September 17th, 2024
In a combined stance against the proposed redevelopment of Auckland International Airport Limited (AIAL), Qantas and Air New Zealand, the airport's two major clients, have declared their disapproval concerning the project's scale and cost. Both airlines have called for an immediate reconsideration of the redevelopment plan.
Earlier this year, AIAL disclosed plans to spend $3.9 billion on the initial phase of the airport's redevelopment over the subsequent 5-6 years.
"The cost of that redevelopment will be paid for by airport users," the joint statement read.
Based on independent economic analysis supporting their respective network impacts, Qantas and Air New Zealand have projected that the redevelopment costs are likely to considerably escalate airport charges. Consequently, a significant proportion of travellers might find air travel too expensive, impacting both airlines, including Qantas' subsidiary Jetstar.
In a recent market disclosure, AIAL published its enhanced aeronautical charges, which would double on international routes and more than double domestically by the end of the current five-year pricing period (FY27).
"Given AIAL's intention to spend billions more, there will have to be further significant increases to follow in the next pricing period," the airlines warned.
"AIAL may have only released the first phase of the redevelopment plan, and it appears that the costs will keep climbing," the statement said.
An external analyst predicts the overall costs for the first two phases of AIAL's four-phase master plan to amount to around $6 billion, indicating substantial costs in the pipeline.
Greg Foran, Chief Executive of Air New Zealand said "this is an enormous spend over a short period of time that adds almost no additional capacity." Qantas Chief Executive Alan Joyce echoed this sentiment, stating, "what AIAL is proposing goes far beyond what is needed or affordable."
Both airlines are now urging Auckland Airport to reassess its approach and strategise an affordable infrastructure investment, ensuring efficiency for its airline users. The airlines' suggested solutions include pausing growth programmes, investing profits from other services to fund part of the project, and prioritising cost reduction for infrastructure to maintain affordable air travel.
