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Infratil Email Update

20 Feb 2009


For the nine months to 31 December 2008, TrustPower’s New Zealand electricity sales were 3,219 GWh. Relative to the same period a year prior, mass market sales increased 3% while total sales fell 7.4% due to reduced low-margin industrial sales.

New Zealand generation for the nine months was 1,720 GWh up 7.5% on the prior period but 7% below the expected long term average. At present TrustPower’s main hydro storage catchments are at above average levels for the time of year.

Wind generation was up 6% in the December quarter against the prior period but was down 2% over the nine months to 31 December 2008.

Customer churn continues at historically high rates and TrustPower continues to gain retail accounts.

Victoria Electricity

Victoria Electricity had 385,000 customers at the end of January, almost unchanged over the month.

Growth is continuing in Victorian where electricity prices are not capped, while in Queensland the focus is on managing the impact of higher transmission and wholesale energy prices. These obliged Victoria Electricity to significantly increase its prices in that State from 1st January.

Wholesale electricity prices in Victoria and South Australia were very high during January due to sustained high temperatures. Infratil’s risk management approach has operated as expected and, at this stage, no material net exposure to the high spot prices is anticipated.

Victoria’s tragic bushfires have resulted in all energy retailers, including Victoria Electricity, putting in place arrangements to assist affected customers, particularly those who have lost a home or family member.

NZ Bus Overview - January 2009

Northern Region
Patronage for January 2009 was 8.2% higher than January 2008, a 12% increase when adjusted for comparable work days. Year to date growth (10 months) is 8.6%.

Patronage growth was particularly strong at Waitakere’s GoWest, on cross-town routes and from SuperGold cardholders.

The Northern Region SuperGold passenger growth rate is approximately twice that of the Southern Region. Partially this is because public transport use by Auckland Seniors is coming off a lower base. It also reflects the decision of ARTA/ NZTA to allow SuperGold travel to occur at any time of the day after 9am while Southern use is not available in either the morning or evening peak times. Surveys undertaken by NZ Bus indicate that the ARTA approach in Auckland is better regarded by Seniors who are put-off by the thought of having to pay a full fare if they miss the 3pm afternoon peak time deadline.

Southern Region
January patronage was 0.5% lower than January 2008; 5% higher when adjusted for the different number of work days in the two months. Year to date growth is 1.3% with increasing public transport use by SuperGold passengers is an important part of the overall increase in patronage. While SuperGold growth in the Southern Region is only half the rate of Auckland’s, it is coming off a higher base. Wellington City Seniors catch the bus, on average, about 4 times a month, those in the Hutt about 3 times and those in Auckland only twice a month.


Snapper continues to grow strongly in the Wellington market. Close to 50,000 cards are now on issue in Wellington. Snapper is used on 50% of Go Wellington’s trips. The Snapper retail network continues to grow with 120 retail terminals, primarily in Wellington.

Key to this growth has been the issue of 8000 Rugby season passes with Snapper capability embedded. The personalised cards allow members entry to the stadium, and to use Public Transport and make retail purchases through regular Snapper powered outlets. Snapper is now working with the Stadium to allow food and beverage outlets throughout the stadium to accept Snapper.

Snapper is driving further geographic growth by implementing Snapper in the Hutt Valley. This will broaden the network and utility for customers holding Snapper cards. This is supported by new product development – Snapper is now testing pass functionality, allowing for monthly and age-related passes (i.e School passes and SuperGold), and hotlisting of cards. Snapper expects that this will be available to the public for Term 2 of the school year.

Miki Szikszai has joined Snapper this month as Chief Executive. Miki comes to Snapper from Telecom NZ where his primary experience was in developing and growing new technology based businesses to maturity.

Wellington Airport Monthly Overview - January 2009

The Qantas Group has announced that Jetstar will begin domestic operations in June and that Qantas domestic services will cease. We expect that vigorous competition from the low fares airline will stimulate demand on the key trunk routes. This announcement represents an increase in Qantas Group capacity for Wellington despite the withdrawal of the ‘Flying Kangaroo’ from the domestic market. Jetstar’s vibrant brand and growth-oriented strategy is a very positive signal for the future.

In January passenger numbers experienced a decline of 9.9% compared to January 2008. For the year to date, 3,875,274 domestic passengers used Wellington which was an 8.8% increase on 2008. The January decline on the trunk was more pronounced than in December but December and January are both difficult months from which to gauge trends because of its disproportionate forward bookings and family and leisure related travel. The numbers were also impacted by the withdrawal of a significant number of Qantas’s services to Auckland in December. We expect domestic passenger numbers to continue to be soft until the commencement of Jetstar services in June.

January produced a further increase of 10.2% in international passenger numbers versus January 2008. As with the previous month, the growth is mainly attributable to a large increase in capacity and passengers to Brisbane. Over the past months, Pacific Blue’s weekly services have increased from 3 to 8 and the other airlines have also introduced additional services from the previous year. Qantas’ recent announcement on its New Zealand operations included the discontinuation of its twice weekly Brisbane services from June. Qantas currently operates around 8% of the Brisbane to Wellington capacity. Of the other major international routes, Melbourne performed well while Sydney remained flat. For year to date, 506,945 international passengers used Wellington Airport, an increase of 1.6% on 2008.

Bond Issue
Wellington Airport’s bond offer has now closed. The bond issue, used to retire some existing debt and for financing the Airport’s capital development projects, has raised $100million. Its initial offer of $50 million, with oversubscriptions of a further $50 million, of bonds has been fully subscribed.

Infratil Airports Europe Monthly Overview - January 2009

Glasgow Prestwick Airport
Glasgow Prestwick handled 131,875 passengers in January, down 9% against January 2008.
Reduced numbers to Dublin and London and the loss of charter business volume were the main impacts on year-on-year passenger volumes.
The month’s performance brings the year-to-date passenger total to 2,024,947 which is 2% behind the equivalent period last year.
Glasgow Prestwick handled 1,064 tonnes of freight in January, slightly down on December and 41% down on the prior year tonnage.
The year-to-date freight performance is down 36% on the equivalent period last year at 16,581 tonnes.
The airport has recently entered into a business review aimed at reducing costs and bringing resource levels in line with current aviation activity.

Kent International Airport
Kent International handled 2,265 tonnes of freight in January, down 39% against January 2008.
Cargolux tonnage again recorded a significant rise against the prior year, however this continues to be offset by the reduced MK Airlines volume (-84%).
At 17,554 tonnes, the year-to-date freight performance is 30% down on the same period in 2007/08.

Lübeck Airport
Lübeck Airport handled 32,107 passengers in January, up 9% against January 2008.
The result is driven mainly by the reintroduction of a Dublin service to the winter schedule and the new daily domestic service to Frankfurt Hahn.
The year-to-date passenger total of 456,449 is down 8% on the equivalent period in 2007/08.
The outlook for 2009 is very positive with a summer Ryanair daily service to Palma now on sale and an increase in the Dublin service from three to five flights per week.

Whenuapai Airport

In January Waitakere City Council announced that it was delaying public hearings on a proposed rezoning of Whenuapai Airport after being told by the new Minister of Defence, Hon Dr Wayne Mapp, that Air Force use was likely to be ongoing. 

The previous Government had indicated that the Airport would become available for alternative use as the Air Force was to consolidate its operations to Ohakea and Waitakere City Council had determined that the best alternative use was as a civil airport. Infratil had been enlisted by the Council to assist in bringing this about. Background on these developments are available here

Waitakere Mayor Bob Harvey indicated that his Council received assurances from Dr Mapp that the parties will work together so that the Airport’s infrastructure will be preserved and enhanced.

As the New Zealand Herald Editorial of 2 February noted, retention of Defence capability of the Airport makes sense, it is just a matter of ensuring that its upgrade and future use is done in the most effective and efficient way. Mayor Harvey noted “the Airport is a vital piece of national infrastructure, with its potential to create economic activity and jobs.” Infratil remains interested in assisting.

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