Auckland Airport stands firm on redevelopment

The aviation hub said its redevelopment "is in the country's best interests" despite protests from the Kiwi flag carrier, Janie Medbury reports.

AIR New Zealand has called for an urgent inquiry into the regulation of Auckland Airport, which it says is “failing to constrain overspending” on a 10-year redevelopment plan that will “make flying unaffordable”.

“The new airport will look great, but this spend doesn’t deliver an additional runway and there will be virtually no increase in airside capacity for more customers,” Air New Zealand Chief Executive Greg Foran said, upon lodging an official request with Commerce Minister Andrew Bayly.

“By 2032 the value of the airport’s asset base, which dictates the size of its charges, will have increased per-passenger domestic charges five times, with more to come in the future. Air New Zealand agrees the airport needs redevelopment, but not at a cost that means some Kiwis can’t afford to fly.

“Last year with the help of the same international experts that worked on AIAL’s 30-year Master Plan, we provided the airport with alternative terminal designs that would be significantly cheaper, while still providing a great facility. We also shared data on the serious impact their spending will have on demand for air travel. They have not paused and plan to keep pouring concrete,” he added.

“Auckland Airport will argue that it consulted with Air New Zealand, but it has ignored our warnings and there has been no meaningful change. It has received the same feedback from Qantas Group and BARNZ that this is not affordable and will cost the traveling public. The business case has been seriously questioned by IATA.”

Foran concludes by asking the Commission to “launch an inquiry to determine which regulatory option is best for consumers”.

In response to the airline’s calls, Auckland Airport has issued a statement on the ASX saying that while it welcomes the additional oversight, it will continue to build the “resilient, fit-for-purpose” airport.

“Air New Zealand has strong commercial incentives to opposite airport investment, both to protect its profit margin and its dominant domestic market position,” the airport stated, adding that “the alternative terminal being promoted by Air New Zealand is theoretical and is missing core elements of an operating airport”.

The aviation hub also highlighted that its domestic charges have been 40-50% lower than other airports for many years, while Air New Zealand has “hiked its average domestic and regional airfares by up to 55% or $70 a fare following the pandemic”.

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