Auckland Airport agrees to purchasea stake in Cairns and MackayAirports

Auckland International Airport Limited (Auckland Airport) today announced it has agreed to purchase from Westpac Bank a 24.55% stake in North Queensland Airports(NQA), the operator of Cairns and Mackay airports in Queensland, Australia forA$132.8m (approximately NZ $166m).Auckland Airport’s chairman, Tony Frankham, said, “This is a significant milestone forAuckland Airport and for our strategy to grow beyond our core business in Auckland. This proposed acquisition opens up exciting new opportunities to strengthen and growair services connections with Cairns as a stepping stone between New Zealand andthe high-growth tourism markets of Asia, and enables us to leverage our world class expertise in the large scale movement of people and goods to grow shareholder value.”Cairns Airport is Australia’s seventh busiest airport, with approximately 3.7 millionpassengers in the year to 30 June 2009 (compared with Auckland Airport’s 13.0 millionpassengers in the same period). It is the closest international airport to Asia on Australia’s eastern seaboard and is the gateway to Tropical North Queensland, an internationally renowned tourism region boasting two World Heritage listed attractions;the Great Barrier Reef and the Wet Tropics Rainforests. Mackay Airport is an importantregional domestic airport with nearly 1 million passengers in the year to 30 June 2009. The airport is the main airport servicing the Bowen Basin, an important region fornatural resources, which contains one of the largest deposits of coal in the world.Mackay Airport also benefits from its close proximity to the Whitsunday resort islands.

Auckland Airport’s chief executive, Simon Moutter, said, “Since indicating in March 2009 that we would pursue opportunistic but carefully selected step-outs, we’ve lookedat a range of opportunities to drive synergies and volume for our core business at Auckland. We also recognise that our most important value driver is growth in international passenger volumes. We believe that Asian tourism markets offer thegreatest opportunity for volume growth and that one of the keys to growing Asian trafficis improved air services connections. Driving more travel demand out of Asia will becrucial to the future growth of both Auckland Airport and the New Zealand tourismsector.”“New Zealand has underperformed against Australia in gaining a share of Asiantourism, so we have decided to take a position in the Australian market in an effort toget better connected and lift our market share. While our primary focus remains directAsian connections with Auckland, an important stepping-stone is to strengthenconnections with other strategically located airports.”“Cairns Airport fits the bill in terms of its location, scale, focus on Asian tourism, andmarket diversification opportunities. Mackay offers additional diversified exposure to the booming Australian resources sector.”“This is very much a case of the right deal at the right time. We’ve monitored thissituation closely over the last year since privatisation by the Queensland Government, and we’ve now been able to take advantage of a rare opportunity to enter theAustralian airport market alongside key partners (Infrastructure Investment Fund,advised by JP Morgan Asset Management; and The Infrastructure Fund, managed byHastings Funds Management, the largest airports funds manager in Australia).”NQA Chairman, Jason Zibarras, welcomed Auckland Airport as a proposed newshareholder and said his Board of Directors was looking forward to forging a newalliance.“As an airport operator investing in NQA, Auckland Airport will bring additionalexpertise. Their proposed investment is a welcome mark of confidence in the outlook for Cairns and Mackay,” Mr Zibarras said.Mr Moutter said the Cairns/Mackay investment is relatively modest (around 5%) as a proportion of Auckland Airport’s total assets. “Auckland remains our core business. Our

commitment to continuing to be one of the 10 best airports in the world and developingmore air services to help grow New Zealand tourism and trade won’t be changing.”Auckland Airport believes the proposed deal to be strongly value accretive, offering an equity return on investment in the mid teens percentages. It will initially be financedfrom existing debt facilities. Subsequently, the funding strategy is likely to involve amixture of debt and equity consistent with Auckland Airport’s current capital structure.The proposed purchase, which is due to settle on 13 January, is conditional on NQAobtaining the consent of its financiers to the proposed transaction prior to that date.Auckland Airport would become the only airport operator shareholder in NQA. Its shareholding arrangements would enable it to exercise strategic and operationalinfluence and drive benefits from joint air-services development and operationalexpertise sharing across all three airports.Mr Moutter added, “Cairns has been underperforming due to the decline in some keymarkets such as Japan. However we believe it is poised for a strong rebound, drivenby improving tourism demand, recently announced new air services, new FederalGovernment initiatives to encourage foreign airlines to fly to and beyond regionalinternational airports such as Cairns, and more than A$45m of committed governmenttourism support.”“We believe this is a good move for Auckland Airport and New Zealand and Aucklandtourism”, said Mr Moutter.