10. Airports
This section considers New Zealand's aviation infrastructure, assessing the capacity of the international airports (3 main, 5 regional). The air traffic control system is also examined.
As with ports, airports are a complex set of assets and each airport faces specific issues that may affect their capacity. Particular issues for airports include available land and restrictions on noise from District Plans.
Admittedly simplifying the issues, the critical constraints on an airport's capacity are ultimately the size of plane that the runway can accommodate (influenced by surface, structure, length and clear flight path) and the rate of passenger throughput possible at terminal facilities (which is a function of the number of aircraft stands at terminals as well as terminal building capacity). The number of take off and landing slots is determined by the necessary separation between aircraft. This is a essentially a function of the air traffic control system and the type of plane in use (the speed with which it can clear the runway); weather conditions are also critical (although obviously not subject to control). Although the number of planes using an airport is subject to absolute limits, there is considerable flexibility to increase or decrease actual seat capacity through the size of plane in use.
10.1 Summary of Key Issues
Airports and airlines tend to be cautious about forecasting passenger numbers. The recent reduction in prices by Air New Zealand and Qantas lead to a steep jump in domestic passengers, while world events (terrorism, war and SARS) depressed international arrivals for two years (although indications are that these have picked up again in recent months). In the long run, the consensus on passenger numbers appears to be growth of approximately 3% per annum for domestic passengers, and of 5-6% per annum for international. These forecasts may not however take account of much wilder short-term fluctuations, or the impact of step-changes in fares (both domestically and internationally).
Airports provide a critical part of the country's transport infrastructure. Two of the country's focuses for economic growth are high value exports and international tourists. These would both be expected to increase the demand for air transport.
The consensus forecasts are for international passengers to grow by 5-6% per annum in the long run - roughly twice the rate of GDP growth. Domestic passengers are expected to grow more slowly (consensus expectations of 3% per annum - although this would not take account of the potential volume impacts of another major reduction in prices). It is possible that new telecommunications capabilities (particularly video conferencing) might substitute to a certain extent for business air travel. However, it is hard to imagine that business travel (either domestic or international) will greatly diminish if economic activity is increasing. Other forms of communications are unlikely to be a substitute for leisure travel (in its broadest sense of "visiting people or places").
10.1.1 Airport Responsiveness
Our research indicates that, on the whole, New Zealand's airports have the capacity to respond to increases in utilisation, particularly when taking account of the ability to increase the size of aircraft in use in New Zealand. The larger airports tend to have greater financial and infrastructural flexibility and capability to respond to growth incrementally.
Key trends in the sector may be summarised as:
- Over the last 10 years, the number of international airports has more than doubled, with Dunedin, Hamilton, Queenstown and Palmerston North joining Auckland, Wellington and Christchurch. This process appears to be ongoing, with Invercargill and Rotorua both seeking to start scheduled international flights. The introduction of international services at the regional airports has been accompanied by extensions to runways (generally to be able to accommodate not only B737s but also B767s), and terminals. This process is ongoing. Of the major airports, Auckland is the only one likely to require a second runway within the next 20 years (and there are mixed views on whether this is absolutely necessary). This is accommodated in the current district plan, and is likely to be developed to absorb smaller commercial traffic and general aviation, freeing up the existing runway.
- Airlines have tended to reduce the size of aircraft and increase the frequency of flights. The main domestic trunk routes are primarily served by B737s, rather than B767s; smaller regional routes use ATR-72s or smaller aircraft. Whilst there is a finite limit to the number of aircraft movements per hour at any airport, the current use of smaller planes indicates that passenger growth could be accommodated by increasing plane sizes if more flights are not practically possible.
- New Zealand is a "schedule taker" in terms of intercontinental flights (flight times are determined by slots at the overseas airports). This often leads to a concentration of flights in specific busy periods. International volumes can be expanded with relative ease outside the peak periods (extending the "shoulders" of the hump in volumes) - if schedules can be agreed.
- There is some pressure on terminal capacity at the main airports: Auckland, Christchurch, Queenstown and Dunedin all have or are developing plans for expansion of terminal space. The newer terminals tend to be designed to more easily accommodate incremental expansion. Terminal expansion can generally be expected to trail (rather than lead) passenger numbers (particularly at the larger airports): airports need as much certainty as possible that higher numbers will be maintained before committing capital to expansion. Airlines' willingness to absorb the costs of expansion also plays a role in expansion plans.
- Of the main international airports, Wellington and Queenstown are constrained in the type of plane they can serve by runway length. Auckland and Christchurch are completely unconstrained.
- Safety and security regulation plays an ongoing role in driving some investment. The CAA has recently required increases to minimum runway end safety areas (RESAs). Compulsory hold baggage screening for international flights is also likely to require investment, although the issue of who should ultimately be responsible for and who should pay for this development is still undecided.
- Regional airports consider the differential regime applied for customs and MAF charges to be unfair (regional airports are charged, where the three main airports are not). This is seen as backdoor regulation to restrict the proliferation of international airports.
- Ownership of some airports by Territorial Authorities may affect commercial behaviour and responsiveness at some of the regional airports (in terms of either funding expansion that cannot be justified on a strictly commercial basis, or placing external financial restrictions on investment that could be justified).
- All airports express considerable concern over potential regulation of prices and/or returns.
- The air traffic control system, operating by Airways New Zealand, has considerable capacity to absorb additional flights. Airways states that its system capacity can be tripled with little difficulty.
10.1.2 Environmental Effects
Aircraft are steadily becoming more efficient in terms of fuel use, and less noisy. However, they will remain creators of noise and exhaust pollution for the foreseeable future (radical shifts in technology would be required for these issues to be removed). An increase in air traffic can be expected to increase environmental impacts.
10.2 Individual Airports
This section provides a brief survey of the airports under consideration. The type of information for each airport varies, depending on its availability, the level of confidence in expected developments and issues of commercial confidentiality.
10.2.1 Intercontinental "Connectedness"
One concern expressed is on the number of airlines that actually fly to major destinations. The table below summarises the number of carriers:
Table 57: Direct Intercontinental Services| International Destination | No. of Carriers Operating Direct Services |
| Auckland | Christchurch |
| US (Los Angeles) | 2 | (1) |
| Latin America | 1 | |
| Japan | 1 | 1 |
| Korea | 2 | |
| Hong Kong | 2 | |
| Singapore | 2 | 1 (1) |
| Middle East | (1) | (1) |
In general, there are relatively few carriers operating direct services between New Zealand and destinations in Asia or the Americas. The relatively low level of competition may have implications for passenger flights, but also affects freight (particularly to the US). This is not strictly an infrastructure issue: the airports could accommodate direct freight services or extra passenger flights. Nevertheless, since most international air cargo leaves in the belly holds of intercontinental aircraft, without dedicated freight services the capacity of freight is likely to be a function of the capacity of passenger air services.
10.2.2 Auckland
Auckland airport is New Zealand's largest, and the country's key hub for intercontinental travel, taking approximately 70% of international visitors. It also takes the majority of internal business traffic. Some 73.9 percent of New Zealand air exports and 89.4 percent of New Zealand air imports by value are handled by Auckland International Airport.62 Total freight volumes from Auckland for the year to June 2002 were 188,911 tonnes. In the same year, the largest export volumes through Auckland International Airport are horticulture at 13,245 tonnes and hunting and fishing at 11,777 tonnes. The largest import volume is machinery and equipment manufacture at 25,093 tonnes, followed by textile and apparel manufacture at 11,007 tonnes. The highest export and import values through Auckland International Airport belong to machinery and equipment manufacture at $1.17 billion and $3.79 billion respectively.
Auckland is facing issues of capacity in terms of runways and terminals. Over the next ten years, Auckland expects to see greater demand for aircraft movements than can be accommodated on the existing runway. The international terminal was designed for a throughput of approximately 2000 passengers/hr and was planned to take capacity until 2005; during selected busy periods (particularly the weekend) the terminal already operates at capacity.63 The key constraint is the ability to process passengers. The Air New Zealand domestic terminal suffers congestion during the busy periods of the day (commuter traffic in the morning and late afternoon).
However, Auckland is also in a position to respond to these and does not suffer from space constraints: it owns all of the land surrounding the existing facility. Development plans are designed to allow for incremental increases in capacity wherever possible. Plans include:
- Construction of a new runway, parallel and to the north of the existing runway. This is permitted in the district plan, up to B767 aircraft. The intention would be to divert smaller aircraft onto this runway, so as to free up capacity on the current runway for larger aircraft. Dates for implementation are not yet firm, but it is unlikely to come into operation before 2008 and probably initially be only built to 1250m.
- Extension to the existing international terminal, involving construction of new stands and passenger gantries and walkways. This process can proceed incrementally, gradually adding gates and passenger processing facilities as required. It will also be able to serve the new A380 aircraft and offers more potential for gates to accommodate B777s. Seating capacity is expected to increase by 30% over the coming summer. Assuming that this translates to substantial and sustained increases in passenger numbers, plans would be for check-in expansion to be undertaken in 2004 and the first set of gate extensions completed in the next few years.
- The main runway (concrete rather than asphalt) is currently being steadily rebuilt, a process that will continue to 2006. It will have a 40-year minimal-maintenance life. Wider runway shoulders to accommodate A380s may be required. These do not need to be load-bearing so will be relatively simple to add.
- Some expansion of the Air New Zealand domestic terminal is also underway, that would provide some additional capacity. A complete rebuild of this terminal would be subject to agreement with Air New Zealand, being the customer that would ultimately carry the cost.
- Parking is also being expanded incrementally.
Figure 61: Auckland International Airport: Average Daily IFR Movements (September 2003)
Source: Airways Corporation
The figure above, derived from data provided by Airways Corporation, shows average daily commercial64 aircraft movements at Auckland during September 2003. Airways Corporation indicates that the data for September is a good proxy for monthly movements over the last year. Obviously, there is some variation across days as well, which is not visible in the averages. The graphs below are based on the same data types for each airport shown.
10.2.3 Wellington
Wellington is highly constrained in its ability to take larger aircraft by its position on the coast. Extension of the runway to the north (into Evans Bay) would be limited by the clear flight path requirements over the Ngauranga hills. Extension to the south would be into deep water. Both options would face significant hurdles in the way of RMA approvals and would also be likely to be prohibitively expensive.
Wellington is therefore effectively confined to its existing runway configuration, and thus to 767s (the larger versions of which must operate with weight restrictions) and the A320 aircraft shortly to be introduced by Air New Zealand. Wellington expects expansion of passenger numbers from the current level of approximately 4.1 million to between 4.5 million and 5.0 million by the period 2008-2010. It is around this period that extra expansion at the terminal would probably be required. All buildings are modular and designed for easy expansion.
The international terminal is likely to see constraints first, and in the 3 to 5 year timeframe. It can take up to 6 planes overnight (current utilisation typically 4); extra gates might also be needed if there was a substantial increase in trans-Tasman traffic. Generally, one extra airline running daily services could be accommodated, but more would be likely to require investment.
Wellington has announced a project to extend its Runway End Safety Areas. This project will take up to four years to complete, as it also involves moving air traffic guidance systems.
Figure 62: Wellington International Airport: Average Daily IFR Movements (September 2003)
Source: Airways Corporation
10.2.4 Christchurch
Christchurch is New Zealand's second hub for intercontinental traffic, although it operates at much lower volumes than Auckland. Christchurch states that it has no problems with runway capacity or condition. The runway and taxi-ways are renewed under a rolling annual maintenance programme. Typical domestic plane sizes are B737s and ATR Turbo-props. There is therefore considerable scope to increase seat capacity through use of larger aircraft. The airport does not operate under a curfew.
Christchurch's international terminal was completed 5 years ago, and originally designed to accommodate passenger growth over a 10-year period. The building is expandable incrementally, with the first expansion (to walkways and gates, rather than main concourse areas) unlikely before 2006.
Christchurch has announced that it is planning a major redevelopment of its domestic terminal. Details of this are still confidential. The international terminal will also be able to accommodate A380s. Under peak demand scenarios, Christchurch would expect to expand gates incrementally from 19 to 30 stands over a 20-year period.
Figure 63: Christchurch International Airport: Average Daily IFR Movements (September 2003)
Source: Airways Corporation
10.2.5 Queenstown
Like Wellington, Queenstown is constrained in the type of planes it can accommodate by runway length. The largest in practice are B737-300s. Queenstown operates only in daylight hours. The airport faces potential pressure from development around the airport and consequential greater restrictions on noise.
As a major tourist destination, both domestic and international, Queenstown expects considerable sustained growth in passengers over the next few years. There is some scope to increase plane sizes, but with noise restrictions and limitations on the maximum size of craft, there is perhaps less potential than at other airports to increase seat capacity through replacement of smaller aircraft with larger.
Queenstown completed a new passenger terminal in 2001 (at a cost of $6m), which is already facing overcrowding. The airport is considering plans for further expansion to facilities to accommodate expected passenger growth.
Figure 64: Queenstown International Airport: Average Daily IFR Movements (September 2003)
Source: Airways Corporation
10.2.6 Other Regional Airports
Regional airports are generally keen to expand operations and to service the international market. They are typically in public sector ownership, and are viewed as critical infrastructure supporting regional development. International operations were started up at Dunedin, Hamilton, Queenstown and Palmerston North during the 1990s. At present Invercargill (which receives some charter flights from Australia and is a diversion destination for Qantas from Queenstown) and Rotorua are attempting to develop scheduled international services.
Planned or current investment activities include:
- Dunedin has announced a redevelopment of terminal facilities, at a projected cost of $21m. The project will involve a staged rebuild of the existing terminal (thus avoiding the need to build new apron space), lifting passenger throughput to 300 passengers an hour. The development will also integrate domestic and international passenger handling (as at Wellington) and is expected to provide sufficient terminal capacity for the next ten years.
- Rotorua has plans for refurbishment of all its facilities, but is likely to have considerable difficulty developing a business case. The need for expansion is essentially driven by regional development imperatives. A recent report commissioned from McGregor and Company by Environment Bay of Plenty concluded that Rotorua had ample capacity to serve demand until 2021 (as did Tauranga).
- Palmerston North is considering further extension of its runway to be able to take larger B767s without weight restrictions. Most international flights are B767-300/400s, whilst domestic flights are typically ATR-72s or Saab 340s. Terminal developments were undertaken recently, further expansion of the international facilities would be relatively simple and use an existing building adjacent to the terminal.
- Hamilton's terminal is running at design capacity (or over) in busy hours and the airport plans an extension to the terminal to increase capacity significantly. As for the other regional airports, international flights are typically B737-300s and domestic flights are ATR-72s. The airport can take up to B767s.
- Invercargill has planning permission to extend its runway by 500m to 2200m, increasing the maximum size and loading of planes.
Generally, it is fair to say that these airports have sufficient capacity to accommodate domestic traffic growth, through either increasing the number of services or introducing larger plains. Whilst the airport facilities may not be luxurious, they tend to be entirely adequate to their basic purpose.
There are a significant number of other small regional airports spread throughout the country serving various smaller cities and towns. These airports play an important role in regional accessibility. While the facilities at many of the smaller regional airports are adequate for the purpose they serve, continued investment will be required at all these airports to maintain operational facilities to required standards. The Ministry of Transport notes that many of the smaller regional airports require repairs to both grass and sealed runways, or complete resealing to maintain operational viability.
10.3 Air Freight
New Zealand's airports carry a small fraction of export and import freight by weight, but nearly 20% by value.
Table 58: International Trade: Air Freight| Airports | Year to August 2003
Imports
$m | Year to July 2003
Exports
$m |
| Auckland | 6,355 | 3,865 |
| Wellington | 87 | 66 |
| Christchurch | 465 | 1,073 |
| 6,907 | 5,004 |
Source: Statistics New Zealand
Auckland airport obviously dominates international air freight, followed by Christchurch, with activity a level of magnitude lower, and Wellington a further order lower. Small amounts of international freight are handled at other airports, but these are insignificant compared to the three main airports.
International freight, particularly exports, are generally high-value perishable goods. Airports report that the bulk of domestic freight is mail, parcels and to some extent critical spare parts. Domestic airfreight faces considerable competition from road transport, particularly within each island.
Airports generally do not report any difficulties in providing freight facilities. Most of New Zealand's freight exports use belly-holds of passenger aircraft. The challenge for international freight is the number of carriers, particularly to the US. This is not, however, an issue of infrastructure, but of demand and supply of freight services.
B737s (used both domestically and internationally to Australia) do not have containerised holds, meaning that freight must be loose-loaded, which is less efficient and more expensive (particularly for transfers). A320s are containerised, but the containers are incompatible with Boeing aircraft. They therefore offer some greater efficiency for point-to-point freight, but transfers would remain expensive.
10.4 Air Traffic Control
Airways New Zealand operates the country's air traffic control system, both domestically and internationally. Airways, in its partnership with Lockheed Martin, is widely regarded as a world leader in the provision of air traffic control technology and services.
Generally, the air traffic control system does not create any constraints on aircraft movements. The domestic system can operate up to 300 airCAT tracks and can be scaled up to 1,000 with relative ease.
Figure 65: Maximum AirCAT Tracks Per Month
→ Larger Version of Figure 65 [20KB GIF]
Source: Airways New Zealand
The graph above illustrates that there is considerable capacity in the current system.
The domestic air traffic control system essentially consists of:
- Navigation systems
Beacons and flight path guides on airports, runway lighting, beacons between airports. Navigation systems are increasingly based on GPS technology and based in the aircraft. For the moment, Airways is intending to maintain ground and aircraft based navigation systems (which ensures a more robust system with greater redundancies). - Communication systems
Voice and data traffic between ground facilities and between ground facilities and aircraft. Airways maintains wherever possible discrete circuits for ground-based telecommunications (either leased or its own). It needs to retain access to the radio spectrum that is internationally mandated for air traffic control. There are backup satellite links between the key centres of Auckland and Christchurch. - Surveillance
Radar systems, which are being upgraded over the next 3 to 4 years. Some duplication is being removed. There is no radar coverage at airports south of Christchurch - at present it is not cost-effective to install it. If aircraft movements increase substantially at Queenstown, there may be a case for installing local radar. - Air Traffic Management
Tower/control rooms, together with flight data processing and conflict alert systems.
Airways notes that it has extensive redundancies built into its systems at present, particularly communications and navigation systems. It plans on a 15-year time horizon, updating a master plan every two years.
The Oceanic Control System has been operating since 1995 and was upgraded in 2000. At the time of introduction it was a world-leader, offering far more efficient intercontinental navigation across the Pacific (to aircraft with necessary equipment installed). The system has considerable unutilised capacity.
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