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Newcastle Airport has hit back against media reports that it is in financial trouble.
Reporting in the Newcastle Herald this week claimed that cost overruns on the new international terminal, as well as a drop in passenger volumes and unbudgeted costs for the Astra Aerolab defence and aerospace precinct, have left the airport short of cash.
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The Herald pointed to figures claiming that the terminal, which was budgeted for $110 million, will instead cost $157 million, while Astra Aerolab’s Kongsberg and Lockheed Martin factories are facing $1.7 million in “unbudgeted planning costs” and the precinct itself has spent $5.9 million on “subdivision costs”.
“In preparing the FY 2024/25 budget, it was identified that there is a capital scarcity in the business due to increasing costs of capital projects coinciding with declining passenger forecasts on the withdrawal of Bonza and reforecast of existing routes,” read one document cited by the newspaper.
As reported by the newspaper, Newcastle Airport’s internal policies require a minimum of $15 million in cash reserves to ensure it can continue to make ongoing payments.
The Herald quoted a solvency resolution passed at last week’s board meeting saying the airport’s analysts “demonstrates that there is insufficient funding headroom for further unbudgeted funding approvals during FY2024/25 without specifically identifying a source of funding or cost savings, and that if funding is not identified or achieved there is reasonable probability that the cash reserves of the business will fall below the $15 million working capital policy limit”.
However, airport CEO Dr Peter Cock has denied the reports, saying in a statement that Newcastle Airport “adheres to best practice guidelines” and claiming there were “factual misrepresentations in the article around the Airport’s structure and decision making”.
“As part of fair and accurate reporting, it is extremely concerning that, at no stage, was Newcastle Airport contacted to verify or provide context to information incorrectly reported on,” Cock said.
“Misrepresenting an internal, confidential board paper does not accurately reflect the financial health of Newcastle Airport. We stringently report on potential risks, but our financial status remains robust, with a healthy working capital.
“Newcastle Airport is undergoing a once-in-a-generation terminal expansion with doors to open 1 August 2025. Cost and supply chain challenges have been felt globally and are not unique to Newcastle Airport. Each month our management team reviews and prepares a financial forecast across the business, which is then analysed by our experienced Board of Directors.
“Our Board resolved that the company remain solvent which is consistent with management recommendations.”
According to Newcastle Airport’s chair, Jude Munro, the airport’s “commitment to good governance and ongoing risk management analysis has been misrepresented, leading to inaccurate reports about our financial status”.
“Our Board of Directors, known for their experience and expertise, passed a resolution and directed the Airport leadership team for prudent management to maintain cash reserves. This decision aligns with our best practice standards as a skills-based and risk-averse Board,” Munro said.
“During times of extraordinary company growth, it is normal, prudent and standard business practice to prioritise company expenditures. Our Board of Directors and Airport leadership team are aligned and have been working closely together with full financial transparency.
“I stand firmly behind the qualifications and recommendations of our Board and I cannot stand by and allow their integrity to be questioned.”
The airport earlier this month held a ceremony to mark the placement of the new terminal’s final roof beam.
