Airways NZ seeks 30% fee increase to cope with rampant aviation growth

Friday 6th May 2016

Airways Corp, the state-owned enterprise in charge of air traffic control, is seeking an increase of up to 30 percent in its total annual fees to airlines over the next three years to cope with exponential growth in air traffic.

Airways has already seen annual budget growth of 150 percent to about $15 million in recent years and chief executive Ed Sims told BusinessDesk the demand for upgraded technology to cope with booming growth from Asia meant further investment was required.

The corporation is in consultation with airlines about its charging regime now and it "may potentially go up 20-to-30 percent", shared among the growing array of international carriers now landing in New Zealand, mainly at Auckland International Airport.

Direct services to Dubai, Qatar, and the Philippines have all been announced in recent weeks, along with greater competition on routes to the west coast of the US, all through Auckland. New air services agreements with major potential sources of tourist arrivals, such as India, have also been signed.

Sims was speaking from the Civil Air Navigations Services Organisation's Asia-Pacific conference in Queenstown, where regional industry leaders have gathered for two days of discussions on how best to manage the exploding growth of aviation in the region and how to avoid the bureaucratic tangle that's evolved in Europe, which along with North America is showing more static growth patterns.

“Our region is facing a period of unprecedented growth; the projected increase in traffic and airspace congestion will have a profound impact on safety, efficiency, environmental sustainability and the wider economy," said Sims.

Conrad Clifford, the Asia-Pacific director for the International Air Transport Association (IATA) said growth from China, which would soon outstrip the US as the primary source of air travellers, was likely to see the emergence of Sydney and Auckland as hubs competing with west coast US airports, such as Los Angeles, for Asian traffic bound for Latin American destinations.

Budget airlines, which were a primary source of traffic growth out of Asia, were likely to fly more point-to-point routes, not necessarily using hub airports, although their preference would always be hubs.

Sims said the growth in traffic into Auckland could be accommodated if Airways invested sufficiently in new technology to wring more efficiency out of the runway and the scheduling of planes waiting to take off and land.

"If we don't invest in the right technology and New Zealand finds itself where demand outstrips supply, I don't think that pressure would be too far away," he said of the potential for Auckland airport, in particular, to become overloaded, creating opportunity for other New Zealand airports, although Sims doubted that outcome.

"I don't know if it will get to the point of needing new airports. I don't see regional (domestic) aircraft growing at the same rate as international traffic."

BusinessDesk.co.nz

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