Marcus Padley

The Auckland International Airport story is a simple one. It’s an airport! It makes money as common flightless people travel to and from its runways, earning bonus revenue if they need to eat, shop or park during their visit. It has a monopoly position, fixed cost base, an increasing number of ways to earn revenue (rising number and increased targeting of shops to wealthy international passengers) and the number of planes and people in them is growing with new routes announced regularly and capacity increasing. In addition to the airport, it owns a chunk of land prime for development, providing diversity and further options for growth. This is a defensive infrastructure stock with bonus growth in earnings. But the investment case is so one-sided that most people already know about it, hence the incredible share price performance. Shares have consolidated recently, and we’ve taken advantage of this by adding AIA to our MT Growth Portfolio. There is possibly some further consolidation ahead, but we’re happy with the longer term outlook. (VIEW LINK)


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