ADELAIDE AIRPORT LIMITED ANNUAL REPORT

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Adelaide Airport Limited (AAL) is a private company whose shareholders in the main are Australian Superannuation
Funds. AAL is the holder of the lease and operates Adelaide and Parafield Airports for a term certain of 50 years,
with a right of renewal for a further 49 years, from the date of effect 28 May 1998.

Adelaide Airport is the major gateway to the State of South Australia and services international, domestic and
regional flights with a total throughput in 2010/11 in excess of 7.3 million passengers and 100,000 aircraft movements.

Adelaide Airport is located 6km due west of the CBD of Adelaide and 2km from the shores of Gulf St Vincent.
Parafield Airport is located 19km to the north east of the CBD adjacent the major Adelaide to Darwin railway line
and Main North Road. Both airports are surrounded by recent residential, recreational and light industry developments.

Chairman: David Munt Managing Director: Phil Baker

Directors: Alan Mulgrew, James Tolhurst, John Ward, Jay Hogan, Anne Howe and Chris McArthur

Solicitors: Thomson Lawyers Auditors: PricewaterhouseCoopers

Shareholders: UniSuper Ltd 49.0%, Local Government Superannuation Board 19.5%,

Colonial First State 15.3%, Industry Funds Management 12.8% and Perron Investments 3.4%

Subsidiaries: 100% Parafield Airport Limited, 100% Adelaide Airport Management Limited,
100% New Terminal Financing Company Pty Limited, 100% New Terminal Construction Company Pty Limited

Registered Office: 1 James Schofield Drive, Adelaide Airport, South Australia 5950
ABN: 78 075 176 653 Phone: +61 8 8308 9211 Fax: +61 8 8308 9311
Email: [email protected] Website: www.adelaideairport.com.au
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VISION CONTENTS
Adelaide Airport will be a successful, modern, vibrant Centre and Gateway,

promoting the economic benefits and cultural experience of South Australia.

Customer service, critical to our success, will be provided at the highest levels

to our community and stakeholders. Our people will be continuously developed

CHAIRMAN’S REPORT
02
to provide them with the requisite skills and experience to perform their

duties efficiently. The environment, safety and security remain paramount.

YEAR IN BRIEF
05
MANAGING DIRECTOR’S REPORT
06
BOARD OF DIRECTORS
09
MISSION
Adelaide Airport Limited develops and operates Adelaide and Parafield Airports

as a business enterprise. We deliver safe and efficient facilities for passengers,

EXECUTIVES
09
aircraft, freight and property services for tenants and retailers, alongside

general commercial developments.

OPERATIONS
10
PROPERTY
14
FINANCIAL PERFORMANCE
18
VALUES
We will: conduct ourselves with integrity in a responsible manner, be efficient and PARAFIELD AIRPORT
22
practical, remain open and friendly, be responsive and respectful and consistently

behaving in a positive manner. ENVIRONMENTAL SUSTAINABILITY

24
PEOPLE AND CULTURE
26
EDGE
COMMUNICATION /COMMUNITY
28
We will thrive: by making timely and effective decisions, by developing innovative

solutions, and through clear and consistent communication with all stakeholders. CORPORATE GOVERNANCE
32
THE FUTURE
36
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C H A I R M A N ’S R E P O R T

Chairman - David Munt

The past financial year has been a highly volatile one for the possible because of our solid financial position and stable outlook, and we have prepared a submission on the key outcomes. air-conditioning for a local kindergarten, we are always looking
aviation industry, but not for the reasons we might have anticipated. as re-affirmed by Moody’s and Standard & Poor’s ratings agencies. The report appears to be a step in the right direction, exhibiting to provide the greatest possible benefit we can to our State.

Major non-aeronautical projects such as manufacturing and a better understanding of the issues in running a major airport. Our contribution to the growth of South Australia’s economy
A series of natural disasters, both home and abroad, in the latter
half of 2010/11 has clearly had an impact on Adelaide Airport Ltd’s warehousing facilities for Manuele Engineers and Boart Longyear At all times we have been conscious of maintaining our strong should never be underestimated. More than 8000 people are
operations. However, we have maintained a solid level of passenger have also been completed within the airport precinct. environmental credentials within the aviation industry. We have directly employed as a result of Adelaide Airport activities,
growth and our revenue has continued to grow, despite a 25 per formed a three-year partnership with the University of Adelaide’s of which approximately 5,200 work within the airport precinct,
Internally, our shareholding list has undergone some changes in
cent reduction in our Passenger Facilitation Charge during the year. Centre for Energy Technology to undertake research to develop making it the largest single site employment precinct in the State.
2010/11, and we have also seen a minor re-structuring of the Board.
We farewelled John McDonald and welcomed both Anne Howe clean energy solutions for Adelaide Airport. This is an exciting There are busy times ahead, through the continuation of our major
As in the case of the global financial crisis of three years ago,
and Chris McArthur. project that could have far-reaching benefits for the airport infrastructure investment at Adelaide Airport and the preparation
we have been able to negotiate this unexpectedly turbulent period
and the aviation industry as a whole. of our revised master plan for Parafield Airport.
because of prudent decision making and sound investment strategy John McDonald was a founding Board member and assisted
over more than a decade. us through some significant strategic years with major We continue to play a major role in the local community by We are confident we can maintain our strong commitment
infrastructure and passenger growth. supporting charities, community organisations and sporting clubs. to providing the highest quality aeronautical facilities
Importantly, our strong balance sheet enables us to get on with the
Whether it be partnering with the Adelaide Festival, kicking goals in South Australia for years to come.
necessary work to expand our operations and provide a better level of Externally, an initial draft of the Productivity Commission’s report
with Women’s Premier League Division Football (soccer) or providing
service to our customers. Re-investment in our infrastructure is made into the Economic Regulation of Airport Services has been released,

C onstruction starts on a ne w multi - level car par k and pedestrian pla z a ad j acent T 1 . Adelaide Airp or t Brighton Jetty Classic Sculptures by the Sea gi ves ar tists the opp or tunity to publicly showcase their work.
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YEAR IN BRIEF

Financial results Airport operations

• Revenue, which excludes interest - $152.9 million • Moderate and sustained traffic growth exceeding
(last year $147.5 million) 7.3 million passengers

• Earnings before interest, tax, depreciation and amortisation and • Initial successful operation of Vietnam Airlines charter service
fair value adjustment of investment properties - $93.0 million • Airport Watch initiative adopted at Adelaide Airport
(last year $91.6 million) an increase of 1.6%
• Upgraded Terminal Area RADAR (TAR) commissioned
• Net profit before tax of $21.1 million (last year net profit by Airservices Australia
before tax of $21.7 million). Excluding the fair value adjustment
• Airservices Australia’s new tower project well ahead
for investment properties the net profit before tax this year
of schedule at Adelaide
is $11.4 million (last year $9.1 million)
• Runways and taxiways overlay project completed
• Dividends on redeemable preference shares $28.3 million
and nominated for numerous awards
(last year $28.3 million)
• Communication plan for overlay project applauded
• Increase in fair value of investment properties of $9.7 million
by local residents
(last year increase of $12.6 million)
• Landside Infrastructure Project commenced
• Credit Rating review retained - Moody’s at Baa2 / stable;
• University of SA announces significant growth
S&P at BBB / stable
in flight training - Parafield
• Successful completion of the most recent round
• Taxiway lighting upgrade at Parafield
of re-financing activity

Property development
Statutory compliance
• Increased land holding portfolio through purchasing property
• Safety and Security regulatory audit compliance
in the 30 - 35 ANEF contour
satisfactorily maintained
• Australian Federal Police building negotiations completed
• Equal Opportunity for Women in the Workplace
• T1 Retail continues to be recognised with many State industry awards
compliance satisfactorily maintained

• DoIT lease review assessment satisfactory report

Other notable events
• Master Development Plan for a Landside Infrastructure • Hosted the Australasia Wildlife and Bird Hazard
Project and Terminal Link Bridge approved Management Seminar
• ACCC Quality of Service report - reasonable • Hosted the 2010 Australian Airports Association Convention
and Technical Workshop

• Successfully negotiated increased services to Denpasar (Bali)

operated by Pacific Blue (Virgin Australia)

• Staffed information booths at public forums such as

The AFTA Travel Expo and The Disability Information Resource
Centre State Exhibition in the city and regional centres

T1 - Family Friendly

A delaide A irport ’s Passenger Facilitation C harge for repayment of T 1 ’s construction is reduced by 2 5 per cent. Adelaide Airport SA Taxi Driver of the Year Awards recognise the role taxi drivers play in making SA a great tourism and business destination.
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M A N A G I N G D I R E C T O R’ S R E P O R T

Financial year 2010/11 will be remembered for a whole range of budget - all of which should improve safety for aircraft landing
natural disasters in the Asia Pacific region, ranging from the Tsunami at and departing from the airport.
in Japan with associated nuclear issues, through to the earthquakes Extensive negotiations have concluded for the new AFP office, with
in New Zealand and the Chilean volcanic ash cloud, all of which construction set to begin in the latter half of 2011, while construction
touched Australian aviation negatively to some extent. of the Boart Longyear facility, the latest development in the Burbridge
Closer to home, there was widespread flooding in Queensland Business Park, has been completed and the building now occupied.
and to a lesser extent in Victoria, and bush fires reported in Looking to the future, international traffic looks set to continue the
WA, all around the turn of the year in the middle of summer. current growth, based on the recent successful increase in services
Whilst South Australia escaped the direct impacts of these to Kuala Lumpur with Malaysia Airlines, additional non-stop capacity
events, the same could not be said of the domestic travel to Hong Kong with Cathay Pacific and expansion of Bali services
market, which was severely impacted at a key holiday time. with Virgin Australia.
In our case, the major factor was the volcanic ash cloud, Domestically, the situation is harder to predict given the recent
which caused widespread cancellations of domestic services, problems experienced by Tiger, countered by the ambitions of
putting a dent in our year end numbers, coming as it did existing operators and Air Australia. Regionally, continued growth is
so late in the financial year. anticipated, particularly driven by an increase in mining and exploration.
However, despite all of these factors, the airport still achieved However, we have yet to gauge the longer term impact of the
a new passenger throughput record of 7.3 million passengers Carbon Tax and continued volatility of the financial markets,
(+3.7%). This was helped by very healthy demand internationally and will have to monitor their impact on demand.
(+4.1%), aided by the unprecedented high exchange rates and
Work is well under way on the fresh Parafield Master Plan (due to be
a return to growth in the regional travel segment (+11.6%).
completed next May) where a number of new initiatives, including
Within the airport itself, work began on our landside infrastructure our relationship with the local council and community, will be revealed.
project, including a multi-level car park, new internal road layout
Construction work will continue on the existing projects mentioned,
and pedestrian plaza - all of which will be completed in calendar
hopefully followed soon after by the expansion of T1, a new hotel, and
year 2012. Enabling works for this project have included the
possible new aeronautical support facilities and commercial premises.
relocation of the General Aviation facility, demolition and relocation
of Toll Dnata freight and DHL buildings, plus relocation of part Inevitably, there will be times when the work in progress will impact

of TAE and all of World Couriers operations. on passengers and staff progress through the airport, despite our
best endeavours. We ask everyone to be patient during this period, and
Within the terminal (T1) itself, Qantas new-generation self check-in
we will keep people informed of the latest developments at all times.
facilities have been fully installed, as have Jetstar kiosks. Work is
in hand for some minor improvements to the Customs and Border We confidently predict the end result will be significantly impressive

Protection Service areas and a number of changes to retail enough to keep us towards the top of those airports considered

tenancies are under way to allow additional outlets in the area. to be the best in country.

The new Control Tower for Airservices Australia is well under

way and will be completed later this year, and a new radar system
was recently commissioned. A full resurfacing of both runways,
all taxiways and a number of our aprons - the biggest such project
undertaken in Australia - was completed on time and within Phil Baker Managing Director - Phil Baker

V olcanic ash from C hile causes a significant number of flights to be cancelled in and out of A delaide . The Adelaide Fringe Caravan, partnered by AAL, takes to the streets of Sydney and Melbourne to promote the 201 1 Fringe Festival.
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BOARD OF DIRECTORS EXECUTIVES

David Munt LL.B(Hons) Phil Baker - Managing Director

Non Executive Director and Chairman, appointed 30 June 2004 Executive Team Leader and full Board Member responsible
• Chair of the Board
for implementing group strategies and policies.
• Member of the Property Development Committee
• Member of the Aeronautical & Related Infrastructure Committee Mark Young - Chief Financial Officer
• Ex-officio member of the Audit & Compliance Committee Responsible for the sound financial position and commercially
• Ex-officio member of the Remuneration Committee
prudent conduct of the business including effective reporting and
Phil Baker FCILT, FAICD information management systems and stakeholder communications.
Managing Director, appointed 24 April 1998
• Managing Director Sue Doyle - General Manager People and Culture
• Member of the Property Development Committee Responsible for Human Resources, industrial relations, staff training
• Member of the Aeronautical & Related Infrastructure Committee and development, occupational health & safety, service quality,
John Ward BSC, FAICD, FAIM, FCILT internal branding and executive and administrative services.
Non Executive Director, appointed 28 August 2002
• Chair of the Remuneration Committee
Malcom Andrews - General Manager Business Development
• Member Audit & Compliance Committee Responsible for route marketing and development, airline
• Member of the Property Development Committee liaison, customer relations, facilitation, product enhancement
• Member of the Aeronautical & Related Infrastructure Committee
and ground transportation.
BOARD - Seated - David Munt, Phil Baker, John Ward. Standing - Chris McArthur, Alan Mulgrew, Anne Howe, Jim Tolhurst, Jay Hogan. Chris McArthur B.Eng., MBA, GAICD
Len Goff - Company Secretary
Non Executive Director, appointed 30 March 2011
Responsible for Corporate administration, accounting,
• Member of the Audit & Compliance Committee
• Member of the Property Development Committee statutory and regulatory financial reporting.
• Member of the Aeronautical & Related Infrastructure Committee
Vince Scanlon - General Manager Airport Operations
Alan Mulgrew BA, GRAICD, JP Responsible for legislative compliance for aviation safety and security,
Non Executive Director, appointed 6 September 2006
terminals and car park operations, facility management of assets and
• Chair of the Aeronautical & Related Infrastructure Committee
infrastructure, project management, engineering and infrastructure
• Member of the Property Development Committee
• Member of the Remuneration Committee development of both aviation and commercial developments.

Anne Howe MAICD Ken May - General Manager Property

Non Executive Director, appointed 29 June 2011 Responsible for the management and enhancement of the property
• Member of the Property Development Committee portfolio, including retail, leasing, property development and
• Member of the Aeronautical & Related Infrastructure Committee
tenancy management.
Jim Tolhurst B.COMM, MBA, FCPA, FCIS, FAICD
John McArdle - General Manager Corporate Affairs
Non Executive Director, appointed 29 September 2004
• Chair of the Audit & Compliance Committee Manages, interprets and facilitates the community consultation,
• Member of the Remuneration Committee communication regulatory and statutory responsibilities towards
• Member of the Property Development Committee Master Planning. Facilitates corporate risk policy, sustainability,
• Member of the Aeronautical & Related Infrastructure Committee
business continuity and review.
Jay Hogan MBA, AFAMI, JP
Non Executive Director, appointed 29 July 2009
Member Property Development and Building Committee
• Chair of the Property Development Committee
• Member of the Aeronautical & Related Infrastructure Committee
EXECUTIVES - Seated - Sue Doyle, Phil Baker, Mark Young. Standing - Malcolm Andrews, Len Goff, Vince Scanlon, Ken May, John McArdle.

Singapore Airlines announces the return of a regular weekly 74 7 freighter service between Adelaide and Singapore. A d e l a i d e Yo u t h O r c h e s t r a ’ s B a b i e s P r o m s b r i n g s c l a s s i c a l m u s i c t o a y o u n g e r g e n e r a t i o n w i t h t h e h e l p o f A A L .
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O P E R AT I O N S

Aeronautical traffic performance

Financial Financial Financial Change Change last
Year Year Year this Year 12 Years
1998/99 2009/10 2010/11 % %

Passengers
Domestic* 3,442,159 6,040,735 6,218,077 2.9% 80.6%
International** 279,081 586,990 592,619 1.0% 112.3%
Regional 371,904 525,152 586,142 11.6% 57.69%
Total PAX 4,093,144 7,152,477 7,396,838 3.4% 80.7%

Aircraft Movements
Regular Public Transport 74,172 75,412 76,647 1.5% 3.3%
General Aviation 36,802 22,035 23,242 5.5% - 36.8%
Total Aircraft Movements 110,974 97,537 99,989 2.4% - 10.0%

Landed Tonnes
Total Landed Tonnes 1,672,105 2,250,785 2,344,618 -4.2% 40.2%
*Includes Domestic On Carriage ** Includes Transits

Freight
Export Tonnes Variations Import Tonnes Variations

January - December 05 7,818 = 8.3% 9,075 = 15.1%

January - December 06 9,379 = 19.9% 10,039 = 0.6%

January - December 07 8,582 = -8.5% 9,090 = -9.4%

January - December 08 10,113 = 17.8% 9,340 = 2.7%

January - December 09 11,719 = 15.9% 9,017 = -0.03%

January - December 10 9,263 = -20.9% 9,230 = 2.4%

Despite the man-made and natural disasters that impacted International Markets First crew - pilots trained at Parafield
on the aviation industry in general and referred to earlier The market grew by 1.0 per cent overall for the year, linked in part to
in this publication, Adelaide Airport fared well: the introduction of additional services to Kuala Lumpur and Denpasar
• Sustained traffic growth exceeding 7.3 million passengers (Bali) and continued growth across the international network. Domestic 84.1%
However, potential opportunities afforded
• Continuation of China Southern charter program and
In our quest to increase non-stop international services to and by the Federal Government’s Enhanced Regional
introduction of Vietnam Airlines charters to Ho Chi Minh City.
from Adelaide, AAL continues to work with our existing carriers who Benefits Package as detailed in the National
Total passenger activity grew at 3.4 per cent, an improvement serve Auckland, Denpasar, Hong Kong, Kuala Lumpur and Singapore, Aviation Policy Statement - the Aviation White International 8.0%
on the previous year and despite the significant impact of the whilst maintaining close relationships with carriers from China, UAE, Paper aimed at encouraging airlines to fly
Chilean volcanic ash cloud which affected Adelaide Airport Thailand, Vietnam and USA, amongst others, with an aim for these to Adelaide, have not so far materialised.
so adversely during the month of June. countries to be served by direct flights in the future.
Regional 7.9%

V ietnam A irlines and China S outhern complete a series of successful charters that could lead to future services. A t h l e t i c s S A’ s A d e l a i d e A i r p o r t I n v i t a t i o n a l a t t r a c t s s o m e o f A u s t r a l i a ’ s b e s t t r a c k & f i e l d a t h l e t e s t o t h e c i t y.
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A380 - Diversion June 2011

O P E R A T I O N S C ontin u e d

Domestic Markets Quality of Service Adelaide Airport Passenger Movements

Actual Passengers Trend
The influence of airspace closures due to the Chilean volcanic AAL avails itself of the Airports Council International Quality
Passengers
activity saw a relatively disappointing end to the financial year of Service survey and reporting service and once again has - million
Underpants
with overall growth of 2.9 per cent. continued to rate highly amongst our peer group. Within Australia, Bomber
Oil Price Increase
7m
we are at the top of the ratings for the greater majority of the
During the year Tiger reduced their network, withdrawing from
Gulf War - Part 2
measures taken.
Brisbane, Gold Coast and Hobart, operated to Avalon (Melbourne)
6m Natural Disasters
for a short period before withdrawing, finally to concentrate their We attribute this continued high performance to our internal New York World Trade USA World
Centre Attack Economic Crisis
services exclusively on Melbourne (Tullamarine) and Sydney. monitoring and assistance program with other agencies
5m
Regional Market and tenancies within the terminal in a Team T1 approach. Glasgow Airport
Attempted Bombing
The regional market bounced back from a disappointing year Unique to the majority of Australia’s airports, we are truly 4m Pilot Dispute
previously. The re-emergence of stronger regional activity continued a multi-user integrated facility and are judged by all users
throughout the year with comparative gains on a month-by-month - international, domestic, regional and charter passengers. 3m SARS
basis as high as 18.7 per cent in September and 17.7 per cent in
We remain focused on this high standard and have tasked
Asian Economic
February, delivering overall growth of 11.6 per cent for the full year. 2m Bali Bombing
an Executive Manager to champion the outcomes. Crisis

With the development of the fly-in/fly-out traffic, notably to Olympic

1m Gulf War - Part 1 Ansett Collapse
Dam, Moomba and Prominent Hill, and the continuation in exploration
and new mining activity across the State, indications are that
activity in the regional sector will continue to show healthy growth. 1989 1993 1997 2001 2005 2009 2013

Adelaide Airport welcomes its first A380 passenger service, sort of - The flight was diverted from Melbourne due to fog. The Australian Rowing Championships return to Adelaide in 201 1 for the first time in 12 years, in part due to the support of AAL.
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PROPERTY

Terminal 1 Retailing and Concessions Terminals Precinct

During the financial year a number of tenancy variations and Arrangements were concluded for a number of strategic lease
refurbishments were completed to the shops and concessions surrenders to facilitate the future development of roadway
in Terminal 1, including the following: re-configurations associated with the new multi-level car park.
The relocation of DHL Express was completed in December
• A reconfiguration of the TRS Booth and a new fitout
2010 to the Airport East Precinct as part of this process.
of the Travelex Currency Exchange in August 2010
Similarly, Toll Dnata surrendered its nearby freight complex
• New murals installed for Cibo (Net Kiosk Area) and Hungry Jack’s
lease and relocated to Export Park and Burbridge Business Park
and new seating completed for Hungry Jack’s and within the
in October 2010.
Terra Rosa Café
Additionally, with the operation of the new roundabout at
• The refurbishment of Hudsons Coffee on Level 02 in March 2011,
Frank Collopy Court/James Schofield Drive, TAE agreed to
catering for over 40 per cent increase in seating and tables
a land swap in December 2010, including arrangements for the
• A similar refurbishment of Hudsons Café adjacent to International
construction of a new workshop due for completion in late 2011.
Arrivals on the ground floor in May 2011, also including the
Other relocations included World Courier to Export Park, removal
revamping of internal and external seating areas
of several Eyecorp Advertising billboards and the transfer
• Tenancy refurbishment of Billie Chu Asian Restaurant in April 2011.
of staff car parking to alternate sites.
• A new Playtec children’s play area designed for placement
The General Aviation Terminal was relocated in September 2010
alongside Smiggle and Hudsons Coffee on Level 02
allowing Air South and Dick Lang Air Safaris to operate adjacent
Also within Terminal 1, after 5 years of operation, lease renewals to the Qantas hangar with improved apron accessibility.
were negotiated for various retail shops including Shades, Cocolat,
Commercial arrangements were concluded with the Australian
Coopers General Store, plus all border agency tenancies and for
Federal Police for the pre-commitment lease of a new 2,400m2
Singapore Airlines and Jetstar. The T1 Eyecorp advertising contract
energy-rated office development, which is to be located at
was extended until the end of 2012 pending a review of overall
Export Park facing Sir Richard Williams Avenue. The building
advertising content at the airport stemming from the new
contract was awarded to Sarah Constructions in June 2010,
multi-level car park and roadway re-configuration now under way.
and construction completion is due in mid 2012.
For the fifth successive year ‘T1 Shopping’ was awarded Property
After earlier acquisition of the Airport Cold Store structure and
Council of Australia “Excellence in Marketing” Awards for Shopping
further leases to Bidvest and Pakfresh, the building refrigeration
Centres less than 10,000m2, directed at Centre Integration
equipment was completely upgraded by December 2010,
(Finding a way to Retail Success) and a Marketing Campaign
which included replacement of ozone depleting refrigerant gas.
(Win a Pandaventure). A Commendation Award for Excellence
The premises have been repainted with new wet areas installed
in Presentation was also presented in recognition of general
making it suitable for multiple occupancy.
ambience and terminal cleanliness.

‘T1 Shopping’ continued its theme of vibrancy, the cultural experience

of South Australia and a venue for relaxation during dwell times.
Regular entertainment within the retail concourse included acoustic
guitarists, Christmas choirs, pianists, artists and event displays
- all based upon ‘Make the Most of the Moment’ and ‘Make Time Fly’.
Boart Longyear - Headquarters

Three new retail tenancies open in T1 - Travellers Services, Travelex (international departures) and Grinders Coffee. Adelai de Airp or t Ltd is a proud sp onsor of the Communi ty Leadersh ip Awa rd, pa r t of the Channel 9 Young Ach iever Awa rds.
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P R O P E R T Y C ontin u e d

Burbridge Precinct off of Transport Avenue, Netley, thereby releasing 10 hectares

A 7,000m2 Office and Technological Warehouse was constructed of industrial land, which is included in the State Government

by Australand/CIP in Burbridge Business Park, transferred to the Housing and Employment - Land Supply Program Report 2010

Ascot Group upon completion and occupied by Boart Longyear for development-ready land.

from June 2011. AAL arranged associated roadway and services Arrangements were also made for new fibre optic cabling to be
infrastructure to meet the new development requirements. positioned throughout the airside area of the airport by Airservices

Also within Burbridge Business Park, TNT took up occupancy in August Australia, formalised a new Site Licence Agreement. The fibre optic

2010 of a new 5500m2 office/warehousing facility adjoining Agility. cabling will service the new control tower, which commenced
construction in the Terminals Precinct during the past year,
Patawalonga Precinct
and will be completed in 2012.
Refinement of design parameters for stormwater detention facilities
were progressed with the City of West Torrens, including the terms At West Richmond, AAL acquired a residence and adjoining
of a Site Licence Agreement, to enable flood mitigation measures land that accommodates aircraft approach lighting easements,
to be put in place to service the nearby West Beach residential area. to provide future flexibility for any future changes to runway
approach lighting arrays in the vicinity.
The Mobil Petrol Station was assigned to the Shahin Group of
Companies, as part of the “On-the-Run” Convenience Stores. Parafield Airport
The Parafield Airport Master Planning process commenced in 2011
Holdfast Precinct
with significant work being undertaken in relation to surface traffic
Arrangements were concluded in October 2010 with SA Water for
access and land use planning, taking into account that the airport
the development of an Aquifer Storage Recovery water harvesting
is duly recognised in the State Government’s 30 Year Plan for
scheme along the southern side of Adelaide Airport. Following
Metropolitan Adelaide as a specialist Activity Centre, with the
receipt of a $9.7 million grant, SA Water is completing design
Commercial Estate Precinct classified as a strategic Bulky Goods Centre.
variations to optimise the stormwater network. Works will commence
following completion of its design and tender brief for the In the Central Precinct, substantial repainting and repairs were
400 mega litre system, which will primarily service Adelaide Airport. undertaken to Hangar 55 as a precursor to further upgrading later

Morphett Precinct in 2011. The building is occupied by the University of South Australia

Construction of the 18,000m2 steel fabrication complex for Manuele Aviation Academy and Gulfstream Aviation.

Engineers on its new 4.5 hectare site facing Morphett Road and The Parafield Airport Aquifer Storage and Recovery scheme
James Melrose Road was completed in April 2011. The premises have continues to extend its network of distribution pipes, enabling
state-of-the-art facilities and a striking steel facade to the offices. recycled water supply to more than 100 sites, including schools,

Airport East sporting grounds and community facilities across the City of

Refurbishment works were completed on an office/warehouse Salisbury and neighbouring council districts of Tea Tree Gully,

complex for the occupancy of DHL Express adjacent to Playford and Port Adelaide Enfield. Take-off points have

Richmond Road. These works were completed in October 2010 also been installed within the airport to permit access to this

and final occupancy was undertaken in November 2010, recycled resource for existing and future airport developments.

with subsequent enhancements also undertaken by way The Haggle Clearance Centre has opened a new retail shop in
of a new portico and landscaping. the Commercial Estate and the Big Bucket Car Wash has installed

Arrangements were concluded with Airservices Australia for a new car/truck wash facility.

handing back the former Non-Directional Beacon (NDB) located

Manuele Engineers

M anuele E ngineer S completes its ne w w arehouse and headquarters on the southern edge of the airport. Ci ty of Holdfast Bay’s New Yea r ’s Eve Fam i ly Fireworks a re made p ossible through the supp or t of Adelai de Airp or t Lim i te d.
18
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FINANCIAL PERFORMANCE

Financial Performance Report

2007 2008 2009 2010 2011
Income Statement $’000 $’000 $’000 $’000 $’000
Revenue
Aeronautical 69,570 75,431 79,209 81,862 84,157
Commercial trading revenue 23,876 27,504 28,124 30,344 31,823
Property Revenue 24,556 27,442 30,834 32,758 34,092
Other Revenue 1,393 3,515 1,676 1,678 1,989
Other Income 874 734 2,504 833 798
Total Revenue #1
120,269 134,626 142,348 147,475 152,859
Increments/(decrements) in fair value of investment properties 7,803 21,100 (10,039) 12,632 9,713
Operating Expenses (45,521) (51,465) (55,267) (55,908) (59,844)
EBITDA 82,551 104,261 77,042 104,199 102,728
EBITDA (Adj) #2
74,748 83,161 87,081 91,567 93,015
Margin 62.2% 61.8% 61.2% 61.4% 60.8%
Depreciation and amortisation (17,825) (18,015) (19,263) (17,808) (14,962)
EBIT 64,726 86,246 57,779 86,391 87,766
Borrowing Costs
Interest on senior debt, net of interest income (31,601) (32,212) (33,781) (36,374) (38,398)
Interest on Airport Notes/Dividends on RPS 28,285) (28,362) (28,284) (28,284) (28,284)
Net Profit/(Loss) Before Tax 4,840 25,672 (4,286) 21,733 21,084
Income Tax (Expense) Benefit (4,383) (10,214) 45 (6,465) (4,791)
Net Profit/(Loss) After Tax 457 15,458 (4,241) 15,268 16,293
#1 #2
Revenue presented above excludes interest revenue excludes adjustment in fair value of investment properties

Some noteworthy aspects are: • Significant progress made on major capital expenditure projects,

• Revenue, excludes interest - $152.9 million (last year $147.5 million). including the runway overlay and landside infrastructure project.

• Earnings before interest, tax, depreciation and amortisation • Successful completion of the most recent round of
and fair value adjustment of investment properties re-financing activity
- $93.0 million (last year $91.6 million) an increase of 1.6%.
Cash Flow
• Net profit before tax of $21.1 million (last year net profit
After funding interest on borrowings and dividends on RPS,
before tax of $21.7 million). Excluding the fair value
cash flow from operating activities was a positive $31.7 million
adjustment for investment properties the net profit
(last year $31.1 million).
before tax this year is $11.4 million (last year $9.1 million).
After funding capital expenditure, a net increase
• Dividends on redeemable preference shares $28.3 million
of $23.7 million resulted in cash balances at year end
(last year $28.3 million).
of $89.4 million (last year $73.1 million). Of this balance
• Increase in fair value of investment properties of $9.7 million
$12.1 million (last year $11.3 million) is quarantined in
(last year increase of $12.6 million).
a debt service reserve account.
• Credit Rating - Moody’s maintained at Baa2 / stable;
S&P maintained at BBB / stable.
Parafield - ABaSS and Tower

The General Aviation Terminal is relocated to a new site adjacent Hangar One to allow for car park construction works. AAL is proud to partner the City of West Torrens’ Summer Festival, which encourages the community to have some fun in the sun.
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F I N A N C I A L P E R F O R M A N C E C ontin u e d

Balance Sheet Interest Rate Management

Year ended 30 June 2010 2011 The Group manages its exposure to interest rate fluctuations
($million) ($million)
using interest rate swaps.
Cash 73.1 89.4
The Group has effectively fixed the interest rate on approximately
Total Assets 895.6 957.7
84% of outstanding debt (exposed to variable interest rates)
Interest Bearing Liabilities to December 2015 with approximately 40% fixed thereafter
(excl stapled securities) 526.6 559.5
to September 2016.
Total Liabilities
(excl stapled securities) 646.8 689.4 Average fixed interest rate paid was 6.3% (last year 6.5%).

Total Equity
(plus stapled securities) 248.8 268.2 Ratings
The long term finance strategy of the Group continues to be
There has been an increase in net assets resulting from: reviewed by the rating agencies, Standard and Poors and Moody’s.

• An increase in cash as outlined above The BBB / stable and Baa2 / stable ratings have been maintained.

• An increase in the fair value of Investment Property of $9.7 million Annual Report for the 12 Months to 30 June 2011
• An increase in Property, Plant and Equipment being the net The Annual Report for the 12 Months to 30 June 2011 comprising:

impact of asset additions / disposals and depreciation • director’s report

With respect to the increase in the fair value of investment • auditors independence declaration
properties, it is important to note that there are no cash flow
• financial report
implications associated with these accounting adjustments
• director’s declaration
and that investment properties are held for the full term of
the Airport Lease and are not stock held for resale. • independent auditors report to members

The Group’s total of equity and RPS (being stapled securities) stands is available on the company’s website www.adelaideairport.com.au .

at $268.2 million at the end of the year (last year $248.8 million). Alternatively a copy may be obtained from the Company Secretary.

Other Matters

Capital Structure
Issue Amount ($million) Term

Medium Term Note

($100m fixed interest) $265.0 Sep 2016

Medium Term Note

($285m floating interest) $285.0 Sep 2015

Term Bank Facility

(Floating interest $104m available at year end) $120.0 Dec 2013

Working Capital Facility

($20.0m available at year end) $20.0 Dec 2011

RPS $188.6 Jun 2014

The working capital facility expires in December 2011.

Adelaide Runway 05

Adelaide Airport’s runways and taxiways are resurfaced with enough bitumen to reseal a 4 0km stretch of highway. A A L i s a p r o u d p a r t n e r o f Ta u o n d i C o l l e g e , w h i c h s e e k s t o b a l a n c e t e a c h i n g a n d e d u c a t i o n f o r a b o r i g i n a l p e o p l e .
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PA R A F I E L D A I R P O RT

Parafield Airport

With a clear vision of improving engagement with the local gathered a full 12 months of data, which is being matched with Traditional Australian Noise Exposure Forecast (ANEF) and flight path of flight activity, mostly focussed on the high volume of training
residential community, Parafield Airport has invested in a program data records from Airservices Australia (via the control tower) lines on maps can be misleading as actual flight paths vary for many flights in the Parafield area.
of consultation through the year. and aircraft operators at Parafield. reasons, including the direction and velocity of the wind, the differing Flight training numbers are steadily increasing as world aviation
Analysis of this data will result in the best and most accurate performance of aircraft type and air traffic control management continues to recover from the effect of the global financial crisis.
All residents living in suburbs surrounding the airport received
flight activity recording at Parafield Airport 24 hours a day, requiring safe separation. However, future changes to flight training practices may see a
a copy of a community information booklet, designed to provide
details about aircraft movements, flight training practices, 7 days a week. Parafield Airport Ltd (PAL) will use this information The local community has been saying for years that they have reduction in actual flying replaced by increased simulator time.
circuit patterns and noise concern and complaint reporting. to provide better information to all stakeholders about flying experienced over-flight activity and associated noise more than the Upgrading of aviation facilities including three large hangars, and
activity, frequency and timings. ANEF and flight path lines indicate. In late 2010, a sub-committee to
In addition, Mawson Lakes now has representation on the aerodrome maintenance for taxiways and aprons, were completed
Through our cooperation with Airservices Australia, PAL has the Parafield Airport Consultative Committee - an aviation technical during the year. Other projects for development of the aerodrome
airport consultative committee through the Mawson Lakes
been able to better assess actual tracking of arrival, departure working group - was formed and commenced development of the and the building area are currently in the planning stage.
Progress Association.
and circuit in the Parafield centre. PAL will further engage the Parafield Airport Fly Friendly Policy to provide best practice guidelines
A key issue in the Federal Transport Minister’s decision not to Commercial development remains generally positive. The future
community during the Master Plan public consultation process and for operators of aircraft in the Parafield area. This includes an
approve the 2009 Master Plan was the lack of accurate statistical outlook remains very strong with a large amount of land zoned for
provide comprehensive information on aircraft movements focusing associated information package providing details and explanation
data on aircraft movements at Parafield. The Aircraft Billing development close to Adelaide’s increasing northern suburbs population.
particularly on the regular circuit movements and their variations.
and Surveillance System (ABaSS) installed in May 2010 has now

A ne w T erminal A rea R adar is commissioned by A irservices A ustralia to enhance aircraft surveillance . O u r pa r t n ers h i p w i t h t h e 2 0 1 1 Com e O u t Fest i val en co u ra ges ch i l d ren to ac t i ve ly pa r t i c i pate i n a r t s ac t i v i t i es an d event s.
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E nvironmental S ustainability

AAL’s approach to environmental management has continued

to evolve towards holistic sustainable business practice whilst
maintaining our impeccable regulatory compliance record.

As described in the company’s Sustainability Policy, our corporate

vision and ongoing success is founded on building and maintaining
the three pillars of responsible business practice - sustainable
financial, environmental and social management.

Having commenced the second year of the company’s five-year

Sustainability Plan for Adelaide Airport, AAL has demonstrated
substantial progress against its committed objectives and goals
in areas such as waste management, energy management
and sustainable development to name a few.

The past year has seen the launch of a public space recycling
scheme for Terminal 1. All waste receptacles have been modified
to accept three streams - general waste, paper/cardboard
and drink containers - with a unique design to match the
interior look and feel of the Terminal 1 building.

To communicate the recycling message, the scheme

has been accompanied by an interactive, walk-through
interpretive display in the main concourse and activity
sheets for children.

AAL’s three-year Clean Energy Partnership with the

University of Adelaide’s Centre for Energy Technology
commenced in earnest with key projects aiming
to identify energy efficiency gains through detailed
modeling and assessment of Terminal 1’s heating,
ventilation and air conditioning system.

Sustainable building principles have been incorporated into

the design of major AAL developments, namely the future
Australian Federal Police building and multi-level car park
currently under construction. Phil Baker, Professor Gus Nathan and Minister Pat Conlon

The former is slated to be a 4-star Green Star development

and the car park will showcase a number of sustainability AAL has met all legislative compliance obligations set under the Furthermore, in the past year no actions by AAL operators or lessees carried over into the 2010/11 and is being adhered to in the form
features including rooftop stormwater capture and re-use, Airports Act 1996 and Airports (Environment Protection) Regulations 1997, have resulted in Authorisations or Environmental Protection Orders of an expanded site management program. A directive handed
efficient lighting and state-of-the-art wayfaring technology monitored by the Department of Infrastructure and Transport’s Airport being issued by the AEO. A directive handed to ExxonMobil by the AEO to Tasman Aviation Enterprises in 2009/10, also in relation
to reduce vehicle circulation times. Environment Officer (AEO). in 2008/09, in relation to localised groundwater contamination, was to localised groundwater contamination, remains active.

A A L announces a 3 -year research partnership w ith the U niversity of A delaide ’s C entre for E nergy T echnology. T h e A d e l a i d e A i r p o r t Wo m e n’s P r e m i e r L e a g u e p r o m o t e s a c t i v e p a r t i c i p a t i o n i n f o o t b a l l ( s o c c e r ) i n S o u t h A u s t ra l i a .
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P E O P L E A N D CU LT U R E

Throughout 2010/11, AAL has continued to build a strong to Todd by the organisation ‘Personnel Employment’, which
learning culture, with a focus this year on expanding the reach of specialises in finding employment for people with disabilities.
learning opportunities beyond the already well established business AAL continued to partner with Tauondi College, offering Business
and leadership programs and into operational areas of the business. and IT students the opportunity to see how their learning translates
We have also focused on inclusion and sharing in order to make into work in a real workplace. AAL also assisted a Tauondi Virtual
a difference in other people’s lives, which has enhanced support Enterprise student with sponsorship, which enabled her to represent
to the wider community through staff interaction. the college at the Virtual Enterprise Trade Fair in New York.
In collaboration with the Transport and Logistics Skills Council, In the true spirit of reciprocity, Tauondi students and staff
industry specialists and national training providers, AAL has hosted a group of AAL staff at the college, allowing them to get
provided its entire Airside Safety Team with the opportunity a first-hand experience of Indigenous history and culture topped
to achieve a Certificate in Aviation - Ground Operations. off by a wonderful lunch provided by Tauondi hospitality students.
The qualification was facilitated via a combination of face-to-face We have also taken our Special Assistance Information program
and online learning coupled with practical on site assessment, a couple of steps further. We were ahead of the game in meeting
which suited the operational nature of the AAL Airside Safety the Federal Government’s expectations that airport operators
officers who participated. This approach proved highly successful have a Disability Access Facilitation Plan, which we have enhanced
and allowed AAL to ‘get the jump’ on recently released CASA through consultation with the Disability Information Resource
best practice recommendations. This initiative also highlighted Centre (DIRC) and developed a user friendly brochure which
the professionalism of the AAL Airside Safety Team in their is also available in Braille for the vision impaired. Additionally,
approach to their work and their learning. AAL will continue we have laid the foundations for an Assistance Animal relief
to build and broaden its offerings to meet the needs station in close proximity to our main terminal T1.
of the business and its staff across all departments.
Staff activities, where they volunteer for community service,
Also during the year, a section of our staff volunteered their time continue to be a high priority and we were particularly
to work within the community and nominated to become involve impressed with our terminal ambassadors and the goodwill
in the Salvation Army’s K-Mart Wishing Tree Appeal program. they share, and to our ‘bikie’ staff who participated in the
They ‘pulled up their sleeves’ and assisted with the unwrapping Christmas Toy Run through the Adelaide Hills.
and sorting of many thousands of gifts donated to help families
in need. This community service was a most enlightening,
fulfilling and rewarding experience for those who participated,
and one which left them with great sense of achievement.

AAL also became involved in the ‘Employ Ability’ program,

which has enhanced our existing positive and inclusive team culture.
This program involved the support of an individual with a disability
to be part of the community by way of employment in the
mainstream workforce. We were fortunate enough to appoint
a new employee to our team, Todd Brine, Office Assistant.
Todd assists the Administrative and Finance team on a part
time basis in the Management Centre. We were introduced
T1 Ambassador - Trevor

Adelaide Airport’s annual emergency field exercise is held in May to test its command, control and communication procedures. The Leaders Institute of SA and its Governor’s Leadership Foundation, sponsored by AAL, helps to support our next generation of leaders.
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CO M M U N I CAT I O N / CO M M U N I T Y

Major Benefactor - RFDS

Adelaide Airport is South Australia’s major gateway, located The primary stakeholders for AAL include Federal, State and As a company, AAL builds enduring and mutually beneficial consultation and guidelines for development of master plans, which
between the City and the sea, and as such plays an important local governments, airport users (customers), on-airport relationships with all stakeholders so that our actions and have directly reflected the practices of AAL over the past 13 years.
role in creating visitors’ early impressions of our State. tenants (including retailers), airlines and investors. Each of these wider commitments to the community reflect our values. In addition to communications with primary stakeholders, domestic
stakeholders is critical to the successful operation of the airport.
AAL builds enduring relationships with its key stakeholders, During the year under review, AAL has been encouraged and overseas publications are used appropriately to promote key
maintaining an active and open communication platform with Other stakeholders include nearby residents, exporters and by the fact its consultative and communications programs company initiatives across all areas of the business. These initiatives
the relevant tourism, trade and government authorities to importers, tourism operators, business and employer groups, have proven to be effective and have set new benchmarks. range from planning and development through to environmental
enhance the State’s profile both interstate and overseas, which and the wider community. This has been evidenced by documents recently released sustainability and community engagement.
in turn creates additional business opportunities for the airport. by the Federal Government as guidelines on community

One of AAL’s favoured charities, the Royal Flying Doctor Service, purchases a new medically-equipped Pilatus PC-12 aircraft. A s p a r t o f i t s s u p p o r t o f t h e l o c a l c o m m u n i t y, A A L a ss i s t s N e t le y Ki n d e r g a r t e n by f u n d i n g a n e w a i r- c o n d i t i o n i n g u n i t .
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C O M M U N I C A T I O N / C O M M U N I T Y C ontin u e d

We have been particularly pleased with the outcomes of our The company limits media comment to the Managing Director
consultation and awareness program relating to the runway and General Manager, Corporate Affairs, who are supported
and taxiway overlay project, which was communicated through by public relations firm, Hughes Public Relations. Ultimate
the following forums and media: responsibility for media relations rests with the Managing Director.

• Formal presentations to the Western Adelaide Consultative Group Throughout the year, AAL has continued to build its partnership with
- comprising the Mayors and CEOs of the surrounding five councils; the community through its three pillars of focus. These pillars are:

• Formal presentation to the Adelaide Airport Consultative • Community and specifically opportunities afforded to encourage
Committee and Airport Planning Sub Group Committee participation and engagement in sport and cultural development;
(Including DoIT representation); • Business and Tourism - building the State’s platform
• Regular media releases to the Messenger Press for a prosperous economy that is outward thinking; and
- covering all residences in the affected suburbs; • Environmental Sustainability through the manner in which
• Formal presentation to the City of West Torrens elected we value and support the community we operate in, particularly
members and Senior Executive at a Council meeting; sustainability initiatives and the people who make them happen.

• Formal letters of explanation and offer to provide explanatory

presentation to the Cities of Holdfast Bay, Unley, Mitcham,
West Torrens and Charles Sturt;

• Public awareness meeting chaired by Mayor John Trainer

and supported by AAL Executive in September 2010;

• Openly available for talk back radio discussions;

• AAL’s website; and

• AAL’s Plane Talking newsletter.

The communications program was maintained throughout the

six and a half months of the project and was rewarded with
a letter of commendation from the Netley Residents Group.
In addition, the project itself has been nominated and won
several awards for excellence.

Another initiative introduced during the year has been

a comprehensive social media monitoring and activity program.
This has proven to be particularly useful in dispelling incorrect
messages during the volcanic ash disturbances.

AAL maintains a disciplined media policy designed to determine

the way in which it communicates with the news media and,
through the media, the broader community.

Riddoch Library - Junior Art Sponsorship

A A L exhibits at D isability & Ageing E xpos around the S tate to promote its disability services and information . Mt Gambier’s Take a Flight Into Art, a community program sponsored by AAL, gives 5 to 10 year olds the chance to encourage their artistic talents.
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CO R P O R AT E G O V E R N A N C E

AAL and the Board are committed to achieving and demonstrating Board responsibilities Directors independence Commitment
the highest standards of corporate governance. The responsibilities of the Board include: Directors are appointed by the Board (or by the shareholders The Shareholders Agreement requires that the Board

The relationship between the Board and senior management in general meeting if so required by the shareholders) meets at least once in each quarter of the financial year.
• Providing strategic guidance to the company including
is critical to the Group’s long term success. The Directors are in accordance with the Shareholders Agreement by nomination
contributing to the development of and approving the The current practice is to hold a minimum of 10 meetings per annum.
responsible for the performance of the company in both the short of the shareholders, and provision has been made in that
corporate strategy
The number of meetings of the company’s Board of Directors
and the longer term and seek to balance sometimes competing agreement for the Directors to appoint a Chairman who
• Reviewing and approving business plans, the annual budget and of each Board committee held during each financial year
objectives in the best interests of the Group as a whole. is not one of their number who would as a consequence
and financial plans including available resources and major and the number of meetings attended by each Director are set
Their focus is to enhance the interests of shareholders and other of that appointment become and be a Director. The Board
capital expenditure initiatives within the financial limits out in the Directors’ report under the heading “Directors’ Meetings”
key stakeholders and to ensure the Group is properly managed. has opted to appoint a chairman with effect 30 June 2004
set in the Shareholders Agreement in the annual statutory accounts for the Group.
who is independent from the shareholders of the Company.
Day to day management of the Group’s affairs and the • Overseeing and monitoring:
Conflicts of Interests
implementation of the corporate strategy and policy initiatives Non-executive Directors
- Organisational performance and the achievement
The Directors shall comply with all of their obligations either at
are formally delegated by the Board to the Managing Director The non-executive Directors are able to meet in scheduled
of the Group’s strategic goals and objectives
law or under the Corporations Act in relation to potential or actual
and senior executives as set out in the Group’s delegations policy. sessions without the presence of management, to discuss
- Compliance with the company’s Code of Conduct conflicts of interest provided always that the other Directors
These delegations are reviewed on an annual basis. the operation of the Board and a range of matters. Relevant matters
- Progress of major capital expenditures and other significant (i.e. who do not have a conflict or material interest in the matter)
A description of the company’s main corporate governance arising from these meetings are to be shared with the full Board.
corporate projects including any acquisitions or divestments shall be at liberty, subject to proper disclosure having been made,
practices is set out below. All these practices, unless
• Monitoring financial performance including approval Term of office to resolve to permit the Director with the potential or actual conflict
otherwise stated, were in place for the entire year.
of the annual and half-year financial reports and liaison Nominee Directors hold office at the discretion of the appointing of interest to participate in discussions and voting on the matter

Board composition with the company’s auditors shareholder. Other Directors are appointed on a term of three years. giving rise to the conflict. In general terms the Directors shall

In accordance with the Shareholders Agreement the Board deal with each matter of conflict on its merits.
• Appointment, performance assessment and, if necessary, It is recognised that lengthy service on the Board may impact on
comprises a minimum of 4 and a maximum of 9 Directors removal of the Managing Director a Director’s independence and therefore non-nominee Directors
Independent Professional Advice
(inclusive of the Managing Director). must retire from office no later than completion of four terms
• Ensuring there are effective management processes in place The Directors, both individually or as a group, in furtherance of
Each shareholder holding not less than 15% of the issued of office (12 years).
and approving major corporate initiatives their duties, may seek and obtain independent legal and professional
shares of the company is entitled to nominate one or more advice from external sources at the expense of the Company.
• Enhancing and protecting the reputation of the organisation Chairman
Directors depending on the total proportion of shares held Prior to seeking such advice Directors will seek the approval
• Overseeing the operation of the Group’s system for compliance The Chairman is responsible for leading the Board, ensuring
to the shares on issue. of the Chair, such approval not to be unreasonably withheld.
and risk management reporting to shareholders. Directors are properly briefed in all matters relevant to their role
The Directors may appoint one of their number as Chairman Each Director has the right of access to all relevant Company
and responsibilities, facilitating Board discussions and managing
or an independent Chairman who would become a Director Board members information. A Director also has the right to have access to all
the Board’s relationship with the company’s senior executives.
if so appointed. The Chairman is required to meet regularly Details of members of the Board, their experience, expertise, documents which have been presented to meetings of the Board

qualifications, term of office and independent status are set out in

Managing Director whilst in office, or made available in relation to their position
with the Managing Director.
The Managing Director is responsible for implementing Group as Director after ceasing to be a Director.
the Directors’ report under the heading “Information on Directors”.
The Board has the right to appoint Directors under the
strategies and policies.
There are six non-executive Directors, one executive Director
Company’s Constitution.
and one alternate non-executive Director.
The Board is required to undertake an annual Board performance
review and consider the appropriate mix of skills required by the
Board to maximise its effectiveness and its contribution to the Group.

A delaide A irport Ltd hosts the 2 0 1 0 A ustralian A irports A ssociation C onvention and T echnical Wor k shop. AAL s upp or ts th e Salis b ur y Amateur Ath let ics Club , w h ich aim s to encourage a h ealth ier li festyle i n nor t hern communi t i es.
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C O R P O R A T E G O V E R N A N C E C ontin u e d

Performance Assessment Minutes of committee meetings once signed by the Chair of the Detailed control procedures cover management accounting, Diversity
The Board undertakes an annual assessment of its collective committee are tabled at the immediately subsequent Board meeting. financial reporting, project appraisal, Health, Safety and The Board attaches great importance to diversity, the corporate
performance, the performance of the Chairman and of its committees. Details of the meetings of committees and attendance of committee Environment, IT security, compliance and other risk management benefits arising from diversity and the importance of benefiting

members are set out in the Directors’ report under the heading issues. Internal audit carries out regular systematic monitoring from all available talent.
The Chairman undertakes an annual assessment of the performance
“Directors’ Meetings” in the annual statutory accounts for the Group. of control activities and reports to both the relevant business unit
of individual Directors and meets privately with each Director
Code of Conduct
and the Audit and Compliance Committee.
to discuss his assessment.
External Auditors The Board is committed to the continuing development of
In addition each business unit reports on the key business risks
A review of the Board’s performance was undertaken during the The company and audit and compliance committee policy is to the code of conduct for the guidance of Directors, officers
in its area to the Risk Management Group. The basis for this report
reporting period in accordance with the process set out above. appoint external auditors who clearly demonstrate quality and and other key executives. The code is to be regularly reviewed
is an annual review of the past performance of their area of
independence. The performance of the external auditor is reviewed and updated as necessary to ensure that it reflects the highest
Corporate Reporting responsibility, and the current and future risks they face.
annually and applications for tender of external audit services standards of behaviour and professionalism and the practices
The Managing Director and CFO have made the following Results of internal audit work are incorporated into
are requested as deemed appropriate, taking into consideration necessary to maintain confidence in the Group’s integrity.
certifications to the Board: this review if applicable.
assessment of performance, existing value and tender costs.
• That the company’s financial reports are complete and present Shareholder communication
The Board reviews each element of corporate strategy
It is a requirement that the external auditor ensure that the All shareholders receive a copy of the company’s annual and
a true and fair view, in all material respects, of the financial over the course of the year according to the Board’s cycle
lead engagement partner is rotated at least every five years. half-yearly reports. In addition those reports are accompanied
condition and operational results of the company and Group of business. The Board reviews the Group’s strategic direction
and are in accordance with the relevant accounting standards. The external auditor is expected to attend the annual general by a detailed report on the performance of the Group and
in detail and includes specific focus on the identification
meeting and be available to answer shareholder questions other material issues prepared by the Managing Director.
• That the above statement is founded on a sound system of risk of the key business and financial risks which could prevent
about the conduct of the audit and the preparation and content Detailed briefings and site tours are available to shareholders
management and internal compliance and control and which the company from achieving its objectives. The Risk Management
of the audit report. attending the AGM.
implements the policies adopted by the Board and that the Group is required to ensure that appropriate controls are in place

company’s risk management and internal compliance and control to effectively manage those risks.
Risk assessment and management
is operating efficiently and effectively in all material respects. In addition the Board requires that each major proposal submitted
The Board through the audit and compliance committee is
responsible for ensuring there are adequate policies in relation to the Board for decision is accompanied by a comprehensive risk
Board Committees
to risk management, compliance and internal control systems. assessment and, where required, management’s proposed
The Board has established a number of committees to
In summary, the company policies are designed to ensure strategic, mitigation strategies.
assist in the execution of its duties and to allow detailed
consideration of complex issues. Current committees of operational, legal, reputation and financial risks

the Board are the remuneration, audit and compliance, are identified, assessed, effectively managed and monitored

property development and aeronautical and related to enable achievement of the Group’s business objectives.

infrastructure development committees. The committee Considerable importance is placed on maintaining a strong control
structure and membership is reviewed on an annual basis. environment. There is an organisation structure with clearly drawn
A policy of rotation of committee members applies. lines of accountability and delegation of authority. Adherence to

Each committee has its own written charter setting out its role the company Code of Conduct is required at all times and the Board

and responsibilities, composition and structure, membership actively promotes a culture of quality and integrity.

requirements and the manner in which the committee is to operate. The company risk management policy and the operation
All of these charters are reviewed on an annual basis. All matters of the risk management and compliance system are managed
determined by committees are submitted to the full Board by a risk management group comprising senior executives.
as recommendations for Board decision. The Board receives regular reports from this group.

F og in other capital cities leads to several domestic and international flights being diverted to A delaide . A s a p a r t n e r o f T h e S m i t h Fa m i l y, A d e l a i d e A i r p o r t L i m i t e d i s h e l p i n g d i s a d va n t a g e d c h i l d r e n a c r o s s S o u t h A u s t ra l i a .
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A D E L A I D E A I R P O R T L I M I T E D A N N U A L R E P O RT 2 0 1 0 - 2 0 1 1

THE FUTURE

BJS
ICN
NRT
LAX
PVG
AUH DEL
CAN
DOH DXB HKG
BOM
BKK MNL
SGN
HKT

KUL
SIN

CGK DPS

SYD
MEL AKL
ADL
CHC
Existing 0-2 years potential 3-5 years potential

Projected New Routes

In AAL’s first 13 years of operation, total passenger numbers In preparing for this growth, AAL is bringing to fruition significant Airservices Australia is well advanced with the construction of a new is adding support to our future construction and development programs.
have exceeded all expectations and there is every indication that, landside infrastructure to maintain its service level to the travelling Control Tower, and following some “shadowing/ghosting” operations The Tour Down Under, Festival of Arts, Fringe Festival, Womadelaide
despite man-made and natural impediments, this growth will public, building in access and egress redundancy and improving and technical fit-out, it will be operational in early 2012. The new and many other world class events also add to the demand for
continue into the future. safety and security for ‘front of house’ activities. terminal area RADAR has been completed and commissioned, efficient, state-of-the-art airport facilities.
Commencing in 2010/11 and to be completed in 2012, this project will improving access to Adelaide Airport.
We are confident that with the projects identified below, together We are actively encouraging the take up of the Federal Government
with our sustainability and infrastructure planning, we will meet facilitate a proposed expansion of T1’s northern and southern aprons, South Australia’s unprecedented resources growth has the propensity Enhanced Regional Assistance Package that enables international
the future challenges of operating one of Australia’s major airports along with significant internal modifications including relocating to quickly absorb all available labour over the next few years. carriers virtual open skies to regional ports such as Adelaide.
in a safe, secure and efficient manner. office accommodation to enhance the international baggage reclaim,
As evidenced above, Adelaide Airport is planning for this future So far the package has not been well known or supported, but
expansion of the International Concourse and Customs Hall,
The acceptance of low-cost carriers (LCC), the opening of new growth, which we anticipate will not only come from interstate our participation in an international research and communication
and providing space for advanced screening technologies.
route pairs, the changing market share and mode of operation or domestic services but international fly-in fly-out services as well. project should see some success through an increase in international
of a previous LCC, together with the acceptance of these changes While interest in the construction of an international standard carriers and services over the next few years.
South Australia also continues to hit above its weight in attracting
by the general public shows that aviation is the transport medium hotel has not materialised due in part to the Global Financial Crisis
international students to its tertiary institutions and also the flight AAL monitors these demands and is planning for the future.
of the “now” society. (GFC), the concept and approval process is still current.
training facilities at Parafield Airport. This is another growth area that

A irservices A ustralia begins construction of its ne w state - of - the - art air traffic control to w er . AAL has assisted Surf Life Saving SA with its purchase of new Inf latable Rescue Boats (I RBs) to pat rol met rop olitan beaches.
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A D E L A I D E A I R P O R T L I M I T E D A N N U A L R E P O RT 2 0 1 0 - 2 0 1 1

A w ards

Adelaide Airport - Night Skyline

Australian Airports Association Urban Development Institute of Australia, SA Division ASI Steel Awards - SA 2006 Defence Reserves Support Council
Award for Aviation Excellence 2006 Natural Gas & Envestra Award for Excellence Architectural Steel Design Award Employer of the Year 2009
Australian Capital City Airport of the Year - 2006 & 2009 President’s Award - Infrastructure Development
Property Council of Australia Awards 2011 Project Management Achievement Award
2006 Airports Council International Airport Service Quality Awards The Chartered Institute of Logistics of Transport • Property Investment Award - Emerging Assets 2007 Construction/Engineering less than $100 million
Runner Up – 5-15 million passengers 2006 South Australian Achiever of the Year - Phil Baker • Excellence in Retail Marketing Awards AAL/BECA for Adelaide Airport Runway
- Centres under 10,000m 2
and Taxiway Overlay Project
The Chartered Institute of Logistics & Transport 23rd National Print Awards Winner 2006, 2007, 2008, 2009, 2010
South Australian Achievement of the Year 2006 Book Printing 4 colours or more • Environmental Excellence Award - 2009 Annual Hungry Jack’s National Awards
“From Tin Shed to Glass Showcase” • Presentation Commendation 2010 Store of the Year 2011

A delaide Airport exhibits at the A F TA T ravel Fair to promote its non - stop international flights and new car par k . AAL is keen to assist local government initiatives, such as through events like the Cleve Lower Eyre Peninsula Local Government Conference.
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