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• 9. Wellington Airport
• WIAL

• Infrastructure Development

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• Airfield Inquiry

• Final Report Part IV

• Operational Details
• Activities Undertaken
• Airfield Activities
• Airfield (Landing) Charges
• Acquirers of Airfield Activities

9.2 WIAL was incorporated on 16 October 1990. The airport company is majority owned (66%) by Infratil Limited (Infratil), with the Wellington City Council owning the other 34%.

Operational Details

9.3 Wellington International Airport is the third largest airport in New Zealand, and the smallest of the three subject airports. It classifies itself as a regional hub, servicing New Zealand and international flights to the eastern seaboard of Australia and the island nations in the south-west Pacific. Approximately 90% of Wellington's passengers travel domestically, and a high proportion are business people.

9.4 Wellington International Airport is located on a cramped isthmus site, which makes physical expansion of facilities difficult and expensive. The runway length, at just under 2000 metres, is relatively short for an international airport, and is bounded by water at both ends. Capacity is also limited by airspace problems due to the surrounding hills. The hills and runway length impose limits on aircraft operations, precluding the use of B747 aircraft, and restrict the range that can be achieved with smaller aircraft types to destinations in Australia and some Pacific Islands. Wellington International Airport's location close to residential areas has resulted in noise abatement requirements, which include restrictions on aircraft types that may operate and a night curfew. The Airport also gets congested at peak periods, especially in adverse weather conditions.

9.5 Key operational statistics for the year ended 31 March 2001 are detailed in Table 32.

Table 32: Wellington International Airport Operational Statistics

9.6 Freight statistics are not available for Wellington International Airport, although the Airport is used for freight purposes.

Activities Undertaken

9.7 WIAL is largely a facilities provider - providing land or buildings from which third parties operate their business. However, there are some exceptions. WIAL's business is focused on the provision of airport facilities by providing aerodrome facilities and services, property, roading, car parking, information services and service utilities to the various airlines and other airport users. WIAL also provides a rescue fire service and public car parking at the Airport. WIAL aims to contract out services wherever there are cost reductions to be made.

9.8 WIAL's assets include a single runway, aprons, the terminal building, car parking and other ancillary buildings. Over 1998 and 1999, WIAL constructed a new multi-user integrated terminal used by all airlines, both domestic and international.

9.9 Air traffic control is currently provided by Airways Corporation of New Zealand Limited (Airways), which has its own control tower located off the Airport in a residential street. Airways provide and bill the airlines directly for air traffic control services. Ground handling services at the airport are provided by the airlines themselves, not by WIAL.

9.10 Geographical limitations mean that there is a limited area of land at the Airport, constraining both current operations and opportunities for development. Of the 110 hectares of land owned, 85 hectares is the airfield. There is limited opportunity to extend the runway, as it is bound by water at each end. The runway could only be extended by reclaiming substantial amounts of land.

Airfield Activities

9.11 The activities undertaken by WIAL can be classified and grouped in terms of the three identified airport activities (defined in the Airport Authorities Amendment Act) and an additional grouping, other airport activities.³⁶⁴ This Inquiry focuses only on airfield activities.

9.12 Airfield activities at Wellington International Airport, and those undertaken by WIAL, are as follows:

Table 33: Airfield Activities at Wellington International Airport

9.13 As noted in Chapter 1, the Commission has focused on those airfield services supplied to aircraft operators - being the bulk of the airfield services supplied by WIAL, for which aircraft operators pay per tonne landing charges. The remaining airfield activities provided by WIAL are facilities provided (by way of lease or other commercial arrangements) to the Aviation Security Service (AVSEC) to enable those parties to supply airfield activities themselves. Unlike AIAL and CIAL, WIAL does not provide any facilities to Airways, as Airways operates its air traffic control service in Wellington from an off-airport location.

Airfield (Landing) Charges

9.14 WIAL's revenue from airfield activities is principally derived from landing charges levied on aircraft operators based on aircraft weight. In addition, WIAL - like AIAL - charges non-scheduled flights (itinerants) that park for more than six hours a parking charge. However, revenue from aircraft parking charges is insignificant relative to landing charge revenues. The Commission has focused on determining whether landing charges need to be controlled.

9.15 On 1 January 1991 (shortly after vesting), new airport charges were introduced. Landing charges were further increased on 1 July 1992 and again on 1 May 1997. The change in charges in 1997 was based on a five-year Deed entered into with the major airline users (Air New Zealand, Qantas, Ansett New Zealand, Air Pacific, Polynesian Airlines). Changes in charges since 1997 have been in accordance with the Deed.

9.16 The Deed set initial prices for the first year from 1 July 1997. Prices for the four subsequent years have been determined based on the actual landed tonnes (MCTOW) of the previous year. Prices for various bands of increases and decreases in MCTOW (relative to MCTOW for the year ended 30 June 1997) are built into the Deed, which range from 90% to 130% of the 30 June 1997 MCTOW. In the event that MCTOW falls outside the bands in the Deed, the Deed provides for the parties to negotiate a price, and failing that for WIAL to set charges.

9.17 Since vesting, all weight bands have experienced increased charges, typically with increases in charges being higher for smaller aircraft. Landing charges since vesting are summarised in Table 34.

Table 34: WIAL Landing Charges

9.18 WIAL is currently in consultation with the airlines, in order to set new charges from 1 July 2002. The present Deed with users expires on 30 June 2002. WIAL's latest current proposal of 17 May 2002 is to seek an average increase in total aeronautical revenue of [...] over the next five years. [...].

9.19 Whilst consultation is ongoing, WIAL has announced an interim increase in landing charges of 10% from 1 July 2002 (1 August for smaller aircraft).³⁶⁶ This 10% increase is factored into the Commission's forecast analysis for WIAL presented later in this Chapter.

Acquirers of Airfield Activities

9.20 The direct acquirers of the airfield services supplied by WIAL (that are being examined) are the aircraft operators - the commercial airlines and other aircraft operators that land and take-off aircraft at/from Wellington International Airport. The indirect acquirers are the aircraft passengers and persons sending freight by aircraft. Table 35 details the acquirers.

Table 35: Acquirers of Airfield Services Supplied by WIAL

9.21 WIAL's substantial customers, in their own right, are Air New Zealand and Qantas Airways. The Board of Airlines Representatives of New Zealand Inc (BARNZ) represents these substantial customers in consultation.

³⁶⁴Refer to Appendix 14 for full details of activities undertaken by WIAL.

³⁶⁵Note that landing charges for aircraft under 2 tonne since 1 April 1999 are actual landing charge per landing, not on a tonne basis.

³⁶⁶The 10% interim increase is included in the Commission's analysis of WIAL's future performance presented later in this Chapter.