An increase in the number of air travellers has helped keep Westralia Airports Corporation Pty Ltd flying high this year, but property deals have provided the thrust for the Perth Airport owner to record a bumper net profit of $17.3 million, triple the pr
An increase in the number of air travellers has helped keep Westralia Airports Corporation Pty Ltd flying high this year, but property deals have provided the thrust for the Perth Airport owner to record a bumper net profit of $17.3 million, triple the previous year’s result.
Operating revenue for Westralia was up 12 per cent for the year ending June 30 to $136.4 million, as the company benefited from the booming resources sector, which overcame a big drop-off in tourist traffic to Bali.
But income relating to the adjustment of value of land and buildings, plus the profit of the sale of land and buildings, took off to $36.5 million in 2005-06, nearly three times the $12.9 million recorded in the previous corresponding period, providing a big boost to profitability.
Pre-tax operating profit almost doubled to $24.3 million from $12.6 million last year, and a major turn-around on five years where it recorded an $8.2 million pre-tax operating loss. Earnings before interest, tax, amortisation and depreciation stood at $113.3 million, up 7 per cent, when accounting changes and irregular items were taken into consideration.
Westralia chairman David Crawford said the increase in new business activities was part of the airport’s efforts to diversify its revenue base.
For instance, property development accounted for 33 per cent of revenue, and a significant portion of the airport’s $85 million capital expenditure earmarked for spending this financial year is related to property on the site.
Mr Crawford also noted a 22 per cent rise in ground transport revenues to $23.5 million, pointing out that this was due to expanded car parking capacity. He also reflected on the growth in overall passenger numbers, which climbed 7.2 per cent to 7.1 million – boosted by a strong rise in domestic travellers.
“This was the result of a range of factors, including Western Australia’s resources boom balanced by concerns over international travel safety issues,” Mr Crawford said in his annual report statement.
Domestic passenger numbers at Perth Airport have increased every month for almost four years. On an annualised basis, interstate traveller numbers rose 9.2 per cent to 5.1 million, while international traffic, affected by a big drop in Bali-Perth travellers, grew 2.5 per cent to two million people.
The impact of the Bali bombings has been marked, with niche operator Air Paradise ceasing to fly, cutting capacity on the Perth-Denpasar route by more than 57,000 seats, the number it provided in 2004-05.
Indonesian carrier Garuda has reportedly reduced its flights, but seat capacity for the Bali route remained steady at 69,000 in 2005-06 compared with the previous year.
Qantas also cut back about 7,000 seats, offering just four Bali flights during the past financial year.
Low-cost operator Valuair stopped flying the Perth-Singapore route.
However, Emirates and Royal Brunei increased flights during the year, while Jetstar added Perth to its schedules on the domestic front.
But it was in the property side where the real activity took place – notably leases to Coles Myer for a distribution centre and BGC, which is building its brickworks.
Property developer Lester Group was also a participant in new leases, which cover 60 hectares of the 2,105ha Commonwealth-owned estate controlled by the airport.
The Westralia board also approved a 4,000 square metre, three-storey office development near the domestic terminals, which will house the airport administration on its top floor.
Some of this development has been quite controversial. While the $75 million BGC brickworks has attracted ongoing protests from locals and environmentalists, the scale of development on the airport has upset some in the state and local governments because the airport federal status puts it outside normal planning controls.
In August, the controversy prompted the state government to demand greater control over the Commonwealth-owned airport land, calling for planning powers over non-aviation related development to be reverted to state hands.
Planning and Infrastructure Minister Alannah MacTiernan supported a plan, agreed to by all state and territory ministers at the time, to have state environmental and planning laws applied to non-aviation activities and an independent panel established to assess related development proposals on airport land.
Ms MacTiernan said in a statement the federal government was abusing the Airport Act by allowing operators of privatised airports to build massive commercial and industrial estates on airport land without regard to the impact on surrounding areas.
That issue also prompted complaints from the City of Belmont, which had a long-running dispute with the airport over council rates.
Despite being supportive of development at the airport in general, Belmont complained that rules governing the estate meant the federal government had control over one third of the city area, leaving state and local councils with no say in what commercial and industrial development occurred.
