September 17th, 2024
Auckland Airport has announced its largest redevelopment since its inception in 1966, with plans to replace the 57-year-old domestic terminal and integrate it with the international terminal. The multi-billion-dollar project is expected to create 2,000 additional jobs during the construction phase and aims to make the airport more resilient and sustainable in line with climate change goals, according to a media release by the Auckland Airport.
The new domestic terminal will be housed under the same roof as the international terminal, with the two facilities connected for the first time since 1977. The airport has been in consultation with major airline customers since May 2011, developing 21 concept designs for the integrated terminal.
The project, which is part of the airport's wider 10-year capital program, has a construction budget of approximately $3.9 billion and is expected to be completed in five to six years. The new terminal will be equipped with state-of-the-art facilities, faster baggage systems, improved passenger processing areas, and better connections to public transport.
Project highlights
The $3.9 billion terminal integration program includes a domestic processor ($2.2 billion) and other key terminal integration projects associated with the development ($1.7 billion), factoring in forecast construction cost escalation and holding costs.
Building program costs have been benchmarked and aligned with other major airport brownfield developments.
12 new domestic aircraft gates (20% more than the current domestic terminal) with electric charging, all catering for the more efficient and larger (passenger capacity) domestic jets airlines are investing in.
Five-minute, indoor domestic to international transfer journey.
Additional dwell and retail space.
State-of-the-art check-in area.
Smart baggage system, using 50% less power to process each bag than a conventional conveyor-based system.
Employing 2,000 additional workers at the height of construction.
Fast easy transport connection, with a $300 million Transport Hub under construction. Land adjoining the Transport Hub has been set aside for a future integrated mass transit station.
Airport charges
Domestic airport charges ($7) typically make up about 3-4% of the cost of an average domestic airfare in 2022.
Because the domestic terminal is a 58-year-old asset, the domestic charges airlines currently pay are extraordinarily low – 40-50% less than comparable airports in Australia and New Zealand.
Auckland Airport has been consulting with its major airline customers since May 2011 on a replacement for the ageing domestic terminal. Since that time, the airport has discussed 21 concept designs with major airlines.
Consultation Process
Auckland, Wellington, and Christchurch Airports are subject to information disclosure regulation by the Commerce Commission, providing transparency about airport pricing, spending decisions, and performance.
Auckland Airport sets its airline charges at least every five years, a process that includes consultation with major airline customers and BARNZ, followed by thorough public scrutiny by the Commerce Commission.
Auckland Airport is currently in the phase of consulting with airlines on the pricing period of July 2022 - June 2027.
Auckland Airport was due to reset charges from 1 July 2022 but chose to freeze existing charges for the first year of the pricing period to support airlines following the pandemic.
Once airline consultation is complete, the airport will reset prices from 1 July 2023 for the remaining four years of the pricing period.
Airline charges will be set with reference to the Commerce Commission’s current information disclosure framework, with target return parameters updated as at the start of each pricing period. The airport's prices are reviewed and reported on by the Commission.
The new integrated terminal is set to open between 2028 and 2029.