The impact of COVID-19 on the aviation industry more than halved the profit of the company operating Canberra Airport in 2019-20, according to documents lodged with the corporate regulator.
The directors’ and financial report of the Snow family’s Capital Property Finance Pty Ltd reveals just how much the pandemic eroded the airport’s financial position and hurt the business.
In 2019-20, revenue from operations at the Airport fell to $275 million from $297 million the year before. Profit after tax was $97 million, down almost 60 per cent from $242 million in 2019.
But the company did pay the Snow family a $60 million dividend for the year — up from the $15 million received the previous year.
Managing Director Stephen Byron said in the directors’ report that the Airport observed a decline in air passenger traffic from March 2020 onwards which reduced aeronautical and associated property revenues and resulted in a decline in the investment property valuation of the terminal precinct.
But he said lease income relating to office and retail investment property was not materially impacted by the pandemic.
He added that the directors believe the company will continue as a going concern and be able to pay its debts after securing an increase to its undrawn facility during the year, and taking into account its liquidity position and COVID-19 impacted projected results for the 2020-21 year.
Current borrowings increased in 2019-20 to $292 million from $204 million the year before.
The pandemic’s travel restrictions and border closures slashed the number of flights in and out of Canberra to only a handful and forced closures on some days, and the airport is still recovering as restrictions continue to ease and flights are restored.
Many of the businesses servicing the airport had to close and Mr Byron said in his report that the airport provided rent relief to its tenants beyond the minimum by the National Cabinet’s Mandatory Code of Conduct.
The company also qualified for the Federal Government’s extension of JobKeeper to 31 March 2021 so businesses that are significantly affected by the pandemic can stay afloat and continue to pay staff.
Mr Byron said that amid the ongoing uncertainty the timing of the recovery of aviation business operations was difficult to predict and the airport would continue to cut its costs through periods of low activity.
But the company planned further investment at the airport site, primarily in commercial office development.
The company’s property arm including the Brindabella Business Park, the Vibe Hotel and Majura Park retail precinct.
Despite a tough year and more pain to come, the overall health of the company is reflected in its strong balance sheet, with net assets of $2.55 billion and total borrowings of almost $1.5 billion.
Head of Aviation Michael Thomson said the Airport was now operating at about 19 per cent of capacity for this time of the year, with about 110 flights a week, and next week that would rise to about 150, or about 38 per cent.
It’s a far cry from August when Mr Byron warned that the Airport would have to shut down its operations completely if a way to boost domestic aviation could not be found by 1 October.
At that time, Mr Byron had said the airport was operating at only 1 per cent capacity with less than 100 passengers a day after states closed their borders due to COVID-19 outbreaks in NSW and Victoria.
Mr Thomson said both flight capacity and numbers were starting to pick up.
”We are seeing more people through the terminal as well, for pleasure but also business. It’s time for people getting back into the office,” he said.
Flights were available to most capitals, and there should be an increase soon on the current 21 flights to Sydney, and the number to Melbourne will jump from the eight now scheduled once that border opened, Mr Thomson said.
Canberra Airport has also pursued a strategy of cultivating regional tourist destinations such as Newcastle, Port Macquarie, Ballina/Byron, the Sunshine Coast, Cairns and Hobart, and securing new regional carriers such as Link, Fly Pelican and Alliance Airlines.
Mr Thomson said airport businesses were also benefiting, with the COVID-delayed Capital Brewing bar opening last Friday, coffee shops extending their hours and other restaurants looking at reopening soon.
He said the 20-year Master Plan still stood but there might be some changes regarding international routes, with New Zealand more of a priority than China.
The Airport still hoped to welcome Singapore Airlines back when conditions eased and was pushing hard for a NZ route as soon as quarantine requirements were lifted.