Auckland International Airport’s FY25 results: Ascending slowly amid headwinds
Auckland International Airport (ASX:AIA), New Zealand’s premier gateway handling the bulk of the nation’s international traffic, delivered a resilient performance for 2025, after navigating a weakening economy, airline capacity constraints, and ongoing infrastructure investments.
Auckland International Airport is also the operator of the 1,300-hectare precinct that extends beyond aviation to include retail, parking, hotels, and commercial properties –plus a stake in Queenstown Airport, the latter seeing 2,563,445 passenger movements in the calendar year 2024.
Auckland International Airport reported an adjusted net profit after tax (NPAT) of NZ$310 million, squarely within its guided range of NZ$290 million to NZ$320 million. NPAT grew 12 per cent over the prior year, reflecting the airport’s ability to capitalise on recovering passenger flows and diversified revenue streams. Total passenger volumes hovered around 18.7 million, reflecting a modest one per cent uptick amid a slow post-pandemic rebound.
The standout feature of FY25 was the robust revenue expansion, which climbed 12 per cent overall to surpass NZ$1 billion. Double-digit gains in aeronautical charges and non-aeronautical operations drove growth. Aeronautical revenues surged 14.5 per cent to NZ$449 million, bolstered by scheduled price increases and a 3.4 per cent rise in international passengers. The latter approached 92 per cent of pre-COVID levels by year’s end, with second-half growth moderating to 2.6 per cent as global uncertainties lingered.
Domestic passengers, however, dipped slightly by 0.6 per cent, hampered by Air New Zealand’s engine troubles that curtailed seat capacity and compounded cyclical pressures on business and leisure travel.
Non-aeronautical revenues advanced 10 per cent to NZ$556 million, with property rentals leading the charge at a 13 per cent increase to NZ$203 million, fueled by new developments like facilities for IKEA and DHL, alongside full-year contributions from prior projects and organic rental growth. Despite weaker domestic demand, car parking income grew nine per cent to NZ$72.5 million, as enhanced offerings such as the Transport Hub and Park & Ride South attracted more users, particularly international travellers. Retail revenues edged up three per cent to NZ$189 million, supported by refurbished stores, promotional pushes in duty-free, and expansions in food, beverage, and lounge services, though macroeconomic headwinds were noted.
On the expense side, Auckland International Airport demonstrated disciplined cost management, with operating expenses rising eight per cent to NZ$304 million for the year, though the second half saw a restrained 1.3 per cent increase following tighter controls after a steeper first-half climb. Depreciation jumped 19 per cent to NZ$201 million, reflecting commissioned assets and revaluations, while net interest costs held steady at NZ$72 million, aided by a lower weighted average interest rate of 5.52 per cent and reduced borrowings after a capital raise.
Net debt fell seven per cent to NZ$2.5 billion. Capital expenditure totalled NZ$1.1 billion, consistent with plans to upgrade infrastructure, and the company maintained its dividend at 13.25 cents per share, representing a 72 per cent payout of underlying profit, signalling confidence in cash generation given the 14 per cent increase in shares outstanding post-raise.
Looking ahead to FY26, Auckland International Airport is guiding adjusted net profit between NZ$280 million and NZ$320 million – implying flat to modest growth. Persistent airline capacity issues, a subdued New Zealand economy, geopolitical tensions, and construction-related disruptions.
Passenger assumptions include domestic volumes expected to edge up two per cent to 8.6 million, buoyed by the resolution of engine problems, while international flows may grow three per cent to 10.6 million. However, these gains will be offset by discounted aeronautical pricing, implemented to align returns with regulatory benchmarks, reducing charges by an average of 11 per cent over the next two years, which will curb revenue growth potential. Combined depreciation and net interest are anticipated to rise to around NZ$300 million, a 10 per cent increase, further pressuring margins.
Capital spending is expected to rise to between NZ$1.1 billion and NZ$1.3 billion, as the company advances its NZ$6 billion program to integrate terminals and expand capacity toward a 2032 target of 27.7 million passengers, nearly double current levels.
Strategically, Auckland International Airport is laying the groundwork for a longer-term uplift. The company is transitioning to a single duty-free operator with Lagardère, is streamlining and enlarging its retail footprint, is refining transport options, and is leveraging its 150 hectares of surplus land for property developments like a cold storage facility.
Regulatory clarity has improved, with the Ministry of Business, Innovation and Employment opting against legislative changes, preserving the information disclosure regime and easing investor worries. While risks persist – such as deviations in passenger recovery, capex execution, and interest rate shifts – the airport’s geographic and infrastructure monopoly, coupled with barriers to entry and a track record of efficient management, positions it well for organic growth as global travel normalises.
The Montgomery [Private] Fund owns shares in Auckland International Airport. This article was prepared 28 August 2025 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade this company, you should seek financial advice.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
