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The cost of a longer runway

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Does everyone agree that Wellington Airport needs a longer runway? Does everyone agree that Wellington Airport needs long-haul flights?

To judge from one of those DomPost on-line polls last week, a big majority thinks these are good ideas. And regular long-haul travellers may be hoping for one less change of planes before they get home from their trips.

The city council has been keen on long-haul flights since it published its economic blueprint in December 2011. In the blueprint, councillors agreed to spend to spend $200,000 a year to attract these flights to Wellington. The blueprint set a deadline; it said long-haul flights would start by the beginning of this year. But the flights never arrived. Twenty days after we pointed out that this hadn’t happened, the council’s spokesperson offered a belated excuse:

Most reasonable people would understand that, given the global economy and a host of other issues, 2013 is an aspirational date.

So much for having a deadline and a blueprint.

Nevertheless the council is trying again, this time with a larger sum of money. Councillors last week agreed to give $1million to the airport company to pay half the cost of applying for a resource consent to build a longer runway which they hope will attract the elusive long-haul flights. The council, of course, owns 34 per cent of the company. Infratil owns the other 66 per cent. Both benefit from the airport’s profits, which in the last financial year were over $16million. Not nearly enough, though, to pay for a longer runway.

Property developer Ian Cassells is one of the most persuasive proponents of why Wellington would benefit from long-haul flights. Here’s what he said after the council agreed to hand over $1million:

“Access to markets is a key driver in economic development and frequent, reliable air services are essential for growing tourism. Business locations are often decided by the ability to move goods and services to and from key markets. An international airport with limited flight timetables and schedules that can’t attract new-generation aircraft constrains business growth. An extended runway with the ability to attract Boeing 787 Dreamliner and the Airbus A350 will make a critical difference to Wellington. Our economy hinges on office-based business and direct connections with Asia will be a key driver to business expansion and growth.”

Mayor Wade-Brown used similar references when she announced the council decision.

“Wellington International Airport is Wellington’s key strategic asset and gateway to the world. It’s appropriate that Council helps kick-start the process to get this major infrastructure project moving. I endorse Council contributing to the costs of the RMA process. The short and long term benefits to Wellington of a runway extension are significant. BERL calculates the direct economic benefit to the region at more than $43 million a year with more than 300 post-construction jobs created.”

But is there any guarantee that a longer runway will bring the flights that are wanted by councillors and developers? One of our readers reckons there’s no business case to be currently built for long haul flights from Asia to Wellington. He says it’s all a pipe dream.

Perth? Bali? Jakarta? Singapore? KL? Bangkok? Hong Kong? Macau? Any Chinese city you care to name, sister-city or not? Shanghai? Tokyo? Seoul? Ho Chi Minh City? Taipei, Honolulu? Nadi? Raro? Apia? Nuku’alofa? Niue? Pago Pago? Papeete? Santiago? Buenos Aires? Sao Paulo? All are economically better served from Auckland or Christchurch, both 60 minutes or less or away.
What does that leave?
Port Moresby, Honiara, Vila, Noumea, Guam, Cairns, Townsville, Rockhampton, Newcastle, Wollongong, Canberra, Hobart, Adelaide, Darwin. Maybe Canberra-Wellington, with Adelaide-Wellington a poor second, and Hobart-Wellington a very distant third. Wellington-Rockhampton and Noumea-Wellington in our winter only once a week starting with charters [we get sun, they get snow]. Hardly long haul.

And Helene Ritchie (she and Bryan Pepperell were the only councillors who voted against the $1m grant) has raised another issue – the $300million cost of extending the runway.

No-one has come forward to fund the proposed extension. The airport company has said it won’t/can’t (officer report)…that the business case simply would not stack up. That’s obvious. If it did fund it, it would have to put plane landing charges, carparking and concessions charges up so much that no-one could afford to fly and no planes could afford to land.

The airport company, however, is optimistic, even it it doesn’t have the money. Its chief executive Steve Sanderson says:

The runway extension is one of the most significant developments Wellington can do to boost its economy. The economic benefit for the region is substantial with over 1,000 people flying long haul to and from Wellington every day.

If someone can be found to pay, the runway extension is likely to take 5-7 years to build once resource consent is given. And if an airline can then be persuaded to come here, the extension would enable twin aisle jets such as the Boeing 787 Dreamliner (210 to 290 passengers, 7650 to 8200 nautical mile range) and the Airbus A350 (314 passengers, 8000 nautical mile range) to fly non-stop from Wellington to Asia. It’s not only the runway that will need extending – the terminal will have to grow, too.

TV3: Will the airlines want to land in Wellington?

12 comments:

  1. CC, 3. June 2013, 8:41

    It seems the capitalists are still looking for the socialist money tree to enhance their profit-taking ways.

     
  2. erentz, 3. June 2013, 14:34

    To put this $300million figure in perspective. Wellington Airport is worth about $500million by my estimation. Any public infusion of $300m should come with a commensurate stake in the company. Roughly 35%, which would double WCC’s shareholding.

    But there’s no way ratepayers should fund this. There are more important things requiring ratepayer attention. But if central government wanted to fund it — you know, because we’re a dying city — then I wouldn’t complain.

     
  3. Ross Clark, 3. June 2013, 22:42

    I like aeroplanes, and airports, but the wishful thinking in this request is gob-smacking. Christchurch’s direct links to Asia make how much difference?

    What would help is a direct air service through to Auckland’s international terminal, rather than international passengers facing the trek from the Domestic to the International terminal (and yet another security check etc). International arrivals whose final destination was Wellington would change onto a 737 in Auckland, and have their final border & customs clearance in Wellington. In reverse, people would leave Wellington for Auckland and fly straight to the International Terminal. Some services from CHC are operated like this. The other ace is the hole is the Sydney link, because this connects through to Dubai w/Emirates, and Dubai is how you connect to everywhere!

    That said, I suspect that the current International Terminal could handle a 787 or A350 fairly easily – the passenger loads would not be much more than a 737, so that is not the issue.

     
  4. KB, 5. June 2013, 17:25

    Wouldn’t it be a lot cheaper to extend the Paraparaumu airport runway, seeing as it’s surrounded by land rather than water. Paraparaumu could service the long haul routes, while the current airport handles what it does just fine at the moment. It would even lend some credibility to the Kapiti expressway.

     
  5. Stan, 5. June 2013, 17:44

    As a ratepayer I am angry that I was not asked for my authority to spend my money. When the Draft Annual Plan process has not yet been approved, it is beyond understanding how a commercial enterprise can write a begging letter seeking $1 million to fund a Consent process. WCC used obscure references in its ‘report’ insinuating that consultation had taken place in the Long Term Plan. In actual fact, WCC just about broke every rule in failing to exercise its Community Engagement Plan. So which airlines are queuing up to land at Wellington Airport? Certainly not Air New Zealand. Where is WIAL’s business plan? What is the return on investment for the $300 million expenditure? WCC was eager to donate our money to gain the limelight but gave residents the thumbs down when WIAL used draconian measures to construct Barriers on Stewart Duff Drive. Could this donation be the first of many applications by WIAL for further handouts?

     
  6. Sridhar, 6. June 2013, 14:27

    @erentz. I don’t think a final decision has been made on how this project is going to be funded. But I would guess this money will have to come from elsewhere. I don’t think WCC has the money to sink on such a project. I like your suggestion why the central govt could put the money. they could take some money out of RONS and put on this project which will probably have better returns on investment compared to roads.

    @Ross Clark. One thing to note would be that Chch international airport was not really to be an international airport but more of a gateway for Antarctic expeditions, being the closest city. Commercial international flights have only followed after that.
    Your suggestion of how international travel could be between Wellington and Auckland is the way it works right now, except for the international terminal bit. But then the distance between the domestic and international terminal is not so much. The time it takes to walk between the two terminals in Auckland is less than it takes to walk from one international terminal to another at Singapore Changi Airport.
    I would prefer that Wellington has the option of international flights so travel times are reduced. Further, with direct flights from Wellington you are reducing take off process by one, which is when most of the fuel is consumed by a plane and will hence reduce carbon emissions.

     
  7. Seaside Johnny, 6. June 2013, 22:11

    Sridhar – before you start making assumptions about Christchurch and Op. Deep Freeze, understand one thing: when Christchurch was being developed, it meant New Zealand would have two international airports.
    Second point: Sydney is closer to Christchurch than Auckland, that’s why it was developed. Next time you want to comment on things you know nothing about, I suggest you get off your bike first.

     
  8. starkive, 8. June 2013, 13:39

    Why is it that no story I have read about this question has ever asked an airline for their opinion?

    And for the record, the main thing stopping Canberra-Wellington flights is not the size of the planes needed to make the flight (almost exactly the same distance as Wellington-Melbourne), but the lack of international status for Canberra’s airport.

     
  9. MindPilot, 9. June 2013, 11:03

    My concern is that if they extend the runway, those flights coming in from the northern end will be flying even lower over the northern suburbs – I hope they’ll sound proof the affected houses!

     
  10. Sridhar, 9. June 2013, 16:52

    @Seaside Johnny. What has my biking got to do with the airport business :). BTW, I didn’t make any assumptions regarding Chch’s international status vis-a-vis Antartic expeditions. That is what I was told by the driver when I took the tour in the Antarctic centre back in 2000 (at that time the tour included a tour of Chch international airport as well). So maybe you want to check if your understanding is correct or not.

    Anyway, just because Sydney is closer to Christchurch than Auckland doesn’t mean we shouldn’t explore options for Wellington. Especially if we want big businesses from Asia to setup shop in Wellington. Why would businesses want to spend a couple of hours in Auckland / Christchurch when they could be in Wellington long before that? S

     
  11. Ross Clark, 18. June 2013, 1:33

    Sridhar – I’ve used Changi, a number of times. Your comparison doesn’t quite work because at Changi there are no barriers to inter-terminal access once you are airside.

    The reason why I suggested direct flights to the AKL International Terminal, is that it would save well over half an hour in end-to-end journey time. A passenger coming up from Wellington would be treated as an arriving international transit passenger and passed through to the International Departures area without the twenty-minute walk from the domestic terminal and a further quarter of an hour getting through security. In reverse a traveller would avoid the scrum at AKL’s international arrivals (eg. three A380s arriving at once, after October).

     
  12. Richard Randerson, 20. June 2013, 14:52

    This proposal has come “suddenly out of the air”, almost as a fait accompli supported by Airport and Council. Who speaks for Evans Bay, its recreational attractions and iconic beauty? Citizens will have a chance to dialogue with the Mayor on Wed 3 July at a special eastern suburbs community meeting (7.30pm, Hataitai Bowling Club, 157 Hataitai Rd))