Auckland Airport suspends construction of second runway

Friday 16th July 2010

Auckland International Airport has suspended construction on its second runway following consultation with the airline industry, saying it will make more effective use of peak-time capacity on the existing runway.

Earthworks for the second runway, to the north and parallel with the existing runway, began in late 2007, but construction was suspended last August as air travel demand from the global economic downturn fell and an uncertain regulatory framework impacted on the nation's busiest gateway.

The airport, along with Air NZ and the Board of Airline Representatives have agreed the existing runway can handle expected growth for a few years longer than originally envisaged, said chief executive Simon Moutter.

"Although passenger volumes are now growing again, the growth trend was still behind where it was anticipated to be when construction of the second runway began," he said.

"A second runway has been part of the Auckand Airport master-plan since the 1960s and will definitely be needed before too long."

He said deferring the runway's significant capital construction will reduce cost pressures on its airline customers and on travellers.

"This move is also consistent with our focus on cost efficiency and capital productivity, which is a key element of our strategy to drive growth in shareholder value," Moutter said.

Airport chief operating officer, Tony Gollin, said it has been very focused on increasing the utilisation of existing airport infrastructure across the business, with the introduction of SmartGate and Lean Six Sigma technologies being consistent with that.

Law changes as currently proposed by the Commerce Commission's draft determination on a new regulatory regime for New Zealand's major airports have also contributed to the construction delay Gollin said.

"Much of the air service growth we are chasing in key markets such as Asia would involve runway use during non-peak periods and will actually assist us in increasing the utilisation efficiency of the existing runway infrastructure," Moutter said.

"Auckland Airport also has plenty of international terminal capacity for passenger and aircraft movement growth and to support our ambitions for New Zealand tourism and trade."

Auckland International Airport shares remained steady yesterday at $1.96.

Businesswire.co.nz

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