Kelsian charts course for New Zealand with Auckland ferry win

About Kelsian Group Limited

Kelsian Group Limited (ASX: KLS) is a leading global operator of bus, motorcoach and marine services, trusted by governments and private clients to deliver safe, reliable and sustainable passenger transport solutions across complex urban and regional networks. Headquartered in Adelaide, South Australia, Kelsian has more than 35 years of experience connecting people and places across Australia, the United Kingdom, Singapore, the United States and the Channel Islands. The company’s portfolio of businesses includes Transit Systems, one of Australia’s largest public bus operators; All Aboard America! Holdings, the second-largest motorcoach operator in the United States; Tower Transit, which operates bus franchises in the United Kingdom and Singapore; and SeaLink Marine and Tourism, which provides ferry services connecting commuters, tourists and regional communities around Australia. As at 31 December 2025, Kelsian employs more than 12,900 people, operates 6,115 buses and 126 vessels, and delivered more than 384 million customer journeys over the preceding year.

The Auckland ferry contracts

Following a competitive tender process, Kelsian’s SeaLink Marine and Tourism division and Belaire Ferries submitted a joint bid in response to Auckland Transport’s request for proposals for the Western Package Ferry Contracts. The contracts, which were awarded on 1 July 2026, cover the provision of passenger ferry services and associated vessel maintenance services between downtown Auckland and several locations on Auckland Harbour, with operations scheduled to commence on 1 July 2027.

The initial fleet will comprise six vessels, including four currently owned by Belaire Ferries and two existing Kelsian vessels to be relocated from Australia to Auckland ahead of service commencement. To replace the two vessels being transferred to New Zealand, Kelsian will procure a new passenger ferry for its South-East Queensland marine operations. As part of its contract commitments, Kelsian has undertaken to procure five new ferries over the contract term to replace the initial fleet, with the first new vessel expected to enter service in mid-2028 and subsequent vessels to follow between 2029 and 2032. The total estimated capital cost of the five new vessels is NZ$38 million (A$31 million), with Kelsian expecting this to be funded through a limited recourse ringfenced special purpose vehicle. The contracts include revenue indexation mechanisms that protect Kelsian from fluctuations in the cost of key inputs, including diesel fuel, providing meaningful downside protection over the life of the arrangement.

The Belaire Ferries acquisition

Alongside the contract award, Kelsian has entered into a binding agreement through its wholly owned subsidiary Kelsian Marine NZ Ltd to acquire 100 per cent of the shares of Belaire Ferries for a total purchase price of NZ$8.9 million (A$7.3 million). The consideration comprises an upfront cash payment of NZ$2.8 million (A$2.3 million) and total deferred and contingent consideration currently estimated at NZ$6.1 million (A$5.0 million), payable during FY2027 to FY2029 subject to the satisfaction of certain milestone conditions. The acquisition will be funded from existing cash reserves.

Belaire Ferries is an established Auckland-based ferry operator that currently operates the West Harbour and Rakino Island ferry services on Auckland Harbour, routes that sit at the core of the newly awarded Western Package Ferry Contracts. The founder of Belaire Ferries, Adam Tallentire, will assist Kelsian with the integration and the transition to the new contracts, providing operational continuity and local market expertise during a critical period.

Strategic significance

The Auckland contract win and Belaire Ferries acquisition are significant for Kelsian for several reasons beyond their immediate financial contribution. New Zealand represents a new geography for the group, and the Western Package Ferry Contracts establish a foothold in a market where Kelsian believes further public transport opportunities exist. The structure of the transaction, combining a contract win with the acquisition of the incumbent operator, is consistent with Kelsian’s established approach to entering new markets, having previously used similar strategies to build its positions in the United Kingdom, Singapore and the United States.

The revenue indexation mechanisms embedded in the contracts reflect Kelsian’s disciplined approach to contract risk management, ensuring that movements in fuel and other key cost inputs do not erode margins over the seven-year initial term. The use of a ringfenced special purpose vehicle to fund the new vessel procurement further demonstrates the group’s focus on capital efficiency and balance sheet discipline.

Conclusion

The Auckland ferry contract award and Belaire Ferries acquisition mark a meaningful step in Kelsian’s ongoing international expansion. With services commencing 1 July 2027, a seven-year contract term with an extension option, revenue indexation protection and a clear pathway to fleet renewal, the New Zealand platform is well structured for long-term value creation. The near-term focus will be on completing the Belaire Ferries acquisition in the first quarter of FY27, transferring vessels from Australia, integrating the Belaire operations and progressing procurement of the five new ferries that will underpin the contract over its full term.