Story by ANDREW KACIMAIWAI
AT a time when Qantas has just gone head to head with Air New Zealand on the NZ-US route, Auckland Airport managed to unite them in common purpose.
Qantas and Air New Zealand, the two largest customers of Auckland International Airport (AIA), have joined forces to oppose the scale and cost of Auckland Airport’s redevelopment. They want an urgent rethink of the project.
In March, AIA said it would spend NZ$3.9 billion on the initial phase of an airport redevelopment to run over 5-6 years; the cost of that redevelopment will be paid for by airport users.
Both airlines said the cost would result in fare increases by both airlines (and Qantas subsidiary Jetstar) to the point of unaffordability for most travellers.
The two airlines said they had provided AIA with details of their network impact, including independent economic analysis.
In a market disclosure, Auckland Airport published its increased aeronautical charges: passenger charges will roughly double on international routes by the end of a five-year pricing period (FY27) and more than double on domestic routes.
The airlines also said that given AIA’s intention to spend billions more, there will have to be further significant increases to follow in the next pricing period but which AIA remains silent on.
Both airlines want Auckland Airport to:
• pause their redevelopment work while an affordable plan is developed, either through a lower cost or a more workable funding and pricing model;
• invest some of the profits AIA earns from other services like parking and retail to pay for some of the projects; and
• prioritise efforts to ensure travellers can keep flying.
“We all agree that some investment in Auckland Airport is necessary,” says Air New Zealand Chief Executive Greg Foran.
“However, this is an enormous spend over a short period of time that adds almost no additional capacity. All it is expected to result in is more costs for everyone who uses, relies on, or passes through the airport, including the aviation industry, the tourism industry, the whole economy, and Air New Zealand’s passengers.”
His Qantas counterpart, Alan Joyce, who described the two airlines as “frenemies”, agreed.
“Airlines accept that investment is needed but what AIA is proposing goes far beyond what is needed or affordable,” he said.
“Based on Qantas’ experience, the necessary first phase of this redevelopment could be delivered for significantly less than $3.9 billion, and we’re conscious that the final number will probably be higher, with cost overruns common to most large infrastructure projects.”
Mr Joyce was passing through Auckland as a passenger on his airline’s inaugural Sydney-Auckland-New York service. (Click here for the story.)
The Australian airline also intends to upgrade its international visitors lounge at Auckland Airport.
Both airlines expect to reach 100% pre-Covid capacity by March 2024 with current levels around 85%; overseas airlines are reporting similar capacity restoration and greater such as United Airlines, which intends to boost its presence in New Zealand by 70% with a new direct San Francisco-Christchurch service later this year.
Industry analysis shows the longer-term pricing outlook for airfares is downwards as capacity constraints ease globally. However, cost pressures for the airline industry are increasing, limiting how far airfares can fall.
Tasman Aircraft 