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The cost of a longer runway

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, [1] 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 [2] 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 [3]. 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 [4] 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? [5]