Christchurch Airport well placed to ride out global pandemic
Christchurch Airport is citing lessons learnt from the earthquakes, extensive changes it made to its business across 2015-2019 and its preparation for events like a pandemic, for its ability to pivot to a domestic operating model that can essentially break even while the pandemic’s impact on the borders evolves.
The airport has revealed that it made a net profit after tax (NPAT) of NZ$1.2 million in the first half of its financial year 2021, which runs July to December 2020.
Although its passenger numbers and total operating revenue for the period were down 51% and 31% respectively, all other core operating costs were compressed.
On the bright side, Christchurch Airport reports that there was strong growth in dedicated freight flights from Christchurch during the six months (up 22%) and e-commerce driven parcel freight volumes increased circa 25%.
Noting the same period last year had no COVID-19 impact with open borders and essentially no contribution from the Novotel Christchurch Airport.
“Though our NPAT has been materially impacted short term with borders closed, it is a credible result to pivot to a domestic only model and get our business to break even while also keeping our capital and strategic projects progressing”, says Malcolm Johns, chief executive of Christchurch International Airport Limited (CIAL).
“The lessons we learnt and the hard work and changes we made post quakes are at the core of this. Among the lessons learned were revenue diversification, operating cost flexibility and building leadership deep into our team.
“The benefit of the changes made between 2015-2019 can be seen in the growth and resilience of our property portfolio, more flexibility of core operating costs and the addition of the Novotel Christchurch Airport (currently operating as a Managed Isolation Facility currently)”.
Board chair, Catherine Drayton, believes that the airport’s decision to invest in people talent and leadership development of airport staff has really paid off.
“Our leadership and wider team worked incredibly hard post-quakes to change our business, address our risks, build resilience across the business and prepare us for an event like a pandemic,” enthuses Drayton.
“In these events you are confronted with many things beyond your control and leadership makes the difference.
“We wanted to ensure we could navigate such an event with a philosophy of stakeholder equity and fairness – balancing the needs of our customers & our staff & our shareholders – without having to revert quickly to shareholders for new equity or to rapid staff reduction to compress operating costs quickly. Our team has so far achieved this with an enormous amount of effort and hard work.
“Our focus over coming months is to ensure we keep our talent as other sectors around us who aren’t as affected look to bolster their talent pools. This will ensure the airport can emerge quickly and strongly to make the most of opportunities on offer as borders re-open.”
On COVID-19, Johns comments: “We weren’t expecting it, but had prepared for an event like COVID-19. We knew how we wanted to navigate such events by balancing the needs of, and being fair to, our customers, staff and shareholders.
“For about a year now we have balanced our approach to business between the needs of our customers, maintaining our people’s employment and working conditions while focusing on preserving shareholder value.
“The reality is we are going to keep doing this for the near-term, while also ensuring our strategic projects keep progressing and we position the business to take advantage of the post COVID-19 opportunities.”