Runway extension opponents a noisy minority, says Wellington airport boss

Wednesday 27th May 2015

Opponents to the Wellington International Airport's mooted $350 million runway extension are just a "small minority," says chief executive Steve Sanderson.

The airport, which is owned 66 percent by NZX listed infrastructure investor Infratil and 33 percent by Wellington City Council, wants to extend the capital's only runway to attract more long haul international Asian and North American routes as the domestic market grows increasingly competitive. The city's council today approved the inclusion of a $90 million contribution to the extension in the its 10 Year Plan.

Speaking yesterday at a Wellington Chamber of Commerce breakfast, Sanderson said that if the extension goes ahead, one direct or long haul flight to a major hub would be worth about $3 million to $4 million in revenue to the airport company in the first few years. That doesn’t "quite tie with a $350 million investment if the airport was going to actually pay for that in its entirety", which was why the extension would need further public funding. The company has previously indicated it expects central government to assist with the project.

"We are talking about public funding, and we're also talking to the airlines," said Sanderson. "The current incumbents have said they don't want to pay for an extension and we've said that it will be user pays so the current incumbents won’t pay for it," he said, referring to the airport's main users, Air New Zealand and Qantas subsidiary JetStar. “The funding for it does require some funding from the airport and some funding, or the majority of the funding, from the public."

Sanderson said he understood at least 80 percent of the Wellington Chamber of Commerce's 3,000 strong membership were in favour of the extension and wanted them to support the plans, particularly when it goes through a resource consent process. The airport has applied for the project to be fast tracked as a project of national significance, meaning the application would be administered by the Environmental Protection Authority.

"What I am asking is when we get to the more difficult part, that is the EPA, we get that support individually from all these members, that you do front up with your submissions at the EPA and you get behind it and you make actual support visible at the EPA and actually support it," Sanderson said. "Because if we stand alone, a little bit like we did at the Council's long term plan, it's the small minority who are against it, who are a little bit noisy. We all know now that it's harder to get a consent than it is to construct something. We do need the majority of people actually coming out to get this consent through."

A report by accounting and consultancy firm EY, released last year found the extension would add between 16 and 33 extra flights a week by 2060 and would lift Wellington's connection to long haul destinations and flight hubs in Asia and America. The report doesn't provide a cost benefit analysis, but calculates in the best case scenario the economic impact would bring an additional $970 million to the Wellington region and $1.7 billion across the country.

A countering report, commissioned from the New Zealand Institute of Economic Research for the Board of Airline Representatives of New Zealand, representing airlines currently operating in this country, was highly critical of the EY analysis for failing to include a cost benefit analysis.

Sanderson expects a cost benefit analysis for the plan to be finished in a month's time. The airport will begin public consultation in August and file its consent with the EPA in the last quarter of this year, assuming it is cleared for that process, for a hearing in the new year. That would lead to a decision some six to nine months afterwards, he said.

Sanderson said long haul flights to and from Wellington would mean better visibility for the city, stimulate the Wellington region, drive tourism, and bring in more international students and business, Sanderson said.

BusinessDesk.co.nz

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