Auckland International Airport Ltd (ASX: AIA) has experienced modest share price growth over the past week after the airport announced it would lower its fees.
AIA cut its fees effective from 1 July 2025 after New Zealand's Commerce Commission (ComCom) noted it was charging airlines too much to use the airport. The regulator claimed the business was earning around $150-$227 million more than it should.
Auckland Airport is the largest in New Zealand. In pre-COVID fiscal 2019, it handled 21 million passenger movements, or approximately 70% of the country's international visitors.
This afternoon, AIA shares are trading just 0.63% lower at $7.145, and have risen 2.21% over the week.
The airport has posted a 3.1% gain over the year despite fluctuations in value.
Between November 2024 and late January, AIA's share price jumped 22.2%. Within a month, it dropped 10.27%.
Despite the volatility, analysts at Macquarie Group Ltd (ASX: MQG) hold a positive position on the stock.
Here's what the broker had to say.
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Growth expected but headwinds ahead
Macquarie maintains its outperform rating on AIA stock but has revised its target price to NZ$8.55, down from NZ$8.63, due to expected nonaeronautical headwinds.
The new target price represents a potential 12% upside.
"Passenger volumes continue to recover towards pre-Covid levels, with PSE5 pricing and non-aeronautical revenue opportunities providing appealing leverage to the pax volume recovery," the broker said in a note to investors.
AIA has provided FY25 adjusted net profit after tax guidance of $290 million to $320 million and is due to announce its FY25 result on 21 August.
The broker lowered its FY26/FY27E EPS to 3% and 4%, respectively, to reflect nonaeronautical headwinds. Retail is expected to be impacted by the domestic jet terminal integration project and 600 fewer car parking spaces due to the expansion of the regional airfield.
"Since AIA released its PSE4 passenger forecasts, a combination of subdued macroeconomic conditions, geopolitical uncertainty and most significantly, Air New Zealand's engine issues that have caused ~20% of the airlines jet fleet to be grounded, have resulted in actual FY24/ FY25 passenger volumes being well below forecast, and the growth outlook for the balance of PSE4 having been lowered," the broker said.
"AIA is set to exit FY25 with international pax growth of ~3%, a run rate that we expect to be maintained in FY26E.
"Domestic growth rates are expected to improve in FY26, consistent with increased capacity returning to Domestic routes as Air NZ's engine issues are resolved."
