Economics for Sustainable Development | Report

Running head: ECONOMICS FOR SUSTAINABLE DEVELOPMENT
Economics for Sustainable Development
Name of the Student
Name of the University
Author Note

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Executive Summary
The paper is aimed at discussing the role of Auckland International Airport Authority in the
economy of New Zealand. The paper has elaborated the macroeconomic aspects including the
unemployment rate, inflation rate, exchange rate and interest rate on the business growth of the
company. Further the paper has attained to analyze the company’s financial report as to link with
the current economic conditions.

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Table of Contents
Introduction......................................................................................................................................4
a. Location of business, types of business..................................................................................4
b. Business produces or sells......................................................................................................4
c. Main customers.......................................................................................................................5
d. Most of the customers located from which places.................................................................6
e. Main competitors of the company..........................................................................................7
f. Location of the competitors of Auckland Airport Authority..................................................7
g. Market share of key indicators...............................................................................................8
Production costs and scale...............................................................................................................9
a. Fixed cost................................................................................................................................9
b. Variable cost............................................................................................................................9
Macro business environment....................................................................................................10
a. Overall stability of the political system.................................................................................10
b. Inflation, unemployment and average interest rate............................................................11
c. Exchange rate.......................................................................................................................13
d. Type of products whether normal or inferior......................................................................14
e. Possible challenges in skills shortage, operating cost.........................................................14
f. Export and import trends of the company............................................................................14
Sustainability practice of the business...........................................................................................14

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a. Positive or negative externalities of the production process...............................................14
b. Positive or negative externalities of the consumption process............................................14
Conclusion.....................................................................................................................................14
Reference list.................................................................................................................................15

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Introduction
Auckland Airport is situated near Auckland City Centre in New Zealand. Since 1988, the
company has been operating under the Airport serviced. It is the country’s largest as well as
busiest airport. It is the important hub of Air New Zealand, Virgin Australia and Jetstar Airways.
More than twenty-one million of domestic and international passengers access this airport in
every year. The airport is competent of handling of Airbus and Boeing aircraft. Around 50 flights
move per hour employing a single highway of this airport. The company provides services for
the aircraft movements, passengers as well as cargo. Moreover, the company offers utility
services to other aircraft companies. The airport is situated at the transition point of the
residential suburb, service hub suburb and international hub (Koç & Durmaz, 2015). It covers the
south of the Auckland city centre. Hence, a large number of domestic passengers including from
the urban and suburb areas are considered as the pillar of its gigantic success in New Zealand.
a. Location of business, types of business
It is a public listed company owned by the government of New Zealand. The company
operates under the sector of Airports and Air services. The main revenue source of Auckland
Airport is aeronautical system and non-aeronautical operations, like, transport, retail, property
and road. More than 700 employees work under this company (Lorrey et al., 2014). The airport
authority is listed on both New Zealand Stock Exchange and Australian Securities Exchange in
the name of AIA. This limited company delivers facilities to the Auckland Airport. Moreover, it
provides different operations including flight service, airfield facilities, strata lounge and online
shopping facilities. In addition to that, the airport authority has also extended its business to the
hotel industry. Novotel hotel is the company’s paid partnership with AAPC Properties and
Tainui Group Holdings Limited.

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b. Business produces or sells
Auckland International Airport Limited operates across three different segments
including Aeronautical, Property and Retail. It leases property for the use of terminals under the
segment of the aeronautical service. In terms of the retail service, the airport authority offers car
parking accommodations to the passengers, airport staff and visitors. This retail service charges
relatively less amount in comparison with the average market price. Lastly, the property segment
rents cargo buildings, detached investment assets and hangars. Apart from that, the company
holds share in the hotel industry Cairns Airport as well as in the Mackay Airport in Australia.
This diversified business strategy is considered as the main source of the company’s colossal size
of revenue (Kean 2016). The company has secured the 7th rank as per as the score of the
corporate governance. The sales growth of the company is reported at 8.10% in 2019, whereas, it
is expected to be declined by 6.60% in the nest year.
c. Main customers
According to the statistics, domestic citizens hailed from Auckland and international
citizens from Australia and USA. Major portion of the customers are related to the business
people and young people who travel for leisure purpose. The available travel services are
comprised of different types of airport facilities. The airport attains a number of arriving and
departing passengers per hour (Forsyth, 2017). The passengers from the USA and Qantas
normally take short term flights from this airport. The numbers of domestic passengers have
been surged up by 4% as compared to the last year, whereas, the numbers of international
travellers are enhanced by 3% in 2019 with respect to the year of 2018. Apart from the normal
customers, the number of business traveler has also been amplified. The comfort driven by the
air travel is most comprehensive and hassle free compared to all other public transports