The Auckland International Airport Limited (ASX: AIA) share price is drifting lower as COVID-19 continues to impact trading.
Auckland Airport warns of continued COVID impact
Auckland Airport said that there is ongoing uncertainty around international travel which is expected to impact passenger numbers and related revenue for the rest of the 2021 calendar year.
Management said that operating expenses are growing to support full international recovery. The travel bubble with Australia has led to increased operations at the international terminal including airside and landside bussing, car parking, valet and cleaning.
Auckland Airport said that prepayment of its (USPP) debt creates a reduction in its forecast interest expense of around $10 million for FY22.
The company said that earnings guidance for FY21 remains unchanged from the prior guidance with a loss after tax of between $35 million and $55 million.
Auckland Airport believes that the timely roll-out of the New Zealand Government’s vaccine programme remains critical to reconnect New Zealand with the rest of the world.
Management Comments
Auckland Airport Chief Executive Adrian Littlewood said: “International passenger numbers and those business lines linked to passenger volumes including retail and transport, may remain very subdued for the remainder of the calendar year. However, we do expect steady recovery from early in calendar year 2022.”
Summary thoughts on the Auckland Airport share price
Things are looking better for Auckland Airport with the New Zealand government rolling out the vaccine programme and a travel bubble with Australia starting to reveal a path out of the depths of COVID impacts.
However, the uncertainty around COVID-19 cannot be ignored. A new variant emerging could derail travel plans and unrestricted international travel seems a long way off. Only time will tell if today’s lower share price is an opportunity or a trap.
