining us. Thank you, everybody.